Cuyahoga County taxpayers could take a nearly $18 million hit as commissioners resurrect efforts to sell the long-vacant Ameritrust complex in downtown Cleveland.
Commissioners are considering new staff-recommended asking prices ranging from $22.5 million to $28 million for the century-old rotunda, 28-story tower and surrounding buildings at the southeast corner of East Ninth Street and Euclid Avenue.
Yet any deal fetching less than the $40 million-plus in tax dollars already invested in the complex would violate a pledge Commissioner Tim Hagan made not to take a loss.
“We’re not going to give the site away without getting what we’ve got in it — period,” Hagan told the Plain Dealer in November 2007.
Hagan declined to comment Friday, but Commissioner Peter Lawson Jones acknowledged in a telephone interview that he and his colleagues are mulling prices that would result in a loss.
“Obviously I’d like to stick with $30 million,” Jones said. “But if the market will only support $25 million, I’d obviously consider that.”
At Hagan’s urging, commissioners bought the complex in 2005 for $21.8 million with the dream of creating a grand new headquarters for county government. They added $3 million to the bill for a real estate consultant, the Staubach Co.
Over the next two years, commissioners paid $12.8 million for construction and asbestos removal contracts and $5.1 million for a connecting parking garage.
Then, in 2007, a lack of money forced them to scrap plans for a headquarters. And last year, a $35 million deal to sell to a private developer collapsed.
Central Services Director Jay Ross in December recommended discounting the asking price from $35 million to $22.5 million, according to a memo obtained by The Plain Dealer through a public-records request.
“Based on the current economic climate, the original $35 million price is not realistic,” Ross wrote. “While it represents a large share of the costs for the purchase and upgrade of the complex, it is unlikely that the county will receive any bids with that minimum price. The county should proceed with a realistic view.”
He wrote that the $22.5 million reflected the need to recoup some of the county’s investment, the benefits of private development and the current operating costs of the complex.
The county spends at least $10,000 a month on maintenance and utilities for the property. And while profits from the parking garage cover some of those costs, lackluster showings from the Indians and a shorter-than-hoped-for Cavaliers season mean special-event revenue is down significantly.
In a May memo, Ross suggested an asking price of $28 million, based on interest from a new developer.
“The longer we hold it,” Ross said Wednesday, “the more capital we may have to put into that.”
Jones said he would like to sell the complex this year, before he and his lame-duck colleagues are replaced by a new county executive and 11-member council.
“I’d like to bring closure to this so there’s one less thing the next regime has to be concerned about,” he said.
But he said he would be willing to wait if experts believe the county could fetch a better price next year.
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Article courtesy cleveland.com