The cash will be used to do planning and design work for the system’s $128 million first phase, which includes a loop through downtown and Over-the-Rhine and a connector link to the University of Cincinnati. More council approvals are needed before the project actually can be built.
But perhaps the more interesting story involves a question about exactly who should be making those approvals. The NAACP’s local branch — led by Christopher Smitherman, a streetcar opponent — has alleged that City Councilman Chris Bortz has a conflict of interest involving the streetcar project and should resign his council seat.
Bortz, who has been one of the streetcars’ earliest and most vocal supporters, is chairman of City Council’s strategic growth committee, which is responsible for overseeing downtown development as well as residential and commercial development projects citywide. As his day job, Bortz works for his family’s business, Towne Properties, which has developed numerous projects across the city, mostly apartments in Downtown and Mount Adams.
Last week Smitherman said a recently disclosed letter sent by the Ohio Ethics Commission to then-City Councilman John Cranley in July 2008 supports Smitherman’s contention that Bortz should resign. The Ethics Commission sent its advisory opinion in response to Cranley’s question about whether his formation of a company to do development projects along River Road, west of Downtown, constituted a conflict of interest.
Cranley had told the commission his company wanted to ask the city to approve a Tax Increment Financing (TIF) district for one of its projects. A TIF district involves taking the tax revenues generated by property owners in the project and — instead of going into the city’s general fund — using that money to repay debt incurred by the developer for installing infrastructure for the project, like roads and sewers. Cranley added that he planned to abstain from any votes that City Council would take on the matter.
The Ethics Commission, however, said that wasn’t sufficient and advised Cranley he had a conflict of interest.
The commission’s letter stated that “disclosure and abstention are insufficient for you to comply with the Ethics Laws if the (company) will seek or receive any financial benefit from the TIF. If the (company) intends to seek service payments from the TIF, you must either step down from your position on City Council or end your relationship with the (company) before any authorization is proposed to or made by the city.”
As a result, Cranley resigned from City Council in January 2009 after serving for eight years.
Last week Smitherman said, “Councilmember Cranley did the right thing after receiving the letter from the Ohio Ethics Commission stating that his development company … would or was receiving TIF was a conflict on interest.”
The local NAACP sent a copy of the 2008 letter to Hamilton County Prosecutor Joe Deters to consider criminal charges against Bortz: “The Prosecutor’s Office should open a grand jury investigation in this matter.
Additionally, Smitherman questioned whether Towne’s DeSales Corner commercial project and DeSales Flats apartment project, both in Walnut Hills and both of which received city funding support, were conflicts. This isn’t the first time that Smitherman has raised the issue. He also did so in a CityBeat cover story in January 2009, before he had access to Cranley’s letter.
At the time, Bortz was asked if Towne owned any properties along the streetcar route. He replied, “I think, yes, an apartment building like Garfield Place or The Gramercy, but those are in partnership with the city. I think the city actually owns them.”
Bortz also noted that he abstained from any votes on streetcar efforts, that the project originally was pushed by mass transit advocates and that he’s never been directly involved in discussions about the streetcar route, which was recommended by consultants and city staffers.
Smitherman’s interpretation of the Ethics Commission letter is off-point and misleading, Bortz told CityBeat this week.
“I did check back in January 2009, when Mr. Cranley resigned, to reconfirm that as an employee of Towne Properties I am not prohibited from serving on Cincinnati City Council,” Bortz said. “Councilmember Cranley had a direct interest as an owner of City Lights, LLC. I have never had any ownership interest in any of Towne’s dealings with the city.”
He cited four separate Ethics Commission opinions (Adv. Ops Nos. 86-005, 89-008, 89-009, 92-002) to back up his assertion. The commission has stated that “an employee of a firm, who has neither ownership interest nor a fiduciary interest as an officer of the firm, is not generally considered to have an interest in the contracts entered into by his employer.”
“I am required to abstain from discussing, deliberating or voting on any matters involving Towne Properties and I have done so consistently, including DeSales,” Bortz added.
Because dozens, if not hundreds, of people own property along the proposed route, there isn’t a specific benefit to Towne.
“I also did ask the city solicitor if there was potentially any conflict that could exist because Towne Properties, which owns or maintains varied property interests, could potentially benefit from the development of a streetcar system,” Bortz said. “I was informed that because the nature and the scope of the project would potentially result in an economic benefit to large numbers of property owners in Cincinnati, there is no conflict.”
He then cited an Ethics Commission advisory opinion from 1992 that addressed whether a Village Council member had a conflict because the person would benefit from an infrastructure improvement that was part of a neighborhood revitalization project.
The commission stated, “(Ohio law) does not prohibit village council members who own property within the village from benefiting from an infrastructure improvement which is part of a comprehensive neighborhood program.”
Its advisory opinion added, “to hold that public officials who own property which would benefit from infrastructure improvements have an interest, or occupy a position of profit, in the public contracts for the improvements would effectively render it difficult or impossible for a political subdivision to undertake infrastructure improvements.”
Bortz called the NAACP’s suggestion that he resign “an accusation that seems designed to distract from, not add to, the advancement of our community.”
All of which leaves observers left to wonder if Smitherman knew about the other opinions before he made his claims — or if he should’ve at least done some research. Smitherman hired Chris Finney, a leader of the anti-streetcar Coalition Opposed to Additional Spending and Taxes (COAST), as the NAACP’s legal adviser. Surely, an attorney like Finney would know the law on this matter.
The impression that’s left is, having failed to pass an NAACP-backed charter amendment in 2009 that likely would’ve killed the streetcar project, Smitherman is now grasping for another way to defeat it.
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