CHICAGO - Cuyahoga County, Ohio, commissioners expect to announce within the next 60 days a location in downtown Cleveland for a long-planned convention center and medical mart that would be funded with revenue from a sales tax increase that went into effect last year.
Selection of a site would represent a step forward for the stalled project, which has started to attract criticism in part because the county began collecting the sales tax increase last fall. Last week a candidate vying for a seat on the three-seat county board called to suspend the tax hike until the deal is on firmer ground.
Cleveland has been pushing to replace its current underground, turn-of-the-19th-century convention center with a new facility for more than a decade. The proposed new $400 million center, with an adjacent medical mart, could be built on the site of the current convention center or at another of a handful of locations being considered in downtown Cleveland.
Fred Nance, a public finance attorney from Squire, Sanders & Dempsey LLP, is chairing the site selection committee and is leading the effort to replace the current facility.
Chicago-based Merchandise Mart Properties Inc. would build and operate the complex under the current terms of the deal. Officials are still negotiating whether the Merchandise Mart Properties, Cleveland, or Cuyahoga County would own the facilities. The company owns several showroom design centers, including the Merchandise Mart in Chicago - the world's largest commercial building - as well as the L.A. Mart and the Boston Design Center, and operates hundreds of trade shows across the country annually.
The three-member county board of commissioners last June approved a 0.25% sales tax increase to 7.75% from 7.5%. The additional $40 million a year generated by the increase is being funneled into a reserve account for the project. Under the current agreement between the county and Merchandise Mart Properties, bonds would be issued to finance construction and repaid with the sales tax revenues, said commissioner Tim Hagan.
The project has been delayed over the last several months as the site committee studied various locations and terms of the deal were worked out with Merchandise Mart. The delay prompted one county board candidate who originally supported the project to call for the suspension of the tax increase until the deal was on firmer ground.
Deborah Sutherland, who is running against commissioner Peter Lawson Jones, said last week she supports the project but that it's moving too slowly. A final deal was to have been in place by the end of 2007, Sutherland said.
But Hagan said there's "zero" chance that the sales tax increase will be suspended. "We're going forward with it, and we'll have a location within the next 30 to 60 days," he said.
Despite reports of the project exceeding its $400 million budget, Hagan said the chief parties are convinced it can be done without major overruns. "We're going to do it within that budget and everyone feels that it will be enough, including the Merchandise Mart," he said. "They're going to drive this thing, and I don't think they're going to sign off on a building that would have major overruns."
As of April 2008, sales tax collections in the county were up 23.5% to $40.3 million compared to last year because of the increased rate that took effect in October 2007.