With just two days left to apply for a grant, controversy surrounding the redevelopment of the vacant Fiberglas Tower downtown—a $44 million project by the Eyde Co.— brought Toledo City Council to a standstill Tuesday.
Upset with the administration’s decision to reapply for a $2 million Brownfield Economic Development Initiative grant without consulting the board, Councilmen Joe McNamara and Adam Martinez brought an ordinance before council Tuesday that would continue to allow the city to apply for the grant, but would not allow future grant applications without council approval.
After much debate, council voted 8-3 to table the ordinance. Council members’ main concern was that the administration was keeping them in the dark, which could affect future decision-making and force emergency legislation. Mr. McNamara, Mr. Martinez and Councilman Phillip Copeland voted against tabling the action.
“It seems as if a year ago in June we were at this very same crossroads of a dilemma,” said councilman D. Michael Collins. “If we did not move in haste the deal was going to blow up.”
Council members say they found out last week that the city was applying for the grant again this year, after its application was denied last year. The decision still allows the city to apply for the grant, but if it is approved, council will have to approve funding use.
Several councilmen cited poor communication between council and the mayor’s administration and among council members, as well as insufficient time to review the legislation, as reasons to table the ordinance.
“I have to say that when I hear this administration assure us that they will inform us of something I have to chuckle a little bit, since we weren’t informed of any of this” said Councilman Steven Steel. “We kind of had to find it out at the last second.”
Council approved the city’s application for the same grant last year, but with the understanding that there would be only one round of BEDI funding.
Mayor Mike Bell,who attended the meeting, said that because the city did not exhaust the process of using the BEDI grant, there was no reason to inform council that the first application had been denied or that it was reapplying this year.
The city is applying for a $10 million Department of Housing and Urban Development loan to help finance the tower renovation. The BEDI grant would help pay off a significant chunk of the loan.
Changes in the project’s estimated financial situation from 2010 include drops in tax credits from $7.3 million in new market tax credits to $4.2 million; and an estimated $5 million decrease in state and federal historic tax credits. Mr. McNamara added that since last year, a $1 million grant for energy efficiency has also been denied, and the building has yet to be designated an historic structure.
“I would think that the significant shift ... [in funding] is a significant change that I would think have been communicated to the council in some way, and it seems that it has not been,” Mr. Steel said to the mayor.
He added that the lack of communication in the past on this project did not give him confidence that the council would be kept in the loop in the future.
Mr. McNamara and Mr. Martinez said the council has yet to evaluate how these changes will affect the city’s risk.
The fate of the BEDI grant will be known in September, and loan agreement will be worked out afterward, as the investors’ confidence depends partly on the city’s ability to secure the grant.
The Eyde Co. plans to renovate the vacant building into a mix of apartments, a hotel, and a restaurant.
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