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$200k Grant for Senior Citizen's Center Buyer

Printed From: MiddletownUSA.com
Category: Middletown City Government
Forum Name: Community Revitalization
Forum Description: Middletown Community Revitalization News
URL: http://www.middletownusa.com/forum/forum_posts.asp?TID=6631
Printed Date: Dec 16 2017 at 7:39pm


Topic: $200k Grant for Senior Citizen's Center Buyer
Posted By: Analytical
Subject: $200k Grant for Senior Citizen's Center Buyer
Date Posted: Nov 30 2017 at 6:25pm
S T A F F   R E P O R T

For the Business Meeting of December 5, 2017
DATE: November 9, 2017

TO: Douglas Adkins, City Manager
FROM: Jennifer Ekey, Economic Development Director Prepared by: Alexis Fitzsimmons, Assistant Economic Development Director

PURPOSE

To authorize the City Manager execute a grant agreement with Mike Allen Real Estate Holdings, LLC dba BMW Motorcycles of Greater Cincinnati (the Developer).

BACKGROUND and FINDINGS

Mike Allen Real Estate Holdings, LLC dba BMW Motorcycles of Greater Cincinnati is purchasing parcels Q6511011000034, Q6511014000060, Q6511014000059, Q6511014000057, Q6511014000055 from the City of Middletown for his project to renovate the old Middletown Senior Center building located at 140 N. Verity Parkway and create a BMW branded motorcycle dealership at that location. The dealership will prove new and used motorcycles, parts, service, and general merchandise to its customers. The project would include an investment of $1.273 million dollars in construction and upgrades to the facility, including separating all utilities from the City’s municipal building, and will create twelve (12) new full-time jobs and create $375,000 in new payroll. The project will start construction during the first quarter of 2018 and be completed by December 31, 2018. This grant will go towards the cost of separating the HVAC, water, electric, and gas utilities from the City Municipal Building. The Developer will be participating in the newly formed PACE program to assist with this transition and other energy efficiency upgrades. The total cost of separating the utilities from the City is approximately $200,000. 

ALTERNATIVES Not providing the grant.

FINANCIAL IMPACT The City will benefit from the separation of the utilities from the old Senior Center Building.

EMERGENCY/NON EMERGENCY 1st Reading on December 5th and 2nd Reading to follow on December 19th, 2017. Small Business Economic Development Grant Mike Allen Real Estate Holdings, LLC dba BMW Motorcycles of Greater Cincinnati

DEPARTMENTAL CLEARANCES Law Department

ATTACHMENTS Grant Agreement



Replies:
Posted By: spiderjohn
Date Posted: Nov 30 2017 at 6:47pm
sounds high, though I am no expert
Mike Allen LLC can definitely afford to pay his own taxes/expenses rather than shifting the burden to current businesses and residents of Middietown

So do the tax exempt(on their own properties) downtowners pick up their fair share of others' tax breaks?


Posted By: whistlersmom
Date Posted: Dec 01 2017 at 8:18am

So we’re selling Mike Allen Real Estate Holdings, LLC this property for $300,000, THEN

$250,000 rebate goes back to MARH, LLC

+$200,000 grant goes to MARH, LLC

=$450,000 Total value of this deal for MARH, LLC

-$300,000 Sale price/property value

=$150,000 Council “will pay” MARH, LLC to take the property off their hands

plus a 12 year 100% tax abatement to “sweeten” the deal.

And if Mike Allen doesn’t or can’t do anything with the four city building lots included in the newly created ESID / PACE we may have to buy them back at whatever Mike Allen wants … like $100,000 each maybe. What is the purpose of these four “city building lots” being included in this “deal” anyway?. Explain all of this Mr Adkins!!!



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"The only thing necessary for the triumph of evil, is for good men to do nothing" Edmond Burke


Posted By: whistlersmom
Date Posted: Dec 01 2017 at 8:23pm

Check this out … in the Workbook the Resolution R2017-40 :

CONTRACT FOR SALE OF LAND FOR DEVELOPMENT

(b) Submission and Approval of Construction Plans.

Prior to the execution of the Agreement, the Developer has submitted to the City, the Developer’s proposal for the redevelopment of the Property by the construction of improvements thereon. These documents shall be maintained by the City and shall be a part of this Agreement, as shown on Exhibit “B”. All work performed by the Developer shall be in accordance with all state and local laws and regulations. The Developer shall apply for and obtain all necessary permits prior to performing work on the Property. All work with respect to the improvements to be constructed or provided by the Developer on the Property shall be in conformity with Exhibit “B”. The term “Improvements”, as used in the Agreement shall be deemed to have reference to the improvements as provided and specified in the Exhibit “B”.

When you look up Exhibit B ….. it says:

Exhibit B (Plans)

The preliminary site plan proposals and all accompanying documents, which constitute Exhibit “B” to this Agreement, are maintained on file in the office of Economic Development.

Mr Adkins, do these plans exist? If so why does their disclosure have to be by special request at the city building according to your Resolution No. R2017-40 and presented to Council for approval sight unseen!!!!Council and the public should have ready access to these plans before a vote on their adoption. WHY ALL THE SECRECY?



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"The only thing necessary for the triumph of evil, is for good men to do nothing" Edmond Burke


Posted By: whistlersmom
Date Posted: Dec 02 2017 at 9:04am

There’s a sickening sweet odor coming from the proposed sale of the Senior Citizen’s Building. Let’s examine the PURPOSE of the Staff Report that Mr Adkins has directed his staff to draft concerning a grant agreement with Mike Allen Real Estate Holdings, LLC. Quote in blue:

PURPOSE

To authorize the City Manager execute a grant agreement with Mike Allen Real Estate Holdings, LLC dba BMW Motorcycles of Greater Cincinnati (the Developer).

Where is the money coming from for this grant? The PACE program doesn’t provide any funds! Does council understand that Mr Adkins is getting permission from council to use city money for the grant??? If council allows this, the tax payers foot the bill … and the city is already bankrupt!


The funding will come out of the city’s General Fund!!! 

That’s where some or maybe most of the water and sewer separation charges go that Mr Adkins keeps increasing and using as a slush fund. Remember he already had council approve using Sewer Separation Funds to repair the streets. Money is regularly transferred out of Water and Sewer funds into the General Fund where it’s earmarked purpose disappears to be used for any payout Mr Adkins desires… sounds like laundering!


Why does Mr Adkins want to give our money to a buyer who appears to be so financially able with the promised $1.273 million investment in the sales agreement? He’s already getting a $300,000 property plus “4 city building lots” for $50,000 (or maybe for free plus $200.000 cash being handed over to him if this grant is approved by council).


Phew!! Can you smell that???



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"The only thing necessary for the triumph of evil, is for good men to do nothing" Edmond Burke


Posted By: whistlersmom
Date Posted: Dec 02 2017 at 8:32pm



We need to examine the rest of the Staff Report that Mr Adkins has directed his staff to draft concerning a grant agreement with Mike Allen Real Estate Holdings, LLC. Quote in blue:


BACKGROUND and FINDINGS

Mike Allen Real Estate Holdings, LLC dba BMW Motorcycles of Greater Cincinnati is purchasing parcels Q6511011000034, Q6511014000060, Q6511014000059, Q6511014000057, Q6511014000055 from the City of Middletown for his project to renovate the old Middletown Senior Center building located at 140 N. Verity Parkway and create a BMW branded motorcycle dealership at that location. The dealership will prove new and used motorcycles, parts, service, and general merchandise to its customers. The project would include an investment of $1.273 million dollars in construction and upgrades to the facility, including separating all utilities from the City’s municipal building, and will create twelve (12) new full-time jobs and create $375,000 in new payroll. The project will start construction during the first quarter of 2018 and be completed by December 31, 2018. This grant will go towards the cost of separating the HVAC, water, electric, and gas utilities from the City Municipal Building. The Developer will be participating in the newly formed PACE program to assist with this transition and other energy efficiency upgrades. The total cost of separating the utilities from the City is approximately $200,000. 


Note that the “grant will go towards the cost of separating the HVAC, water, electric, and gas utilities from the City Municipal Building.” Upon a walk around inspection of the property you will find a new gas meter has already been installed; a large electric panel is there, ready to simply be hooked up; and the city has agreed to “cap off” the water line but they will probably just install a new water meter then and there. So, what of these changes could possibly cost $200,000?? because the Staff Report says “The total cost of separating the utilities from the City is approximately $200,000.” In reality, all of this separating the utilities” is quite ordinary and would cost perhaps $1000. Mr Adkins and MARH need to explain exactly what the additional $199,000 is installing/separating and what exactly are the “other energy efficiency upgrades?? It certainly would be very strange if the HVAC is connected to the city building’s HVAC. And, historically, that building was air conditioned as part of the original design by HUD. Even a new energy efficient HVAC isn’t worth $199.000. And the ESID and PACE program requires limiting investments to high return in terms of gains in alternative or energy efficiency. Mr Adkins has chosen to keep crucial plans for the energy efficient programs (if there are any) on file in the office of Economic Development. Council and the public should have ready access to these plans before a vote on their adoption. Mr Adkins, do these plans exist? If so, why does their disclosure have to be by special request at the city building according to your Resolution No. R2017-40 which states:

The term “Improvements”, as used in the Agreement shall be deemed to have reference to the improvements as provided and specified in the Exhibit “B”.

When you look up Exhibit B ….. it says:

Exhibit B (Plans) Exhibit B (Plans)

The preliminary site plan proposals and all accompanying documents, which constitute Exhibit “B” to this Agreement, are maintained on file in the office of Economic Development.

So, it seems that neither the council nor the public has had access to the plans, assuming that they exist.


In addition, the Staff Report says “The Developer will be participating in the newly formed PACE program to assist with this transition and other energy efficiency upgrades.” Here’s the purpose of a PACE program:

Published on the internet by Lexology, a daily legal news feed service.

The PACE policy framework described assessment-based financing as a known public finance tool:

In a typical assessment district a local government issues bonds to fund projects with a public purpose such as streetlights, sewer systems or underground utility lines.

In other words, PACE was designed to extend market acceptance of known security mechanisms such as property tax-based assessments and tax lien status for unpaid assessments to facilitate alternative energy and energy efficiency projects.

But Mr Adkins can’t issue bonds, so he wants to give away $200,000 in city funds thru a grant that he will execute with the approval of city council. That isn’t really within the PACE policy framework of financial tools. And with the 12 year 100% tax abatement a tax-based assessment is not possible.

In the staff report no mention was made as to what “Developer will be participating in” would consist of or what “the other energy efficiency upgrades” would be and at what cost, IF THEY EVER OCCUR. And if they don’t occur isn’t that fraud, especially if the $200,000 grant money disappears and no energy efficient upgrades occur??? We have no assurance of any intention of Mike Allen Real Estate Holdings to participate in an energy efficiency program ... after all the posturing, smoke blowing and fund finagling!!



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"The only thing necessary for the triumph of evil, is for good men to do nothing" Edmond Burke


Posted By: whistlersmom
Date Posted: Dec 03 2017 at 1:15pm

Last but not least, is the touting of the “$1.273 million investment in construction and upgrades to the facility.” What could motivate MARH, LLC to buy a building in a depressed remote area such as Middletown, that will require a $1.273 million investment to make it of any use to the investor’s high-end BMW Motorcycle business? This point alone is enough to raise suspicion about the motivation to locate in Middletown.


How many people in Middletown can afford to buy a BMW Motorcycle? Wouldn’t it make more sense to buy a newer building that’s ready to move into for that $1.273 million, in an affluent community where prospective customers are nearby. Let’s face it, those affluent customers won’t want to travel miles from the interstate to “downtown” Middletown to purchase an expensive BMW motorcycle.


Section 3. DEVELOPMENT OF PROPERTY of the proposed city ordinance, O2017-55 states: In addition to the $50,000 acquisition cost, the renovation will be BMW brand approved upgrades which includes the projected amounts of: $293,000 in construction, $50,000 in machinery and equipment, $100,000 in furniture and fixtures (really, for furniture and fixtures??), and $780,000 in inventory (they think they’re going to sell that much inventory in Middletown!?!?!? with a staff of 12 who will probably be busy twiddling their thumbs). AND NONE OF THIS IS AN UPGRADE TO THE FACILITY WHICH MARH, LLC CAN’T TAKE AWAY WITH THEM IF OR WHEN THEY LEAVE. 


This looks like the usual set up for failure because they will quickly be operating at a loss at a Middletown location and Middletown will be the biggest loser as usual. What if MARH, LLC walks away (taking with them grant money) like so many others who promised hundreds of thousands in investment $ then reneged? They didn’t lose anything, after all they bought those properties for near nothing!!! What if MARH, LLC demands that Middletown buy back (at a profit, say $100,000 each) those 4 “city building lots” that they couldn’t (or wouldn’t) use under the ESID/PACE grant


WHY DOES Mr Adkins CONTINUE TO PUT Middletown IN THIS MONEY LOSING SITUATION ?



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"The only thing necessary for the triumph of evil, is for good men to do nothing" Edmond Burke



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