CINCINNATI - City administrators began drafting the multimillion-dollar plan to build a luxury apartment tower in downtown Cincinnati -- including selecting the developer -- two months before it was presented to City Council. And they did so without any discussion with council.
Administrators have legal discretion to bypass the bidding requirement for major projects if they deem it’s in the “public interest.” But the city’s charter requires the reason “shall be stated in the authorizing ordinance.”
To date, no ordinance about the proposed project at Fourth and Race streets has been presented to City Council.
Council approved the project in principle as part of a controversial 30-year parking lease it passed last week.
“The Municipal Code gives the administration the latitude to directly select developers if it is deemed to be in the best interest of the city,” said Meg Olberding, a city spokeswoman. “We believe that this is one of those cases.”
Under City Manager Milton Dohoney Jr.’s plan, $12 million would be taken from the $92 million in upfront money the city would receive from leasing its parking system. It would be used to renovate Tower Place Mall and demolish the adjacent former Pogue’s garage at Fourth and Race.
A new structure containing a 15,000-square-foot grocery store and 300 luxury apartments would be built there, along with 1,000 new parking spaces.
Indianapolis-based Flaherty & Collins is the lead developer on the project. It’s partnering with local developer Rob Smyjunas and his firm, Vandercar Holdings.
Smyjunas is best known locally for developing The Center of Cincinnati project in Oakley.
The proposed project was unveiled Feb. 19 and was cited by Dohoney as one of the main reasons City Council should approve the parking lease.
Council approved the lease 15 days later, on March 6.
Although the developer’s proposal includes numerous photos of Cosentino’s Downtown Market in Kansas City, Mo., to illustrate what type of grocery would be built here, a Cosentino’s spokesman said the company isn’t involved with the local project.
“We’re not coming to Cincinnati,” he said. “That would be a little out of our range of operations.”
The Kansas City grocery offers free parking, a selection of 45,000 products, an 83-foot salad bar, a restaurant, take-out meals and DVD rentals, among other amenities.
City leaders said they have been talking to an independent grocer about the project; however, they have declined to name that business calling it "a trade secret."
Public records shed light on process
Emails and documents obtained by WCPO Digital through a public records request shed light on how the process to create the proposal occurred over a roughly eight-week period.
The emails begin with one sent Dec. 31 from Jim Crossin, a Flaherty & Collins vice president, to Smyjunas and Stephen Dronen, a city development officer. It asks for a phone call to set up a meeting to discuss the project.
Olberding confirmed the developers talked with city staffers earlier in December.
City administrators said final details about the project still are being hammered out, which is why no ordinance has been presented to council. Regardless, the benefits should be obvious, they added.
“In addition to delivering a firm commitment for a grocery store, replacing a deteriorating garage with a new public garage, and providing a housing type that does not currently exist in the market, the tower is expected to create 650 construction jobs and the grocery will create at least 30 full-time jobs,” Olberding said.
Generally, the city’s laws require that all projects in excess of $50,000 must be solicited for competitive bids. The requirement involves spending that includes buying supplies, services or entering into construction contracts.
The Fourth and Race project has an estimated cost of $81.49 million, according to city documents.
Of the amount, the developer would provide $60.8 million, and the city would provide $12 million.
Also, the project takes into account $2.3 million in sales tax savings, and $5 million in federal New Market Tax Credits.
Still, the project has a $1.35 million funding gap. City staffers and the developer are working to resolve the issue. If it can’t be solved, some floors will be deleted from the 30-story tower, emails stated.
City administrators chose the developer and a specific plan for the site in December, without City Council being informed.
“I did not learn of the Flaherty proposal until the city manager presented his Parking Modernization Plan with the $92 million of recommended projects,” said Vice Mayor Roxanne Qualls, who heads City Council’s finance committee.
“I was aware in late 2012 of the city's efforts to acquire the garage,” Qualls added.
Council members contacted for this article said they didn’t have enough details yet about the Fourth and Race project to comment. They are reviewing records.
“I don’t have any thoughts to add right now,” said Councilman P.G. Sittenfield. “I want to gather
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