On June 23, The Blade published the following costs involved with the renovation of the Fiberglas Tower:
≺ $10 million from a 20-year, Section 108 loan from the federal Department of Housing and Urban Development.
≺ $2 million from a Brownfield Economic Development Initiative grant, which can be used to pay the interest on the Section 108 loan.
≺ $7.277 million in new market tax credits.
≺ $5.381 million in federal historic tax credits.
≺ $6.407 million in Ohio state tax credits.
≺ $3 million from an economic development grant.
≺ $1 million from a climate-control energy efficiency grant.
≺ $3 million from a Clean Ohio Revitalization Fund grant.
≺ $750,000 from Clean Ohio Assistance Fund.
≺ $1.5 million developer contribution.
≺ $3 million developer equity.
≺ $1.49 million developer deferred fee.
Note that of the 44ish million dollars, the owner of the building was putting in a total of $1.5 million in cash, and then would be paying themselves $1.49 million for developing the building. While the $3 million in developer equity leads a person to assume that they would be contributing significant equity, it appears as though the only concrete cash commitment to the project is a less than impressive $0.01 million or $10,000 ? WTF?
Today the Blade came out all in favor of the project because of the laughable notion that the 10 Million that the city is guaranteeing is not an issue, because the City would get this gem if the deal goes sideways. It could sell the property and get all the 10 million back.
The city could just pick from any of the dozens of companies and individuals that are waiting to buy this building. Yah, right.
I think the Blade would be a lot more critical of the structure of the deal if they were going to be on the hook for the 10 million.
Soon the asbestos will be removed. That would be a great time to review the true value of this decrepit giant.
When this scheme becomes a big mess, this guy might be able to help fix the problem(s).
i brought this issue up in a previous thread.
i assume the developer contribution offset the developer deferred fee as well. the developer is entitled to some fee but i don't know how those numbers typically work out - anyone have any info on this?
the $3 million developer equity - what is that? you are discounting that completely? why?
i agree the deal sounds like a scam - a bad movie we have all seen before - but i it would appear their contribution would be the $3 mill while the other two numbers offset?!
I discount it completely because I don't think that equity in that building is worth anything. Is certainly NOT cash being put into the project.
I suppose it could be on Eyde's books at $3M and they needed to pledge that equity to show some reason they should qualify for $9M in grants, $19M in tax credits and a non-recourse loan for $10M. Pledging an asset with a book value of $3M is a far cry from putting $3M into a project.
One other note, the first Blade story above says that Toledo council accepted a $3M grant for cleanup and that "Eyde Co. was to supply $1 million to match the grant." I think that's Bladespeak is due and hasn't been paid yet. The article did not say "Eyde Co. is to supply . . " so the money was due in the past. While the wording implies that it is unknown if the $1M in matching monies has been paid or not, the Blade is clearly in favor of this going forward and I wouldn't be one bit surprised if the $ hasn't been paid yet and the Blade chose not to mention that in the article.
As soon as the city can explain the Commodore Perry and Hillcrest Hotel quasi-purchases (where the city pays millions to the developer, but won't own the property in the end), then I'll agree to the OC tower deal.
Has anybody told the city that gigantic towers are not "in vogue" for corporation headquarters anymore outside high-density metropolises (of which Toledo is not)? Considering that OC built a flat complex along the river 10 years ago and there's still a fairly empty tower sitting over by the MLK bridge (The OI building)? That companies are going to "flatter" models of operation and building structures so their employees can communicate better with each other and not be divided by "floors"? Might be something to consider before sinking $50 million into this project.
Was I on crack or does the city not have a $50 million debt currently? Instead of paying the bills we owe (and perhaps keeping some employees to boot), we're going to finance someone's property?
I wonder why people have no confidence in government anymore...