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Toledo Mayor Mike Bell on Friday said that Chinese investors have withdrawn their offer to buy the Marina District, a reversal that the mayor blamed on Toledo City Council and which he said raised questions about Toledoans’ understanding of the global marketplace.
The mayor said he still hopes to work out a sale deal and save the promised $200 million commercial and residential development, but he said the investors are “reassessing” whether they want to go forward with the deal to purchase a 69-acre portion of the Marina District in East Toledo for $3.8 million.
“In layman terms, what that means is that we don’t have a deal now,” Mr. Bell said at a news conference on Friday. “In order for us to move forward as a city, we have to realize that we are competing globally.”
He blamed the most recent decision on restrictions Toledo City Council wanted to impose on the sale during a contentious hearing Tuesday.
The mayor said Dashing Pacific Group Ltd. hasn’t said definitively that it won’t continue to invest. Dashing Pacific’s local representative, Scott Prephan of Prephan Enterprises of Perrysburg, did not return calls seeking comment.
The administration announced April 8 it had a deal with the China-based firm to sell it the vacant Marina District property, with a “conditional repurchase option” five years after the sale if the property has not yet been developed.
The two investors who offered to buy the land, Wu Kin Hung and Yuan Xiaohona, met Mr. Bell during his trip to China last year and since have visited Toledo more than once to negotiate the purchase of the Docks restaurant complex, which has been completed, and the Marina District.
Asked what caused the investors to reassess, Mr. Bell said, “just the conversations this week of the things that would have to be put in the deed for them to be able to buy the property.”
Some members of council are backing a deed restriction to require that union contractors do the construction work and a requirement that the city be able to buy back the property for $2 million if it remains substantially undeveloped after two years.
Quoting unnamed local businesspeople, the mayor said people have told him, “If I had those same stipulations put on me, I would walk away from the deal in a heartbeat.”
The mayor noted that the investors’ withdrawal occurred after the council meeting on Tuesday in which the mayor faced skeptical questions from several council members.
“If we are running pretty smooth until this week and all of a sudden the train has gone off the tracks, obviously something happened in the last few days to change that,” Mr. Bell said.
“Obviously there’s enough turbulence in the water to make them reconsider what they thought was going to be a pretty simple acquisition.”
The mayor acknowledged he could veto an objectionable deed restriction but said the divided council might lead the Chinese to question whether they have community support.
“Then we don’t have the total support of the people we need. “They’ll just be on the back side banging on this issue all the way to the end, so who would want to go through that?” he said.
Some council members disagreed with the mayor’s comment that Toledoans don’t understand global competition.
“Just because people don’t agree with you doesn’t mean they don’t understand,” Phil Copeland said.
Mr. Copeland said he is pro-business — and pro-citizens of Toledo — and that he makes decisions based on “what affects the citizens of Toledo.”
Adam Martinez said, “I don’t think Toledoans have any issue with the global marketplace and competing. The mayor is certainly very focused on economic development and moving at the speed of business. I think a lot of times he gets caught up in that.”
But the mayor may not understand that council members have the responsibility to make sure “we’re protecting our tax base and citizens,” Mr. Martinez said.
Rob Ludeman doesn’t believe Toledoans have a lack of understanding of the global marketplace. “I would say several council members [do],” Mr. Ludeman said. “I have had very positive feedback from Toleodans about this project. Apparently a couple council people don’t get it.”
Mr. Ludeman feels the mayor’s frustration and agrees with his position.
“I think there were improper demands made by certain council members that were insulting,” Mr. Ludeman said. “I’ve traveled internationally representing the city of Toledo, and I understand that there is a certain decorum you need to have in dealing with international investors.
“I’m hearing questions from people who have never worked in the private sector, and they don’t understand what business is about.”
Tom Waniewski said he believes Toledoans understand the global marketplace.
“I try to be wary of the vocal minority,” said. “I don’t mind a little scrutiny, but I think [council] came off a little too strongly.”
Councilman Joe McNamara placed the blame for the setback on the Bell administration, which he said failed to introduce the investors to council and did not prepare them for the public scrutiny the deal would face.
“The mayor had a relationship with the investors, but council did not,” he said. “There is clearly a cultural difference in how business is conducted in China and the United States and I think the Bell administration did a poor job of communicating that.”
Lindsay Webb said that she believed her questions about the proposed offer were reasonable and appropriate — and she does not believe this is the end.
“This is still on the table, in my opinion,” she said.
“I think this is an attempt to scare the public and members of council out of asking the questions that must necessarily be asked.”
She said the mayor “can provide significant leadership on this issue” by bringing the investors to council and allowing the tough questions.
Mr. Bell said the Chinese investors are not anti-union and said they are using a union contractor, Rudolph/Libbe Inc. of Walbridge, in work on The Docks.
D. Michael Collins, one of the Toledo councilman raising concerns about the speedy pace of the sale of a city asset that has been in search of a developer for years, said the investors may have other reasons, including financial turbulence in their home country.
“If the mayor is of the opinion that legislative members of council doing due diligence is unacceptable, then the mayor needs to reassess the way our city is run and the way our government functions in a republic,” Mr. Collins said.
“We would be remiss, if not irresponsible, if we didn’t ask the questions we’ve asked.”
Mr. Collins denied that the Chinese investors are being asked to accept conditions that haven’t been asked of others.
“That’s absolutely untrue. Everyone else has come forward and explained what their vision was. That’s something that hasn’t happened in this situation,” Mr. Collins said.
Councilman Mike Craig, whose district includes the area to be sold, said cultural differences are getting in the way of a business deal.
“They need to understand, in the United States, in a development this big, you have lots and lots of partners,” Mr. Craig said.
He said he opposed putting a restriction in the deed transfer requiring the use of union labor, as area construction unions are seeking, but said the Chinese investors should meet with the Northwestern Ohio Building and Construction Trades Council and negotiate.
“I’m not going to give up on this deal. I’m sure the administration isn’t,” Mr. Craig said.
Councilman George Sarantou called for the Chinese investors’ representative, Mr. Prephan, to meet with the trades union representatives so they can show their involvement in other big projects, such as the Huntington Center arena.
“Rudolph/Libbe, Lathrop [Co. of Maumee] — they’re all union contractors. That’s typically who’s going to be involved in this project because of the size of it,” Mr. Sarantou said, referring to two large area construction management firms. “I think we can solve this problem.”
Ron Rothenbuhler, regional director of the Ohio and Vicinity Regional Council of Carpenters, as well as chairman of the Lucas County Democratic Party, said earlier this week that he had attempted, but failed, to arrange a meeting with Mr. Prephan.
The mayor bristled at the objections raised by City Council on Tuesday and said he was surprised at some of the opposition in the community, given Toledo’s current economic slump.
He said he went to China last September with an expectation that Toledoans would embrace the development opportunities that might result from that trip.
“I thought that there would be excitement and willingness to be extremely competitive in our ability to move our city forward. But I guess I was wrong on that,” Mr. Bell said.
“This is a competitive world we’re in and when it’s your money, you can put it anywhere you want. If they choose to go to another city, I guess that’ll be our loss,” Mr. Bell said.
The Marina District, a former collection of industrial parcels, has been assembled under city ownership and cleaned up for commercial and residential development over the last dozen years with $43 million in public funds.
Some councilmen expressed frustration over not knowing enough about the two Chinese investors behind Dashing Pacific Group, and Councilman Steven Steel Tuesday asked for the third time since Feb. 8 to see their resumés and portfolios. Others questioned whether the city was getting the best deal.
Blade staff writer Mark Zaborney contributed to this report.
Contract Tom Troy at: firstname.lastname@example.org or 419-724-6058.