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Business Development News Politics Transportation

December 2, 2013: The Day Chaos Ruled City Hall

In what Nathaniel Livingston described as the most bizarre day at City Hall since now Mayor John Cranley (D) chaired over the Law & Public Safety Committee meeting shortly before the 2001 Race Riots broke out, City Council approved a confusing collection of 11 ordinances that will go for a final vote on Wednesday.

The confusion was due to a number of reasons. First, Mayor Cranley presided over the committee hearing, which does not normally take place as it is not the mayor’s role. Cranley then encouraged the committee to move forward with its proceedings before adopting any rules to govern the committee. Finally, Cranley then introduced 11 separate ordinances that had not been provided to the public or to the members of the committee, and instructed votes on each of them anyway.

Each of the 11 ordinances is slightly different, but each includes appropriations so that they cannot be challenged by referendum under state law. This goes against a campaign promise of Cranley and all incoming members of city council who stated over and over again that they respect the citizen’s right to referendum.

In the past, John Cranley, Amy Murray, Christopher Smitherman and Charlie Winburn have all talked about a “sacred” right to referendum, but appear to be opposed to one in this instance.

Each of the 11 ordinances squeaked by with a 5-4 majority – including Councilman Christopher Smitherman (I), who is currently being accused of having a conflict of interest that should prevent him from either voting or engaging in official discussion on the project. Here is what each of the ordinances would do, if passed on Wednesday:

  1. Item #201301490: SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to construction and implementation of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation of the Cincinnati Streetcar System; and further REPEALING Ordinance No. 392-2013.
  2. Item #201301491: SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its reimbursement agreement with Cincinnati Bell Telephone Company, LLC, related to construction of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain a financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
  3. Item #201301492: SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its reimbursement agreement with Time Warner Cable Midwest, LLC, related to construction of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
  4. Item #201301493: SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its reimbursement agreement with Level 3 Communications, LLC, related to construction of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
  5. Item #201301494: SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its contract with CAF USA, Inc. related to design and fabrication of streetcars for the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
  6. Item #201301495: SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its contract with LTK Consulting Services, Inc. related to construction of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
  7. Item #201301496: SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its contract with Messer/Prus/Delta Railroad JV related to construction of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
  8. Item #201301497: SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its contract with Parson Brinkerhoff, Inc. related to construction of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
  9. Item #201301498: AUTHORIZING the City Manager to take all steps necessary and proper to suspend construction and implementation of the Cincinnati Streetcar System in the most cost-effective and efficient manner possible, in the best interests of the public peace, health, safety and general welfare of the City of Cincinnati.
  10. Item #201301499: AUTHORIZING the City Manager to take all steps necessary and proper to negotiate the suspension of the Intergovernmental Agreement Between the Southwest Ohio Regional Transit Authority and the City of Cincinnati related to the Cincinnati Streetcar System in the most cost-effective and efficient manner possible, in the best interests of the public, peace, health, safety and general welfare of the City of Cincinnati.
  11. Item #201301500: AUTHORIZING the City Manager to take all steps necessary and proper to negotiate the suspension of the Cooperation Agreement for Relocation of Utilities between Duke Energy Ohio, Inc. and the City of Cincinnati in the most cost-effective and efficient manner possible, in the best interests of the public peace, health, safety and general welfare of the City of Cincinnati.

For reference, Ordinance No. 392-2013 repealed in the first item listed above is the ordinance that was passed by City Council last week requiring phase one of the project to be finished. The final kicker was a motion filed by Councilmembers Mann, Winburn, Smitherman, Flynn and Murray that stated:

Item #201301501: WE move that the City Manager immediately suspend all work related to the streetcar as permitted under existing contracts, and immediately begin an analysis of the costs of continuation versus cancellation.

This all took place a day after CAF, the firm manufacturing Cincinnati’s streetcar vehicles, stated that they have incurred great expenses for this project and intend to pursue full compensation for their work from the city.

Prus Construction has now also indicated that they will be greatly impacted by a decision to cancel the project and appear poised to file major lawsuits against the city.

In Wisconsin, Talgo just recently filed a second lawsuit for $65.9 million against the State of Wisconsin after it canceled its inter-city rail project. In addition to that, Talgo has already been awarded $40 million as a result of the state backing out of its contract. The total contract amount, meanwhile, was only worth $47.5 million.

At the same time as all of this unfolded, the Federal Transit Administration (FTA) announced that they were freezing their $45 million investment, which they had signaled they would do and would move promptly to recoup all of their funds should Cincinnati move to pause or cancel the project, and were prepared to begin debt collection immediately on any money already spent. This news came with great concern for Councilmember P.G. Sittenfeld (D) who fears that the action from FTA may have negative impacts for the region’s bus system.

“I’m concerned about a path toward damaging the most basic of transportation needs,” Sittenfeld told the Business Courier on Monday. “I think this could eventually lead to harming bus service.”

What was also announced today during all the commotion was that the Haile Foundation offered to pay 100% of the costs for any study needed to study the finances of the project so that it could move forward. Had the new council accepted that offer, there would have been no need to appropriate funds with each of the 11 ordinances, thus eliminating the possibility of a citizen referendum.

The Haile U.S. Bank Foundation went on to say that canceling the project would cause the philanthropic organization “pause” and would force them to “reconsider whether the city can be a trusted partner.” The letter further stated that such reconsideration would affect their planned investments at Smale Riverfront Park, Music Hall, Findlay Market and other redevelopment projects.

Going against this offer to fund a financial study were Vice Mayor David Mann (D) and Councilmember Kevin Flynn (C) – both of whom campaigned on the promise to carefully consider the facts and figures associated with cancelling the project before making a decision. Insiders believe both will hold their line despite the flood of evidence suggesting a cancellation of the project would be a financial disaster for the City.

If one or the other were to switch their vote in light of this information on Wednesday, then the streetcar project would have a 5-4 majority on City Council and the matter would be settled. If they hold their line, it appears that a slew of lawsuits, potential referendums, injunctions and a potential recall election could all transpire over the course of 2014. Happy New Year!

The day ended after a nearly eight-hour council session that left many more confused than when they arrived. The standing room only crowd – where 68 of the 71 members of the public who spoke were in favor of the project – left dejected and feeling a bit hopeless facing a defiant mayor utilizing every trick to block any chance of a citizen referendum.

The thought is that should the project go to a referendum for a third time that it would win with voters for a third time. The prospects of huge and lengthy lawsuits, the loss of a $45 million federal investment, the destruction of the relationship with the federal government and private investors, and the fact that it is estimated it may only cost $400,000 more to just finish the project would not sit well with voters.

Already, Sittenfeld and The Enquirer have switched their stance on the matter and have encouraged the mayor and city council to finish the project.

The question now is whether the facts and figures presented to date will be enough to sway either David Mann [david.mann@cincinnati-oh.gov] or Kevin Flynn [kevin.flynn@cincinnati-oh.gov], or will the Cranley Administration have the courage to allow a direct referendum on the matter?

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Business Development News Politics Transportation

Hundreds of Streetcar Supporters Rally in Over-the-Rhine as New Mayor, Council Are Sworn In

There has never been a single anti-streetcar event that has gathered more than 20 people, but earlier today it was estimated that close to 1,000 Cincinnati Streetcar proponents gathered with green balloons at Washington Park to show their support.

Event organizers from Cincinnatians for Progress and We Believe in Cincinnati lined up the hundreds of supports for blocks – stretching from in front of Music Hall on Elm Street to north of Findlay Market, where streetcar tracks are currently being installed.

The event also came on the same day that the new mayor and city council were sworn into their offices, marking the first time an organized protest of hundreds took place on the first day for newly elected leadership. With a defiant Mayor John Cranley (D) and five of the nine members of City Council poised to pass a bizarre collection of ordinances in order to bypass any further public protest of their actions, it appears that legal fights are about to begin.

Also earlier today, Mayor Cranley and Councilmember Chris Smitherman (I) outlined exactly how they intend to make it all work to their favor. At the same time, reports surfaced of a potential conflict of interest for Smitherman due to his brother’s involvement with the $133 million streetcar project through Jostin Construction.

A majority of city council and the mayor himself have stated that they support the right to referendum, but their proposed legislative action would run counter to that. Whether or not they will allow Cincinnatians to vote on the streetcar directly for a third time, or be forced by the courts to do so, is yet to be seen.

The next big event will take place on Monday, December 2 at 4pm inside City Hall. City Council will hold a special hearing on the streetcar project at that time, and it is expected to be heavily attended by both supporters and opponents. Those who would like to attend are encouraged to arrive early. Those unable to attend that would still like to get involved can do so by donating to the Alliance for Regional Transit and by signing up to volunteer.

“Does it make any sense to lose our reputation with the federal government simply because we want to prove a political point,” Rob Richardson asked the boisterous crowd. “I’ll tell you what does make sense…it makes sense that we have to fight for a comprehensive transportation system so we can compete with cities all across this country and all across the world. That is the goal.”

“We measure greatest not by what we cut, but by what we accomplish.”

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Business Development News Politics Transportation

Project Executive Estimates Cost to Cancel Streetcar Would Far Exceed $100M

The project executive for the Cincinnati Streetcar project, John Deatrick, gave a presentation to Cincinnati City Council’s Budget & Finance Committee today to outline the anticipated costs, time frame risks associated with cancelling or temporarily stopping work on the $133 million project.

Deatrick emphasized that at this point approximately $32 million has or will be spent prior to December 1. In addition to that, he explained exactly why the city would forfeit approximately $45 million in Federal funds, and be subject to local payment of any funds committed that would have otherwise been paid by those Federal funds. In addition to that, Deatrick and the project team estimate that it would cost $31-48 million to close-out the project.

Streetcar Cancellation and Close-Out Costs


What it means is that the professionals involved with overseeing the project believe the costs to cancel will be between $108 million and $125 million, not including any of the highly anticipated litigation costs.

The presentation also included a breakdown of more intangible numbers like the damage to the reputation the city has with the Federal government, and the future inability to receive Federal funding for any transportation projects as a result.

Cincinnati’s Budget Director, Lea Erickson, then explained how those costs would be paid and that the cancellation of the project would also result in the loss of any realized property and economic gains anticipated due to the streetcar, as outlined by an economic feasibility report done by HDR Economics. That total of lost tax revenue for the City of Cincinnati and Cincinnati Public Schools, she estimates, would $237 million in today’s dollars – or $594 million over the course of the next 35 years.

The 39-page presentation is packed with detailed breakouts and explanations for these figures. It also explains the relationship of the various contractors involved in the project.

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News Opinion Politics

GUEST EDITORIAL: Get Over It, Then Get Ready

Don MooneyStreetcar supporters. Vine Street Taco- Noshers. Urbanistas. Roxanne and Quinlivan dead-enders. I feel your pain. We just had our butts kicked in city elections where only 29% of the electorate bothered to show up.

If you own property or a business in OTR you may be calling a realtor. Maybe you’re checking to see if it’s too late to cancel the granite countertops for that flashy new Main Street kitchen. Or just banging your head against the wall while trolling through Kayak.com for a one-way ticket to Portland.

Before you bail out, listen to a grizzled, cynical political warrior who has been on the losing side of plenty of elections, and won a few too, over 40 years on these mildly mean streets.

First, the election is over. Your team lost. Did you vote last year for 4 year terms? Oops. Get over it. Licking wounds for more than 48 hours is unsanitary.

Give some grudging credit to John Cranley and his handlers. He put together an unlikely coalition: Tea Partiers who just hate the messy melting pots of cities; (some) African American voters led to resent the idea of white urban professionals insisting on rides cushier than smelly Metro buses; and more than a few west siders convinced that “gentrification” in your neighborhood means more “undesirables” in theirs. (See Pete Witte’s twitter feed if you think I’m making that up.)

Mr. Cranley is hardly the first candidate to win an election by whipping up resentment in the “neighborhoods” about spending on development “downtown”. He won’t be the last. Many politicians have built entire political careers in this town on being against stuff.

The mayor-elect could care less if you call him “Can’t Do Cranley”. At 39, he sees this as a launching pad to greener pastures, even if he leaves shoe prints on your backs to prove he keeps his promises.

Advocates of the streetcar – and I’ve been one of them – have allowed their pet project to be painted by COAST and Chris Smitherman as a wasteful contraption designed for Chablis sipping metrosexuals, who think they are too good for the bus or the family mini-van. Can’t these precious young professionals read their iPads on the number 24, or get stuck behind a truck on the viaduct like the rest of us? Don’t take it personally. It’s just politics.

We have not sold the incredible progress downtown and in OTR, despite the great recession, as a model for other neighborhoods with their own aspirations for cool restaurants, modern transportation and rising property values. So in Price Hill and Mt. Washington, your rising neighborhood is seen as a threat to theirs, not as a sign of good things to come to our city.

Those of you with skills and no kids to tie you down can’t be blamed for bailing out now. With Cranley in the Mayor’s office and a hostile Council majority, the streetcar is on life support, and the air soon may start coming out of the downtown/OTR balloon. No doubt there are bright folks at 3CDC, dunnhumby and all those hip new branding firms with OTR addresses already tuning up their resumes.

We are now in an age when public investment will comes in the form of hiring the 200 more cops Mr. Cranley has promised, to protect us from ourselves.

But if you choose to stick around and fight another day, think a little more strategically:

Get to know the neighborhoods and convince them that what is good for the central city is not a threat to Westwood or Oakley. There is life on the other side of I-75 and Mt. Adams. Explore. Collaborate. Cross-Pollinate a little. Try the burgers at Zips and Camp Washington Chili.

Create a vision for a modern transportation system that does not begin and end in downtown and OTR; then sell it. Gas prices aren’t going down. Work with the Uptown institutions to develop a funding model that does not rely on council to come up with more cash. Develop a long-term vision that includes connections to Price Hill, Northside, Avondale and Walnut Hills.

Dig in for a long, hard but constructive fight with the new mayor and right-leaning majority on City Council. Give some credit to COAST and Smitherman for their relentless opposition to the outgoing regime. Now they hold sway with a mayor and council that owe them big time.

Progressives may need their own version of COAST to litigate, referendize and challenge the mayor and council. Look for wiffs of scandal and corruption to expose. And remind the city of their promises: restore 200 cops, fix the pension system, neighborhood development and no new taxes. No problem.

Recruit and bolster the next generation of city leadership. Low turnout says more about the candidates than the voters. Don’t expect voters to show up when the candidates don’t persuade them they have something at stake.

The absence of an African American candidate in the mayor’s election explains a lot about turnout in 2013. For eight years you were fortunate to have an African American mayor who “got” your aspirations. Find the next one: Yvette Simpson? Eric Kearney? Rob Richardson? Work with them or others and prepare them for 2017. You can’t beat somebody with nobody.

Remember that politics is cyclical. The faction that will take over at City Hall come December are political heirs to the crew that ran the city from 1997-2005; and before that in the 1980’s. They had their ups and their downs. But no cycle lasts forever. Be ready and rested when the next wind of change blows.

Don Mooney is a local attorney and longtime Cincinnati political activist. He served for more than 20 years on the Cincinnati Planning Commission and is a former Treasurer of Cincinnatians for Progress. If you would like to submit a guest editorial to UrbanCincy you can do so by contacting our editorial team at editors@urbancincy.com.

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The UrbanCincy Podcast

Episode #27: Election 2013 Wrap-Up

Cincinnati-Parking-MeterOn the 27th episode of The UrbanCincy Podcast, we’re joined by former city council candidate Mike Moroski to discuss the outcome of the November 5th election. We also speculate on why voter turnout was so low and which issues motivated voters to actually show up at the polls.