"Addicted to Raising Taxes": City Council Votes to Impose Special Taxes For Flats East Bank

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The Flats are rising....and raising taxes. - FLATSEAST.COM
  • FlatsEast.com
  • The Flats are rising....and raising taxes.

Next up on the massive private-public-entertainment-complex parade in downtown Cleveland: the Flats East Bank project, long heralded as just the sort of revival needed down by the river. "The Flats..." we've been assured, "...are rising."  

Now, we usher in a new era for Cleveland and its developmental nuclei, an era marked by council complicity in the creation of what seems like a whole new municipal structure within city limits.  

More tourists! More suburbanites! More residents of the fine, fine city of Cleveland will venture from their nests and make this THE spot to be, Fairmount Properties principal Adam Fishman was telling City Council during a three-hour hearing Monday in his push to open up the taxing authority portcullis as soon as humanly possible.

(Council received the legislation last Monday).  

“More downtown living, more jobs, all those things,” Fishman said, underscoring the “opportunity to make it as great as it can be, to generate as much revenue as possible.” He anticipates some $24 million rolling in over 30 years coming from the entertainment district’s new, publicly backed tax structure.

With City Council approval Monday night — the legislation passed with an 11-5 vote — the developers will collect an extra 1.5 percent in sales tax, 2 percent in bed tax, and 2 percent in parking tax within the allotted district, all on top of regular city taxes. Oh, sweet revenue!

City Council members, wary of such measures, but not really too wary, pushed back in the afternoon hearing and demanded guarantees that this new money would be spent on public improvements and maintenance, as noted specifically by petition language. Those public improvements would cover roads and sidewalks in the district, landscaping, parking areas, utility infrastructure, bike paths and the oft-lauded public boardwalk. The funding also covers some measure of "security." All of which is to say, you know, all of the things a city is supposed to provide for its residents, but Cleveland, for some reason, cannot.

Councilman Joe Cimperman wanted a promise that Clevelanders of all stripes would be able to watch sunsets “8-25-366” (Eight days a week, 25 hours a day, etc.)

The authority to impose those taxes will rest with an aptly named community authority, a state-sanctioned body that will oversee private development. A seven-member board (three developer people, four council appointees) will make the calls on spending.

This sort of thing doesn’t exist in Cuyahoga County yet, but the notion of a public government greenlighting private authorities to raise taxes and make bigger and better versions of, e.g., Crocker Park, is an enticing one for our local legislators. Both Matt Zone and Joe Cimperman, westside councilmen, repeatedly and nearly giddily emphasized their support for this structure.

Councilman Jeff Johnson raised the issue of precedence. “Should I be concerned that this just gets the ball rolling to do more?” he asked. It was a question that really couldn’t be answered in the moment. Who knows what happens when you open a so-called Pandora’s Box? Councilman Zack Reed also raised the question of whether these “regressive” taxes would put an unfair burden on lower-wage service workers in the district’s hotels and restaurants.

“This council has become addicted to raising taxes,” Reed censured, though he stressed that he'd really prefer to tax all those tourists "from Iowa" who might be staying in Flats hotels, as opposed to workers trying to snag a beer at happy hour. 

Reed ultimately voted in favor of the measure, as did Jeff Johnson. Council members Martin Keane, who'd expressed dismay at the lack of clarity and communication Monday afternoon, Anthony Brancatelli, TJ Dow, Brian Kazy and Dona Brady voted no. Mayor Frank Jackson has notably and publicly opposed the legislation.

It’s worth pointing out also that Council President Kevin Kelley works for Porter Wright, the law firm that drafted and pushed the petition for this legislation. He did not cast a vote.

The idea hearkens back to the public-private partnerships that have built this city with little vocal opposition. It’s plain and simple, the developers insist: “We've gotta have the resources to make sure it sings,” Fishman said, but when Reed pressed him on the bed tax, he kept repeating that the "arithmetic" just wouldn't work, without ever stating how the $800,000-$1 million per year had been arrived at as the requisite funds to keep the district barbered and gleaming.

“To compete with [Legacy Village and Crocker Park], we can't just have the same offerings. We can’t be more of the same,” Fishman said, a sentiment with which Jeff Johnson agreed. 

Councilwoman Dona Brady noted one key difference: Legacy and Crocker don’t charge a dime for parking.  

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