Cincinnati mayoral race: Qualls defends real estate sales near streetcar route

She bases view on a 2010 opinion to City Council

CINCINNATI -- Mayoral candidate Roxanne Qualls said Tuesday her work as a Realtor selling properties along a planned streetcar route poses no conflict of interest with her role as vice mayor.

Qualls was reacting to a WCPO report Monday about allegations from supporters of her opponent, John Cranley.

They questioned whether Qualls’ lobbying for the streetcar project while also selling properties that could increase in value once the system is built was appropriate.

A subsequent review of real estate transaction records by WCPO found eight of the 21 properties sold by Qualls since 2011 are located near the streetcar route.

Although Qualls has been running for mayor since December, she never before disclosed publicly that she sold properties along the route until WCPO’s report.

“That is really trying to create something that doesn’t exist,” Qualls said Tuesday.

At a press conference, Qualls cited an email sent to her by City Solicitor John Curp. The email was written earlier that morning, at 11:19 a.m., a day after WCPO’s report was published.

“On a minimum of two prior occasions, you have sought opinions from the Law Department regarding your personal and professional interests in property near the streetcar route,” Curp’s email stated.

“We have advised that Ohio ethics laws and current opinions of the Ohio Ethics Commission do not preclude you from participating in deliberations and voting on streetcar related matters,” the email continued.

Curp’s email then cited a generalized opinion issued in May 2010 to all nine City Council members in office at the time.

The 2010 opinion stated ethics laws only prohibit a council member from participating in matters involving the streetcar if the person has an ownership or development interest in property directly adjacent to the route.

But Qualls said she hasn’t personally sought a specific opinion from the Ethics Commission based solely on her circumstances.

In fact, Curp’s email ended with, “As always, the Law Department is willing to seek a formal opinion from the Ohio Ethics Commission. We work closely with the OEC staff to ensure consistency with our respective opinions (and) are willing to do so in this instance.”

Although Qualls read most of Curp’s email to reporters at her press conference, she didn’t mention the final paragraph.

Asked whether she intended to seek a formal opinion from the Ethics Commission, Qualls said legal guidance provided thus far was sufficient and another opinion wasn’t needed.

Streetcar supporters, which include Qualls, have said the project’s primary benefit is sparking redevelopment along the route and increasing property values.

Qualls said questions about her real estate sales were “outlandish claims” made by “radical supporters” of her opponent.

“They are desperate. They know how close this race is,” Qualls said. “Mr. Cranley himself is obviously engaging in the politics of personal attack and personal destruction.”

Cranley defended his inquiries, adding Qualls should’ve disclosed the real estate sales along the route.

“The public has a right to know,” Cranley said. “Instead of attacking me, she should be making sure voters have all the information they need about her dealings and not leaving it up to the media to report it.”

The May 2010 ethics opinion cited at Qualls’ press conference was issued after the city solicitor had given advice to a council member that was contrary to a later opinion by the Ethics Commission.

In 2009, Curp advised then-Councilman Chris Bortz that he didn’t have a conflict of interest when voting on matters related to the streetcar. Bortz’ family owns a company that developed properties along the planned route.

But when Bortz asked for a specific opinion from the Ethics Commission, it advised him to not participate in any council decisions about the project – advice directly contrary to Curp’s.

Curp had told Bortz that any financial benefits to his family’s company from the streetcar would be general and not disproportionate to those enjoyed by other property owners and developers.

Curp’s rationale in his Bortz opinion is the same reasoning he gave to Qualls that determined she probably doesn’t have a conflict.

Later in 2009, the Ethics Commission determined Bortz did have a conflict based on the city’s feasibility study that concluded property values along the route would increase significantly.

“Based on your own statements and the findings of the feasibility study, it appears that the streetcar project will have a definite and direct financial impact on property in which your father has an interest,” the commission told Bortz.

Although Qualls hasn’t requested a specific opinion from the Ethics Commission, Curp sent his latest advisory to the agency late on Tuesday.

Paul M. Nick, the Ethics

Commission’s executive director, generally supported Curp’s conclusion but didn’t give him a definitive answer.

“Assuming that the only interest of the public official is the flat percentage fee, then I think your view … is correct and consistent with prior commission guidance,” Nick wrote.

Cranley noted that Qualls was on City Council when the dispute arose about Bortz’ ability to vote on the streetcar project.

“She knew that Curp told (Bortz) he could vote on the streetcar but the Ethics Commission said he couldn’t,” Cranley said. “It’s not like this was happening in another city.

“Why wasn’t she more forthcoming about this issue and why didn’t she seek an opinion?” Cranley added. “Why wait until you’re asked by the media?”

The $133 million streetcar system is under construction in downtown and Over-the-Rhine. When completed, it will feature a 3.6-mile looped route with 18 stops.

Planned since 2007, the project has become a central issue in the mayoral campaign. Qualls supports the project, while Cranley is opposed.

A study commissioned by the city indicates residential property values along the route in Over-the-Rhine would jump 40.4 percent by 2025 if the system were built, while property values downtown would jump by 71.2 percent.

Among the properties Qualls sold is a condominium at 30 E. Central Parkway. It sold for $389,000 in March 2012 to Judi Craig.

Craig is vice president at Parsons Brinckerhoff, a consulting firm that has worked on the streetcar project. The firm has received $13.8 million in city funding during the past few years.

Craig and others employed by Parsons Brinckerhoff have contributed to Qualls’ mayoral campaign and hosted fundraisers for her.

Typical real estate commissions are between 3.5 percent and 7 percent, meaning the sales generated between $86,590 and $173,180 in fees.

But Qualls said Tuesday that her actual take-home pay from the sales is much lower, between 1 percent and 2 percent.

That means she personally was paid between $24,740 and $49,480.

Asked for a specific amount at her press conference, Qualls replied, “I would have to add that up.”

Qualls said she doesn’t specifically plan on selling properties near the streetcar line, adding it’s based on what her clients want.

“As a Realtor, I represent buyers and sellers,” she said. “I’ve represented buyers and sellers in Mason, in West Chester, Pleasant Ridge and Kennedy Heights. When I take on clients, they basically make the choices about where they want to live, not me. There is no conflict here.”

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