Money for old rope?- A Taxpayer’s Question

April 15, 2015 at 10:54 pm 5 comments

Words – I like words – I don’t like grammar (as regular readers have sussed http://www.thefreedictionary.com/sussed – but I do like words .
I like the origin of words and sayings.

MONEY FOR OLD ROPE –
Source:http://www.bl.uk/collection-items/women-picking-oakum-in-the-workhouse
unknown-women-PRO-30_69_1663_38_1900-1909

Rope made from hemp had a limited lifetime. When it wore out it was picked apart and recycled. It was used for caulking. Rope fibres (known as oakum) were hammered into the seams between planks of a ship and hot pitch was poured over it. This was done to waterproof the ship. Of course you got money for the old rope. The phrase came to mean money for anything (seemingly) worthless.

City  of Lorain
It takes a great deal now to get me out of my lethargic and apathetic state. Mostly, I read the news of Lorain and elsewhere and shrug. Been there done that – tried to fix it- and the scum still rises to the top of the pond .

Stagnant , anchored in apathy, every once in a while my previous curiosity will surface. Last week was one such occasion -I noticed in the reading of City Council Meetings March 16th – an ordinance passed by all members of city council, with very little discussion with the Director, Doug Rangel- of the Lorain Development Corporation-
http://www.cityoflorain.org/economic_community_development/lorain_development_corporation which is funded by three sources ( basically coming back to we, the taxpayer)

Logo%20and%20Heading%204-11(1)
NOTE: A follow up post explaining how Lorain Development Corporation operates will be the next post on this blog
Prime Industries
The exchange between council and Director Rangel can be found here- page three
3-16-15regmin
pertaining to a property found at 1817 Iowa Avenue- Prime Industries.
Unfortunately I remembered $100,000 dollars with much hoopla being given to Prime Industries. http://www.loraincounty.com/manufacturing/feature.shtml?f=12666
prime_industries and media success stories such as the Morning Journal article October 2010- ALL “SOUNDED” VERY PROMISING
http://www.morningjournal.com/general-news/20101003/prime-industries-prospers-by-going-after-niche-markets

Local customers include amusement park Cedar Point, which turns to Prime Industries for safety harnesses for its gravity-defying rides.
In addition to making new parts for Cedar Point, Prime Industries refurbishes safety harnesses after thousands of roller-coaster passengers have worn them out…..

… Other local customers include Invacare Corp., in Elyria; Bettcher Industries, in Florence Township; Nordson Corp., in Westlake; and Latanick Equipment Inc., in Huron. Prime Industries also makes parts for missiles built by Lockheed-Martin for use by U.S. armed forces in Iraq. With more than 500 customers, the company started as a division, called Advanced Foam and Plastics, of Kindt-Collins Co., based in Cleveland

The headline is a bit misleading( prospers???) because halfway through the article the history states:

Advanced Foam and Plastics was created to serve the foundry industry, but by 1984 it was known as Prime Design.
In 1997, Prime Design received $292,000 from Lorain to relocate here from Cleveland, creating 22 jobs.

A $100,000 loan from the city in 2000 helped expand, but by 2002 Prime Industries was up for sale

AND THEN

First, Rich and Joe Persico paid off the $292,000 loan from 1997, and then put up $145,000 of their own capital.

“Then” the city of Lorain loaned them $400,000 and a Warren bank also loaned them $400,000 in 2002 Prime Design became Prime Industries.

In May 2008, Lorain loaned the company $100,000 to gain new contracts.

That is $600.000 by my calculations we have had some back in the employee income tax but still money for old rope imho.
money-pile1
Oh my ! the money tree that is government, because now- today- Lorain is wanting to “enter into a loan assignment agreement to accept a priority mortgage position in lieu of a guarantee to the purpose of taking back the building ( 1817 Iowa)
AND then what do we do with the building- will wonders never cease We will try and sell it , lease it to a business and try and put some shops back there.

pond-scum-11-19-08

Sourced with permission http://thecrossedpond.com/2008/11/19/pond-scum-23/

There it is again the Lorain Mantra for spending money to get money – It will bring us jobs- it will save jobs- it will promote Lorain- Money for old rope????

Let us segue back to just a couple of the buildings that we have acquired in Lorain’s downtown through similar circumstances . The belly upping of Allegiant Medical Equipment– again touted with much hoopla when it arrived:
737
737 Broadway – leased to a non profit The Lorain Arts Council for $350. a month.
http://www.morningjournal.com/general-news/20120313/lorain-arts-council-could-move-to-broadway-with-video

But at least the City of Lorain doesn’t have to pay property tax on that one as it is leased to a non-profit!. Lorain gets $350 a month and the hope of visitors along Broadway.

photo Dan Brady

photo Dan Brady


The 770 Broadway again loans and getting it back
which was supposed to be rehabbed after the loan fiasco on that property didn’t end up with what we were told
http://danielebrady.blogspot.com/2012/12/a-ghoulardis-goulash.html
photo Dan Brady

photo Dan Brady

” The company( American Demolition) will tear down part of the building and restore the interior and exterior of the remaining section. Contractor Don Buchs worked with architect Gary Fischer of Arkinetics to develop the plan for the 14,640-square-foot building.

The northwest portion of the building will be torn down to make way for tenant parking and a trash container and the south side, the retail areas along West Eighth Street, would also be demolished.

http://chronicle.northcoastnow.com/2012/03/02/lorain-considers-demolishing-former-ghoulardis-building/

Within weeks of buying it, we find out that it’s totally useless,” said Councilman Dan Given, D-at large.

Given called the purchase of the building by the administration of former Mayor Tony Krasienko a “debacle,” and Given had the wording of the ordinance for advertising changed so that new Service Director Robert Fowler must get Council members’ approval before signing off on any sale.

We have the money thrown at St. Joe’s old hospital
st-joes
https://thatwoman.wordpress.com/2012/02/13/st-joes-community-center-lets-get-fiscal-physical-lets-get-real/ and then
642
642 Broadway – again the loans , the acquiring the building. BUT the city of Lorain on this building has to pay property taxes of $12,750.00 yearly because this building houses two FOR profit tenants
Delta Pro which pays $630.00 per month- Looks like we the taxpayer are responsible for quite a bit . https://www.chamberofcommerce.com/vermilion-oh/7007905-black-river-audio-delta-productions
lease
The other tenant is Follow the Fish – a much publicized media and county darling – an arts and events for profit business. https://www.facebook.com/FollowTheFishArtAndAdventureTrails
they are in the “business” of art , events and promotion .

photo Lisa Miller

photo Lisa Miller


Apparently they started off as a POP UP SHOP http://www.morningjournal.com/general-news/20121216/lorain-pop-up-shops-continue-business-downtown-during-holiday-season-with-videos for the holiday event of Light up LorainNovember 1st 2012 for two months and they were to pay, as the other Pop Up shops were supposed to do, the utilities ( no rent for that period) and an insurance coverage.the lease expired on December 31- 2012-
Copy of lease conditions here
A lease follow the fish

Follow the Fish Adventure Trails(FFAAT) DID NOT, according to the city , pay the utilities for that two month period and have NOT paid any rent or utilities in the ensuring months all 28 months. The city has not received a copy of an insurance contract.

Presumably FFAAT have been earning income, one assumes, from their various fundraisers –
http://www.visitloraincounty.com/ai1ec_event/ignite-2015/?instance_id=
http://chronicle.northcoastnow.com/2012/06/25/video-follow-the-fish-public-art-project-debuts-at-festival/
http://www.morningjournal.com/general-news/20140623/lorain-follow-the-fish-artshop-planned-for-june-28
http://www.morningjournal.com/general-news/20150409/firefish-2015-preview-party-set-for-may-7-in-lorain
and fish sales and their 40% commission charge .

It would have been nice to have paid the taxpayers back for the time FFAAT have occupied the building using the space and utilities for various events and promotion of art works etc. Even if they paid the same as Lorain Arts Council $350.00 that $9,800 would have gone a long way in covering the $8,000 utility bill and the $30,000 in taxes during that time .

Follow the Fish Adventure Trails LLC latest looking for funding fundraiser, along with the Lorain County Chamber of Commerce is May 7th at the Palace Theatre
sparks flying
I am all for promoting Lorain and her businesses but at what cost to the taxpayer and when does losing money become acceptable?

And now back to the reason this post started Prime Industries. Curiosity as to why we were seemingly wanting a building back that had an outstanding tax bill of $184,815.82 . Doug Rangel Director of Lorain Development Corporation has been most helpful in replying to my myriad of questions as has Director of Public Building and Housing Leon Mason.

Doug Rangel answered my enquiry as to why???? :

“The real estate tax burden is one I will have to deal with and they for years had been trying to get a reduction because taxes were even higher than they are now. The loss of cash flow continued to hurt their ability to take larger jobs because while companies would say we will pay in 30 days, it would inevitably take longer. The situation that we have arrived at is not one we like to see but it is reality
More importantly, that legislation allowed me to take that first mortgage instead of going through a foreclosure and likely being wiped out. With this first and second mortgage, I can now complete foreclosure and work to recoup the dollars through a sale or lease of this property. County says its worth $818,000, though it was appraised at $2.1M years ago. Property values around here have taken a serious hit, just like homeowners. The devaluation of properties didn’t just hurt the residential market, but it also hit the commercial market as well.
What we have learned from the business environment over the past 6-8 years is that any business can be impacted even large ones though they have a better chance of surviving than the smaller ones.

break even
This particular taxpayer understands the issues at hand BUT ( and there it is again ) when dealing with these city owned properties acquired through defaulted loans etc. I would ask can we please , when we take on these structures we at least break even when “leasing”, selling, whatever – just so it doesn’t cost us any more of “our dollars “ because as Maggie Thatcher ( like her or not) said : There is no such thing as public money, there is only tax-payers’ money.

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Entry filed under: a Cow -elle opinion, city of lorain, commentary. Tags: , , , , , , , , .

The Ghost in the Pond- continued-2015 Lorain Development Corp- Lorain- Op ED

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