Fiberglass Tower/Tower on Maumee

The Berdan Building project sounds like more of a stretch (given that the investors don't appear to have as deep of pockets and it sounds like a risk for the city) but I've been waiting for someone to come in and do something with that building. Great location and some interesting architecture. It even looks like they could possibly have indoor parking from the size of the boarded up doors on Huron.

Just read dbw8906's comment on that article and completely agree. If these are such great projects the companies that stand to gain the most should look towards private investors for the funds... not taxpayers. This shit is out of control.

The lowlights from the Blade article:

When government funds are added to the pie investors take risk they never would have never taken with their own money. Causes risk to be taken that the market would never support, just ask the 2 billion our Fed has dumped into Solyndra and other failed ventures. It does guarantee short term expansion but it doesn't guarantee success.

By why not the fury of the 22 million given to Chrysler? It's not like Toledo doesn't need cops, teachers, fireman, or to fill in pot holes. Why can't small business get the small sweetheart deals, this is nothing but pandering to Mega Builder X. This is why the 99%'ers need to keep the pressure on govt. as well as big business, Toledo, Columbus, and DC control the purse stings.

End public money for ALL COMPANIES, union and non-union.

Agreed... but why wouldn't Owens Corning do a one time investment in the tower? I would think they would want to make some positive press out of it being it's their former home

These guys also would get some sizable grants...which dont have to be repaid, unlike the loans.

If this is such a great idea, why are they not getting a loan from the banks?

Company "A' comes in and asks for lots of loans and grants to fix up an old building.

Owner of Company "A" owns Company "B", a construction company.

Company "A" contracts Company "B" (with the money from the loans and grants)to do the work.

In the end - Company "A" can't get any tenants in the building and goes under.

Owner blames lack of community support and economy.

Owner still makes hefty profit from the construction company.

I wonder how often this (or version there of) happens?

I really don't have a problem with the Fiberglas plan. They're staking 1/3rd of their own capital to this, which is a good sized portion. Banks are NOT lending right now, especially in the speculative real estate market (which a vacant building definitely falls into). If progress is going to happen, somebody needs to help provide money. It's ridiculous to think that a company is going to have the $30M in cash sitting around to go after an undertaking like this.

However, I'd pass on the Berdan project right now. If they aren't going to be putting any of their own money at risk, we can wait for a better suitor to come along.

I'd say it's similar to a housing issue. You have one guy ready to put a $40K down payment on a house, and the guy next door is going for the no down payment / all financed option. One of those is likely to fall through, and it's easy to see which one that is.

Hey . . . this has been written about before on this same forum. The Blade actually showed the numbers of the deal on June of 2010:

On June 23, The Blade published the following costs involved with the renovation of the Fiberglas Tower:
http://www.toledoblade.com/local/2010/06/23/Downtown-skyscraper-renovation-project-back-on-city-radar.html

Here's the data:

≺ $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.

http://www.toledotalk.com/cgi-bin/tt.pl/article/61496/Blade_wants_to_keep_the_Fiberglas_tower_

Have those numbers changed? NO. The deal still stinks. Kill it and kill it fast.

http://www.13abc.com/story/20651524/tower-on-the-maumee-project-delayed-again

Good Lord, are there no standards of journalism these days?

"The developer want renovation on $30 million dollar project to by Christmas."
"An investor who wants to be part of the project needs a $4 million dollars something called a New Market tax credit."

Nothing like rereading your article before posting it, huh?

Anyway, I'm not really sure what to make of the article. It doesn't sound like the Eydes are overly concerned about it. ie, the project is still moving forward, just not as quickly as it could be.

This is all a bunch of bullshine. Near as I can figure, this is a 20-to-1 leverage fraud. About the only real money that was put up, was the $1.5 million "developer contribution". Everything else is OUR money, stolen from one public source or another.

Since this isn't a real private venture, it will NEVER be driven by real economics, hence it will fail, automatically. That's why it's been over 2 years since the farcical announcement. If anything does get built, it will just fail eventually and then fall upon the city to pick up like with nearly every other housing project. We might see Section 8 move in to cover the loss, too.

It was once said by one of the biggest entrepreneurs in the area "It's not if it works, it's if you can sell that it MIGHT work".

"We might see Section 8 move in to cover the loss, too"

If the numbers shown a few posts above are still part of the plan, I'd say it's a given.

Bad project. Kill it. The developer investment in the project is minimal. No risk. Boo!

Serious question, Jim: Once the tax credits are lined up, can they can simply be taken, without linkage to the completion of the project? Or even valid progress in the project?

I sure as hell hope not, should be a condition of the tax credit, and what it goes for.

I haven't ever received such a tax credit, but they appear to be a credit to be taken at tax filing time for a percentage of the "investment" in the project. Here's some information and a couple links:

New Market Tax Credit program, is a federal program that grants a tax credit for 39% of the total investment back over 7 years. The house of cards detailed above shows that credit to be 7.277 million, so ciphering backwards, the total investment at least according to this US Treasury pool of money is 7.227 / .39 = 18.531 million.

That figure is remarkably close to the totals of the loans + grants taken from the list I posted in October, 2011; $18.5M. Like I said, I suspect that each of the tax credit programs has its own criteria and counts different things as qualified investments.

http://cdfifund.gov/what_we_do/programs_id.asp?programID=5

The Federal Historic Tax Credit gives 20% of the investment back to the investor as a tax credit. Here it is listed as 5.381 million, so it must be based on an investment of 5.381 / .2, which = a calculated investment of $26.905 million. So the formula must count more items as being investment caliber than the new market credit listed above.

http://www.nps.gov/tps/tax-incentives.htm

I believe the tax credit is doled to the developer and can be applied to filings for the current year, even if they result in a refund for that period.

I just hit the recent link to the channel 13 story and see that the developer is waiting for approval on a 4M tax credit. That's a new number . . . I don't know where it came from ? ? ?

That link also mentioned that the developer had spent $2M cleaning asbestos out of the building. I'll wager dollars to doughnuts that it wasn't their money and came via a grant from Clean Ohio. I hope the deal dies. Because it's a shitty deal for Toledo.

I've been looking at this for an hour or so, am going to go have a bourbon. Cheers.

Jim, you're basically saying the credits can't just be applied. They have to follow their own spending, then they are taken as a percentage of that spending. That pretty much means the developer has to actually spend all that money in the first place. Hence I'm beginning to doubt the plan even more.

GZ, I'd say that's right. When we've looked at the possibility of applying for credits in the past, there are pretty strict guidelines about reporting of financials, etc, and the review process that takes place of the money you've spent and work you've done before anything will be granted. I'd imagine it's the same thing for the various credits in this project.

GZ & Johio, look at the sources of the money they are to spend. It consists of a loan for 10 million and grants ! For spending this, they get huge tax credits. Non recourse loans are a thing of the past, so they need Toledo to sign on to be the patsy.

Will any of the grant money go into the project ? ? ? Who can tell? ? ?

Scrap it and throw total support behind a competent developer at the Berdan Building.

So again, let me get this straight:

1. Developer takes a bunch of other people's money and spends it.

2. Developer gets a bunch of tax credits he can apply to his own money.

3. Developer really has about 5 cents in on each dollar or something like that. $1.5 million.

4. Developer can really just walk way at the end 'if' the project fails (which it will), since spending $1.5 million for tens of millions of tax credits, is a no-loss situation.

Scrap it and throw total support behind a competent developer at the Berdan Building.

How about we stop giving public money to private developers? Back in ancient times, you spent your own money and kept your own profits. Wacky idea, I know.

I'd be okay with that if you agreed to stop spending public money to facilitate expansion of suburbs via freeways.

The money that goes towards either Fiberglas or Berdan is a drop in the bucket compared to the DOT dollars that created the dire situation in the first place.

I love hoe the argument of fiscal responsibility and private entrepreneurship tends to happen when it applies to things abandoned after the government paid for NINETY PERCENT of the freeway system.

This is another rip-off.

What Fiberglass Tower needs is a date with a crane and wrecking ball.

"after the government paid for NINETY PERCENT of the freeway system."

I always love this thinking. Please try to remember that "government" produces nothing, doesn't earn a nickel and doesn't pay for ANYTHING - we do - via confiscation of our hard earned $$ by said government.

BB said: I'd be okay with that if you agreed to stop spending public money to facilitate expansion of suburbs via freeways.

Yeah, we have public planning authority in place, so we should start ramping that down. I really agree.

I don't think it will make as much difference with White Flight, however. As long as people can move, they will move. If they have to clog existing arteries, they will. I've seen this in action. If we refuse to extend I-280, people will just clog up Navarre.

Way to miss the point chief.

quote=140170

There are mountains of evidence to the contrary.

http://en.wikipedia.org/wiki/Federal_Aid_Highway_Act_of_1956
according to wiki they paid for 90%

"The money for the Interstate Highway and Defense Highways was handled in a Highway Trust Fund that paid for 90 percent of highway construction costs with the states required to pay the remaining 10 percent. It was expected that the money would be generated through new taxes on fuel, automobiles, trucks, and tires. As a matter of practice, the Federal portion of the cost of the Interstate Highway System has been paid for by taxes on gasoline and diesel fuel"

From what I can gather the only departments that EARN a profit in the government is the TVA which sells electricity,The US mint which sells coinage at face value, not sure how it made a profit though, The Bureau of Land Management which sells leases to government controlled land for oil and gas drilling, The FCC which sells rights to radio frequencies, The IRS which collect penalties from tax payers, The NRC which covers 90% of its costs from user fees.
http://www.straightdope.com/columns/read/2871/is-nasa-the-only-federal-agency-that-makes-a-profit