As I was unable to attend last week’s committee meeting when you heard Ordinance 746-2024 to carve out a new tax increment financing district from the approved Shore-to-Core-to-Shore TIF, I am submitting these written comments now.

We applaud that the proposed community benefits agreement (CBA) includes upfront money for the neighborhoods, and, importantly, that if Bedrock does not make good on key commitments under the CBA, the city can withhold reimbursements for public improvements or, if necessary, deduct from Shore-to-Core-to-Shore TIF proceeds. These are positive measures that promise to provide benefits to Clevelanders and add an element of accountability to the new TIF.

As good as those provisions are, the CBA needs to be kept in perspective. The $5 million to be made available soon for the neighborhood investment fund, or even the $25 million overall in such funds over time, are less than the average $26.2 million a year Cavaliers center Jarret Allen will get in his new contract announced last week. While I’m a Cavs fan like I’m sure most of you are, this underlines that city residents are getting only a small amount in relation to a $3.4 billion project.

Moreover, there are key questions about the TIF that were not answered in the three-hour public session. While the administration says this TIF and the infrastructure investment supported by the Shore-to-Core-to-Shore TIF is necessary for this private development to take place, nowhere is there a suggestion that the city questioned the necessity of such support or that it negotiated to minimize the amount the city would provide. How much is this carve-out TIF estimated to generate over 45 years, that will go not to public services but to supporting the Bedrock project? While we’ve seen news coverage that the total city support including payments from the Shore-to-Core-to Shore TIF will amount to more than $1 billion, no figure was disclosed. What is that number and how do we know that such a huge commitment was needed?

City officials emphasize that no general fund money is going into the project and that financing for it is all based on the project itself. In reality, a sizeable share of the financing is coming from areas outside the Bedrock riverfront project, namely, payments in lieu of taxes from development elsewhere downtown and the Near West Side – areas in the already approved Shore-to-Core-to-Shore TIF district. Nor do we have an estimate, however small, of how much property tax revenue in that district the city itself could expect to see over the next 45 years that will instead go to the Bedrock project.

Section 8 of the proposed ordinance says in part regarding the Bedrock TIF: “The Service Payments and Property Tax Rollback Payments shall be used for costs of urban redevelopment, including costs permitted by the TIF Agreement, or for other purposes as determined by the Director of Economic Development.” This would seem to give the economic development director enormous leeway to spend what are projected to be very substantial monies. Has the council examined this closely? What does this mean for the council’s role?

Various council people noted at the hearing that the city is taking hundreds of millions of dollars that otherwise would support the library, county health and human services, and other key public institutions. While this is allowed by state law, is this in fact the best use of those resources? Unfortunately, when this was raised at last week’s hearing, the answer was there is no additional such impact from the Bedrock TIF because the properties it includes were covered in the Shore-to-Core-to-Shore TIF approved earlier this year. That’s technically accurate, but the question is still germane. Why does council feel that it should protect the schools, which are held harmless under the TIF, but not these other public institutions and services?

While there are other positive elements in the community benefits agreement, the affordable housing provisions do not appear to have been drawn up based on the incomes of Cleveland city residents. Even the 80 units deemed “affordable” for those with 60% of the Area Median Income do not appear to be truly affordable. The city’s documents peg the 2022 median household income in Cleveland at $37,351. Sixty percent of this amount is $22,411. Even monthly rent of $1,022 for a one-person household, or $12,264 a year, spelled out in documents accompanying the proposed ordinance is more than half of this person’s annual income, which is not affordable. If the city is using Area Median Income of an area larger than the city itself to determine affordability, it should substitute actual incomes of Clevelanders.

Despite some real accomplishments in this deal, it lacks transparency and sufficient accountability. A poor city is transferring vast resources to a billionaire with too few answers. That is not sensible policy.