Representatives for Western & Southern and the Anna Louise Inn will be in court Oct. 30 arguing in front of the First District Court of Appeals, which could overturn a May 4 ruling and allow the Inn to move forward with a planned $13 million renovation. A separate series of rulings by the Historical Conservation Board have gone in favor of the Anna Louise Inn, potentially paving a way to renovate even if it loses this appeal.
This week’s hearing will be the latest in a series of legal and zoning challenges made by Western & Southern, which wants the Anna Louise Inn, the city’s only social service agency dedicated to single, low-income women, to move out of the affluent Lytle Park district after more than 100 years so its building can be renovated into an upscale hotel.
On Sept. 27, The Enquirer published a guest editorial by John F. Barrett, CEO of Western & Southern Financial Group, and on Oct. 3 published a response by Stephen MacConnell, president & CEO of Cincinnati Union Bethel, which owns the Anna Louise Inn.
CityBeat analyzed both editorials for accuracy, finding numerous misrepresentations and at least one glaring factual error in Barrett’s piece, but nothing inaccurate in MacConnell’s, which was largely dedicated to disputing claims made by Barrett.
Barrett’s editorial begins with Western & Southern’s oft-used public-relations phrase: “win-win.” Barrett writes: “Our proposal for Anna Louise Inn, its owner Cincinnati Union Bethel and Lytle Park is a win-win for every stakeholder involved.” The phrase in the article’s headline as well: “Anna Louise Inn: a win-win.”
CityBeat has covered the dispute extensively for the past few months, including in a story that found documentation of Western & Southern declining an offer to purchase the property in 2009, one year before the Anna Louise Inn received federal loans to renovate and stay in the neighborhood (“Surrounded by Skyscrapers,” issue of Aug. 15). Western & Southern then sued to block the funding.
Barrett’s editorial argues that Western & Southern has been reasonable in its attempts to purchase the property and that his vision for the neighborhood is in the best interest of the city and the Anna Louise Inn. The most glaring misrepresentation in his piece is his characterization of the Anna Louise Inn’s federal loans as a “taxpayer bailout.”
Barrett: “Then — and this is our gripe — they turned to the taxpayers for a bailout” (emphasis added). Doesn’t it seem disingenuous — at best — for them to now claim, with a $13 million taxpayer handout, that their mission can only be fulfilled at their current location?”
The financing in question, called tax-credit financing, is a federal loan distributed by the city or state that allows businesses to invest in the loan in exchange for lower tax rates. The developer repays the money — and both The Enquirer and Western & Southern are familiar with the process, as The Enquirer regularly reports on development and Western & Southern has used this same financing for its own projects.
CityBeat contacted Enquirer editor Carolyn Washburn regarding Barrett’s editorial to ask about the newspaper’s fact-checking policy for guest editorials.
Washburn said in an email that The Enquirer offers a good amount of leeway for writers to say what they want to say and to characterize situations the way they want because it’s their own opinion. She also said if the editorial page editor knows something is factually inaccurate, he’ll ask the writer to change it.
CityBeat followed up with a question about Barrett’s representation of tax-credit financing as a “bailout” and “taxpayer handout.”
Enquirer editorial page editor David Holthaus responded via email, saying that the use of the term “bailout” came up during his conversations with Western & Southern about the editorial. Holthaus attributed the term to Barrett’s belief that the per-unit cost of the renovation is higher than average market costs and said his readers benefit from directly hearing Barrett’s thoughts and opinions on the matter. (It should be noted that the renovation plan ranked No. 1 in a statewide competitive bid by the Ohio Housing Finance Agency, though this has nothing to do with whether the funding is repaid or not.)
“Agree or not with that description or interpretation, that is how Mr.
Holthaus also pointed out that The Enquirer published its own editorial supporting the Anna Louise Inn and arguing that Western & Southern should stop its efforts to obtain a property that is not for sale.
The following is a series of Barrett’s statements that CityBeat believes deserve clarification.
• Barrett: “(CUB) rejected the offers of several bidders, including Western & Southern. They were asking too much in the then-existing real estate market.”
FACT: According to letters obtained by CityBeat , Western & Southern actually rejected an offer to purchase the Anna Louise Inn for $3 million in 2009, the same price it is currently offering for the property. Cincinnati Union Bethel executives say the property was appraised at considerably more than that at the time. The property is currently valued at $4 million by the Hamilton County Auditor.
• Barrett: [in reference to converting the Inn into to a hotel]: “A win for the city and the broader community because it generates an economic impact of almost $400 million over 30 years, including $90 million of household earnings and $44 million of new local taxes.”
FACT: These figures are based on the results of an economic study relying on unverified construction costs and revenue projections provided by Western & Southern.
• Barrett: “The purpose of our lawsuit was to protect our rights under the zoning laws, not bully CUB.”
FACT: Western & Southern was not concerned with zoning laws enough to file suit when the Off the Streets program, which helps women involved in prostitution turn their lives around, was implemented in 2006. CityBeat asked W&S lawyer Francis Barrett why, if the use first changed in 2006, did Western & Southern wait until 2010 to file its lawsuit. Barrett said, “Because it was understood that they were going to move.”
• Barrett: “Further, we recognize the Anna Louise Inn’s history and mission, but that mission has changed dramatically in recent years. It has changed from providing affordable housing for working women to serving as a homeless shelter and prostitution recovery center.”
FACT: The Anna Louise Inn still provides affordable housing for single, low-income women in addition to its prostitution recovery program, which currently includes fewer than 20 women. According to emails obtained by CityBeat, Mario San Marco, president of W&S real estate subsidiary Eagle Realty, praised the Off the Streets program as recently as 2009, writing in an email to Cincinnati Union Bethel, “Congratulations to all of those involved with the Off the Streets program. I was delighted last year to be part of the selection committee when the same program received a Star Award from the OTR Chamber.”
Anna Louise Inn: How We Got Here
The Anna Louise Inn and Western & Southern have shared the affluent Lytle Park neighborhood for nearly a century. Their leaders used to exchange friendly letters and emails, and Western & Southern regularly donated to the Inn’s fundraisers. One of Western & Southern’s highest-ranking executives served on a board that gave the Anna Louise Inn’s prostitution recovery program a high honor just a couple years before that same program was singled out by the corporation as bad for the neighborhood.
The following is a brief timeline of events leading to an Oct. 30 hearing when the First District Court of Appeals will rule on whether or not the Anna Louise Inn should be categorized as affordable housing, as it has been for decades, or a special assistance shelter, as Western & Southern has argued. If the court overturns the ruling, the Inn will be allowed to proceed with its renovation. A separate series of rulings by the Historical Conservation Board have gone in favor of the Anna Louise Inn, potentially paving a way to renovate even if it loses this week’s appeal.
1909: The Charles P. Taft family donates the Anna Louise Inn to Cincinnati Union Bethel and names it after their daughter in order to help CUB continue its mission of providing safe and affordable housing for women. Cincinnati Union Bethel, which owns the Inn, has been around since 1830 and is credited with starting a number of innovative social service programs like the first free kindergarten in Cincinnati and free medical services before the Health Department existed.
Sept. 14, 2005: Western & Southern donates $5,000 to Cincinnati Union Bethel to celebrate the organization’s 175th birthday.
2006: Cincinnati Union Bethel begins its Off the Streets program, which helps women involved in prostitution turn their lives around.
Jan. 19, 2007: Western & Southern donates $1,000 to the Anna Louise Inn’s Off the Streets program.
Feb. 7, 2008: Western & Southern donates $1,000 to the Anna Louise Inn’s Off the Streets program.
May 29, 2008: San Marco serves on a selection committee that awards the Anna Louise Inn’s Off the Streets program the Over-the-Rhine Chamber’s Star Award, which is given annually to “outstanding individuals, organizations and businesses to recognize the positive impact they have made in Over-the-Rhine over the past year.”
Sept. 19, 2008: Western & Southern donates $1,000 to the Anna Louise Inn’s Off the Streets program.
Dec. 1, 2008: Eagle Realty President Mario San Marco sends a letter to Cincinnati Union Bethel President & CEO Stephen MacConnell offering $1.8 million for the Anna Louise Inn. Eagle Realty is the real estate arm of Western & Southern.
Feb. 17, 2009: Cincinnati Union Bethel President & CEO Stephen MacConnell offers to sell the Anna Louise Inn to Western & Southern for $1.8 million plus a combination of other contributions that would total $3 million in value.
March 24, 2009: San Marco congratulats CUB on an award: “What good news for the good work that you and your colleagues do at CUB (Cincinnati Union Bethel). Congratulations to all of those involved with the Off the Streets program. I was delighted last year to be part of the selection committee when the same program received a Star Award from the OTR Chamber.”
June 4, 2009: San Marco sends MacConnell a letter saying Eagle Realty cannot raise its offer higher than $1.8 million because of “challenges and complexities of development in our (Central Business District).”
Dec. 28, 2009: Western & Southern donates $1,000 to the Anna Louise Inn’s Off the Streets program.
July, 2010: Cincinnati Union Bethel wins state-distributed federal funding to renovate its historical building using state-distributed federal loans.
Jan. 21, 2011: Eagle Realty President Mario San
Marco sends a letter to Mayor Mark Mallory, City Manager Milton Dohoney
and all nine council members, arguing that the city was mishandling federal loans won by the Anna Louise Inn.
May 27, 2011: Western & Southern files a lawsuit claiming the Anna Louise Inn is improperly zoned due to the 2006 implementation of the Off the Streets program. The lawsuit, against the Anna Louise Inn and city of Cincinnati, freezes both the state- and city-distributed federal loans and puts the renovation on hold indefinitely.
May 4, 2012: Judge Norbert Nadel rules that the
Anna Louise Inn is a “special assistance shelter” rather than
“transitional housing. “Cincinnati Union Bethel appeals the decision and
also applies for a conditional use permit from the Historic
Conservation Board under Judge Nadel’s definition, because special
assistance shelters qualify for conditional use permits under the city’s
Aug. 27, 2012: Cincinnati Historical Conservation Board approves a conditional use permit that could allow the Inn to move forward with a the renovation of its historic building as a special assistance shelter. Western & Southern appeals.
Oct. 30, 2012: The First District Court of Appeals will hear arguments in the Anna Louise Inn’s appeal of Nadel’s May 4 ruling, which set in motion the Inn’s attempts to secure zoning approval from the Historical Conservation Board (see right side). ©