MIDDLETOWN CITY COUNCIL AGENDA

TUESDAY, March 1, 2016

BUSINESS MEETING – 5:30 pm – COUNCIL CHAMBERS – LOWER LEVEL

1. MOMENT OF MEDITATION/PLEDGE OF ALLEGIANCE TO THE FLAG

2. ROLL CALL

3. CITIZEN COMMENTS, GUESTS, ORGANIZATIONS’ REPORTS

4. CITY MANAGER REPORTS

5. CONSENT AGENDA. . . Matters listed under the Consent Agenda are considered to be routine and will be enacted by one motion and one vote of consent. There will be no separate discussion of these items. If discussion is desired, that item will be removed and considered separately.

(a) Approve City Council Minutes: February 16, 2016

(b) Confirm Promotional Appointments: Brent Hughes & John Fadden - Fire Apparatus Operator, Department of Public Safety, Division of Fire

(c) Receive and File Oaths of Office: Stephen Busam, Adam Cox, Jennifer Ekey, Jeffrey Green, Ryan Saettel

(d) To approve the purchase of 80 pieces of body armor and related accessories for the Division of Police from Vance Outdoors, of Columbus, Ohio, in the amount of $55,680, off the State of Ohio Cooperative Purchasing Program.

(e) To authorize the purchase approximately 800 water meters from Badger Meter, Inc. of Milwaukee, WI, in the amount of $67.50 each.

(f) To approve a contract with various vendors for the purchase of supplies for the Water Maintenance Division. Est. Annual Cost Section 1 – Brass Ferguson Waterworks – Hamilton, OH $14,908.85 Section 2 – Repair Clamps Ferguson Waterworks – Hamilton, OH $14,670.00 Section 3 – Valve Boxes, Sleeves EJP, Inc. – West Carrollton, OH $23,458.48 Section 4 – Gate Valves Fortiline – Cincinnati, OH $ 6,684.82 Section 5 – Sewer Rings and Lids Fortiline – Cincinnati, OH $ 8,700.80 Section 6 – Miscellaneous Fortiline – Cincinnati, OH $ 2,501.28

COUNCIL COMMENTS LEGISLATION

1. Ordinance No. O2016-04, an ordinance establishing a procedure for and authorizing a contract for the transfer of City owned property located at 1316 Vail Street to Liberty Spirits, LLC for redevelopment, and declaring an emergency.

2. Ordinance No. O2016-05, an ordinance authorizing a contract with Buick GMC of Beachwood for the purchase of a GMC Sierra 15 Automobile. (2nd Reading)

3. Resolution No. R2016-06, a resolution authorizing an agreement granting tax abatement to Liberty Spirits, LLC for redevelopment of 1357 Central Avenue in the Downtown Middletown Community Reinvestment Area. (1st Reading)

Middielover

I don’t know why you can’t understand that taxpayers DO NOT want City Hall to give away their tax dollars to start up businesses of their friends in the downtown area.
We have been told for several years now that MMF was going to ask for investment money from local movers and shakers to help fund these new businesses. What happened to that great plan?
If MMF doesn’t think these are great solid business investment then why should taxpayer’s dollars be used for startup investments?
If you want to open a business in the DOWNTOWN DREAM...gamble with own money.

Posted: 11:59 a.m. Wednesday, March 2, 2016

Middletown Council approves $1 sale to distillery, but with hesitation

By Mike Rutledge

 MIDDLETOWN — 

All five members of Middletown City Council voted Tuesday to approve the $1 sale of a building at 1316 Vail Ave. and two adjacent vacant properties to startup micro-distillery Liberty Spirits LLC, but not before significant discussion about whether terms negotiated by the city administration were too generous.

Council Members Dora Bronston, Talbott Moon and Steve Bohannon expressed concerns about the terms of the sale and a proposed 100 percent tax abatement over 10 years for the project. Mayor Larry Mulligan Jr. suggested the possibility of tabling legislation approving the $1 sale for two weeks until the March 15 meeting, which company owner Mike Robinette plans to attend to discuss legislation approving the tax abatement. Robinette was out of town during Tuesday’s meeting, officials said.

City Manager Doug Adkins told council the lack of tax abatement may jeopardize the project.

Council members indicated they have heard criticisms from citizens questioning generosity of the deals.

Ultimately, at the suggestion of Mulligan, council members voted for the sale, with the understanding they will speak with Robinette, a former city employee, during the March 15 meeting.

The Journal-News will update this story later today.

Posted: 11:59 a.m. Wednesday, March 2, 2016

Middletown council debates micro-distillery subsidies

By Mike Rutledge

MIDDLETOWN
Five members of Middletown City Council voted Tuesday to approve the $1 sale of a dilapidated building at 1316 Vail Ave. and two adjacent vacant properties to startup micro-distillery Liberty Spirits LLC.

But they had significant discussion before that about whether terms negotiated by the city administration were too generous, and whether the project will become reality.

Council members Dora Bronston, Talbott Moon and Steve Bohannon expressed concerns about the terms of the sale and a proposed 100 percent tax abatement over 10 years for the company.

Mayor Larry Mulligan Jr. suggested the possibility of tabling legislation approving the $1 sale for two weeks until the March 15 meeting, which company owner Mike Robinette plans to attend to discuss legislation approving the tax abatement. Robinette was out of town during Tuesday’s meeting, City Manager Doug Adkins said.

In the weeks since the proposed sale was announced, officials have heard criticism from citizens about the wisdom of selling a building for $1 that Middletown bought with $90,000 of local money. Middletown also spent $215,000 in federal funds to buy and raze buildings on two adjacent vacant properties that are part of the $1 sale.

“Middletown’s reaching new heights of ridiculousness,” said city resident Robin Fordyce, 62, who criticizes the subsidies for a micro-distillery in the city’s downtown, which she argues already has enough bars.

“If this is a capitalistic society, then let them figure out a business model that does not include paying $1 for a building that was bought for $90,000, and then they need tax breaks,” added Fordyce, who said she planned to attend Tuesday’s council meeting but was sick. “And, of course, it’s a former city employee (who owns Liberty Spirits). This is so old.”

Moon during Tuesday’s meeting noted, “I think we’ve all received phone calls, or emails, or messages on this, and there is some level of concern out there in the public, and I certainly share some of their concern.”

“I’m a proponent of small business — I’m a small-business owner here in town — and I think there’s certainly instances where it’s wise and necessary to incentivize business to come to town,” Moon said. Either the $1 sale or the tax abatement seem appropriate, he added, but: “I do have some reservations about both giving the building away and doing a 100-percent abatement,” Moon said.

Bronston, who expressed surprise Adkins had agreed to a 100-percent abatement, was among those on council who want to hear directly from Robinette, Liberty Spirits’ owner, as well as a real-estate owner/broker and former city economic-development and planning employee.

“I had some questions that I wanted to ask directly to Mr. Robinette, and for him to present his plan,” Bronston said. “I would prefer personally that he would come and give us some kind of a presentation.”

Bohannon said he wanted assurances about Robinette’s ability to complete the project.

“We put money into that property, a lot of money — of citizens’ money — into that, and I’m just concerned about the citizens’ money that we’ve spent on this thing, on speculation from someone that has not proven to me that he can follow through on a project,” Bohannon said.

“Now, granted, everybody deserves a first chance to try something,” Bohannon added. “I just don’t want to see this coming back and biting us in the tail, that we end up getting this property back again, and then the citizens saying, ‘What is the city of Middletown doing giving away property?’ And it just snowballs into that.”

“I think that’s certainly a fair concern, Mr. Bohannon,” Mulligan said. “There’s no doubt that we need to proceed cautiously with that.” But it’s also important to be friendly to business, the mayor said.

Robinette in his application for the abatement, explained: “Liberty Spirits is a start-up business in an emerging industry which is highly competitive. In order for Liberty Spirits to succeed, controllable cost must be kept to a minimum.”

Adkins noted the Vail Avenue building has no plumbing, electric or heat/air-conditioning, plus a large hole in the roof. Yet, “Liberty Spirits is willing to take the Vail property for $1,” he said. He later added: “No one in the last six years has had any interest in even looking at that property.”

Under terms of the proposed tax abatement, Liberty Spirits will pay property taxes for the value of a nearby 4,000-square-foot building at 1357 Central Ave., as that value was set when the property was purchased, plus income taxes on the distillery operation’s estimated $80,000 payroll, Adkins said. The 10-year, 100 percent tax abatement would eliminate taxes on that building’s added value created by the renovation. The estimated savings from the tax cut are $650 per year, or $6,500 over the decade, he said. The company will still have to pay about $908 yearly in property taxes, based on its purchase value.

Asked by council, Adkins speculated rejection of the tax cut could kill the deal: “I would want to ask him for sure, but my understanding is no, if he’s not going to get the … abatement, I’m not sure he would stay in this property on Central. He may look at other options and other locations.”

Council Member Daniel Picard said he saw no need to hear from Robinette.

“For us to start to insert ourselves into the negotiating process is someplace we ought not be,” Picard said. “If we’re going to insert ourselves into negotiating those deals, No. 1, that’s not what we were elected to do, and No. 2, no one’s going to come here. They’re not going to want to negotiate with all five of us.”

If Middletown isn’t business-friendly, Adkins told council, companies may say, “Nevermind, we’ll go to Hamilton.”

Adkins said if Robinette is willing to invest, “even if he goes out of business, that building now is renovated, ready for use in the future.”

“It helps if you don’t sandbag him on council night,” Adkins said, asking that council members send him their questions in advance of the March 15 meeting so Robinette can be prepared.

Picard said he believes critics of the project are jealous, or don’t like Robinette.

“As I said in my email this morning to all of you, the people who don’t want this to happen are people who have a grudge or something to hold against Mr. Robinette, and so they don’t want him to be involved, or they’re jealous,” Picard said.

Picard said he spoke about 30 minutes with one man who didn’t like the proposed deals, “and that’s really all it was: He’s jealous of the fact that Mr. Robinette’s getting a great deal. Well, I tell you what, folks: Mr. Adkins is putting together a list of all the properties that this city has. If you’ve got a deal, you want to do something, step forward. Bring us your project. We’ll be glad to consider it. We’ll probably be willing to make you a deal where you get a building for a buck, too.”

·                                  

Can we have a little talk about the photo that was published in the Journal?

The caption states that this photo is the inside of the city owned 1316 Vail Ave. property. If the other city owned properties look like this it is no wonder that they are all still sitting empty.
Before you come after homeowners for rusty gutters I would strongly suggest that City Hall clean up it's own mess...make a list of all city owned property in THEIR DOWNTOWN area, take a picture of the inside, put a sign in the window, clean them up and get them ready for sale.
Shame on City Hall.

Middletown Journal
Updated: 12:34 a.m. Monday, April 5, 2010 | Posted: 12:33 a.m. Monday, April 5, 2010

Land swap issue noticeably absent from council agenda

Cabinet company still hoping for deal

By  http://www.journal-news.com/staff/ryan-gauthier/" rel="nofollow - Staff Writer

    MIDDLETOWN — A controversial land swap that would have seen the city pay $95,000 to secure the former Middletown Antique Mall is on hold for the time being.

The deal would have seen the city purchase the former mall, 1607 Central Ave., for $90,000 and then turn around to trade that land with Midd-Town Custom Cabinets for its property at 1316 Vail Ave. The city would have also provided Midd-Town CustomCabinets with $5,000 to help cover their moving expenses.

    The city council was set to hold a second reading on an ordinance approving the land swap at its Tuesday, April 6 meeting, but the legislation did not make the final council agenda.

    Economic Development Director Mike Robinette said the land swap was pulled from the agenda while staff “works on some alternatives for the project.”

    “We’re trying to look at alternatives that would allow them to move forward with the project they’re wanting to do, but not have us involved in the land swap,” Robinette said.

The city became involved in the deal mainly over tax issues, Robinette said, as Midd-Town Custom Cabinets initiated swap conversations in an effort to avoid paying up to $15,000 in capital gains taxes.

    Midd-Town Custom Cabinets, co-owned by Jeff Brown and Don Kennedy, is responsible for carpentry inside of numerous local businesses, including the Middletown Public Library, Java Johnny’s and the now-closed 56 Degrees Wine Bistro.

    Kennedy said the deal has always been “designed to save the city money.”

    “Rather than paying $15,000 in taxes and passing that along to the city in our sale price, we figured we could just do an exchange,” Kennedy said. “It was an even deal as far as we were concerned.”

    Council raised questions about the swap when it came to light the current owner of the Central Avenue property had purchased it for $50,000 mere weeks before the deal was proposed. Kennedy dismissed claims the proposed swap was a “good old deal,” as he said his business is eating the $40,000 loss, not the city.

    “We were in talks with the bank to purchase the land, but (Daniel) Diver made a bid on it and had already been approved,” Kennedy said. “I was two weeks too late in planning this. I pretty much cried my heart out.”

    Their three-man operation has been able to survive for so long by picking from the corpses of larger carpentry operations that went under during the recession. A move to the larger building would allow them space to create a “drop-dead gorgeous showroom” and ideally hire on some additional staff.

S T A F F  R E P O R T
For Business Meeting: March 1, 2015 DATE: 2/17/2015
TO: Douglas Adkins, City Manager
FROM: Alexis Fitzsimmons, Assistant Economic Development Director

Liberty Spirits LLC Community Reinvestment Area Agreement

PURPOSE To obtain authorization from the Middletown City Council for the City Manager to enter into a Community Reinvestment Area (CRA) agreement with Liberty Spirits LLC, to support the development of a craft/artisan distillery, with a tasting room and retail area at 1357Central Ave. in downtown Middletown.
BACKGROUND AND FINDINGS The City of Middletown (the City) Staff has been working with the Liberty Spirits LLC to develop the 1357 Central Ave location. The project includes $300,000 in improvements and will create four (4) part time permanent positions with approximately $80,000 in new payroll. The work on the building is set to be completed by June 30, 2016.
ALTERNATIVES  There is no other alternative.
FINANCIAL IMPACTS In accordance with the School Compensation Agreement with the Middletown City School District, the City will pay the District 25% of what they would have received in real property taxes, if the CRA agreement was not in place.
EMERGENCY/NON EMERGENCY Non Emergency –
1st Reading March 1, 2016
 2nd Reading March 15, 2016

Swohio75

If you read this agreement it states that Robinette will invest $300,000…in the 1357 Central Ave building only?
It also states that this will have a tasting and retail area also...Isn’t that what the Vail and other two Central Ave properties were to be used for?

Since all of these properties are located in the same area it is my understanding that they ALL would be entitled to this same tax abatement. Or when Robinette starts work on the other properties he will simply return to council and request more tax abatements on these properties?

The remarks made by Bohannon at the March 1^st meeting concerned the fact that other projects in the downtown area by Robinette have not been completed due to lack of funding. Bohannon requested proof that Robinette had the $300,000 needed to fund and open this business.

I did watch the meeting and no reference was made by anyone that Bohannon’s concerns were answered or that Robinette had shared any financial records with council members before this meeting.
Another sad night for the voters of Middletown when council members are not able to ask questions so they can make an informed vote.