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Press Release

Seal of the County Commissioners

Cuyahoga County Board of Commissioners
112 Hamilton Court
Cleveland, OH 44114

For more general information contact:
Tom Ford 216.698.6559

Medical Mart Letter of Intent

Download a pdf of this release.

From: Office of the Mayor

Andrea V. Taylor, Press Secretary
Office of the Mayor
(216) 664-4171 or (216) 857-7998

Belinda I. Saldaña, Deputy Press Secretary
(216) 664-2223 or (216) 857-3808

James McCafferty, County Administrator
(216) 443-7215

May 4, 2009

Medical Mart & Convention Center Agreement Reached

Letter of Intent Details

CLEVELAND - Today, Mayor Frank G. Jackson and Cuyahoga County Commissioners Tim Hagan, Jimmy Dimora and Peter Lawson Jones announced that they have reached an agreement on the Medical Mart and Convention Center. This is one of the City’s and County’s largest public/private investment projects and will build upon, enhance and broaden the region’s healthcare industry.

"Although there are no panaceas, this project has the potential to create opportunities for new business and new jobs and can provide the public with tangible benefits from its investment," said Mayor Frank G. Jackson. "This is our version of a stimulus package."

“We are pleased that we have reached an agreement that we think represents the best interests of both the City and County” said Commissioner Tim Hagan, president of the Board of Commissioners. “Now we can move ahead with this important project that we hope will help revitalize the County and its core city.”

The Letter of Intent (LOI) signed today is subject to approval from Cleveland City Council and has to be ratified by the County Commissioners at their regular public meeting Thursday May 7.

“This purchase is not only one more step toward establishing the Medical Mart and Convention Center as an economic driver and a show piece for the entire region, but also a step toward helping all the residents of the County as they struggle to deal with the economic challenges we all face,” commented Commissioner Jimmy Dimora.

Commissioner Pater Lawson Jones had this to say, "Now that our primary partnerships -- that with MMPI and that with the City of Cleveland -- have been solidified, it's full speed ahead. The Medical Mart/Convention Center Complex is now well on its way to becoming a reality and a major force in the revitalization of our regional economy."

The details of the LOI are as follows:

Public/Private Interests

The County acknowledges that the City has expressed the importance of balancing the interests of MMPI and its affiliates as a private developer/operator against the interests of the public and its institutions. Part of the public interest includes marketing the Convention Center facility to attract events that would promote economic development and deliver benefit to private businesses in the City, County and region but may not necessarily be profitable for the operator of the facility. When event scheduling conflicts develop and cannot be resolved by holding the events simultaneously or seeking alternative dates, the County and the City expect that MMPI or its affiliates would consult with Positively Cleveland and seek its views as to which proposed event would deliver the most benefit to the community.

The City acknowledges that the County intends to negotiate with MMPI to establish operating benchmarks with penalty provisions that would apply if the benchmarks are not met. Factors the County will consider in developing the benchmarks may include, without limitation, hotel room nights generated by the Convention Center, Convention Center attendees from outside the 7-county region, and Convention Center occupancy rates. The County will consult with the City and will consider, in good faith, recommendations offered by the City in developing the benchmarks, with the goal of encouraging the Convention Center operator to market the facility and book events that will deliver significant economic impact annually.

Special Hiring Programs

The County will require MMPI to require its general contractor to utilize good faith efforts to meet a 25% goal of County-certified small business enterprise participation in the design and construction of the Medical Mart and Convention Center.

The County will monitor this SBE program with the expectation of the project hiring resulting in a Convention Center/Medical Mart construction workforce made up of 40% Cuyahoga County residents, half of which (20% of the workforce) will be expected to be residents of the City of Cleveland. The County will also require MMPI to require its general contractor to utilize good faith efforts to meet these goals.

The County will also require MMPI to cooperate with the County and the City to develop training programs in conjunction with the Cleveland Municipal School District and other appropriate educational and training institutions for construction and operational workforce training and employment for the Convention Center and Medical Mart. The County and City agree that it will be a condition of closing under the Definitive Agreement that enforceable agreements between the County and MMPI regarding these hiring and training programs will have been executed.

In addition, the County and City will consider, and consult with each other regarding, whether the residential hiring portion of the SBE program may be expanded to cover the operational workforce at the Convention Center complex.

Malls B and C

County and the City will enter into an agreement that will grant the City a permanent easement over Malls B and C for the use of Malls B and C as a public park.

Purchase Price

In consideration of the purchase of the Property, reimbursement to the City for expenses and lost revenue, and to facilitate development of the Convention Center complex, the County will pay the City a Purchase Price of $20,000,000 to be paid as follows: 50% at the closing and transfer of the Property; and 50% when the County issues its bonds for the project.

Perk Park

The County urges the City to apply $2,500,000 of the Purchase Price to the restoration of Perk Park in downtown Cleveland. However, the County does not intend to impose any use restrictions on funds paid to the City under the Definitive Agreement.

Reversion of Public Auditorium

The City would convey title to the Public Auditorium entitling the City, at its option, to re-enter and take possession of the Public Auditorium in 2067 (or earlier under certain stated conditions).

Bed Tax

The County acknowledges that the City’s bed tax, collected pursuant to Ohio Revised Code Section 5739.09, is currently directed under the City’s Code (Codified Ordinance Section 193.03) to the Convention Center and that in any authorizing legislation passed to approve the transactions contemplated by this LOI, the City intends to continue its bed tax and redirect its proceeds for any lawful purpose, such that the proceeds would no longer be directed to the Convention Center or its operations.

Property Tax Abatement

The City agrees to support the County as it seeks tax abatement for the entire Convention Center complex before any public body or regulatory authority, including the General Assembly of the State of Ohio.

Naming Rights

In the event that the County elects to sell the naming rights to the Convention Center, the County and City shall share equally in the proceeds.

Convention Center Employees

The County agrees to hire, or to require the Developer or Operator (as each term is defined in the Development Agreement) to hire, in an agreement to be entered into, at least 10 of the City’s full-time Convention Center employees.