A Memorandum of Understanding
In February of 2007, a memorandum of understanding to sell Kaufman Park was signed by Thomas Jordon, Director of Planning and Development under the George administration. The signed memorandum states a sale price of $1,925,000, approximately $192,000 per acre.
The memorandum was signed by the City and Giltz and Associates, Inc, an Ohio Corporation. Not an official sales agreement, the memorandum was subject to “Planning Commission and Council Approval”. It and related documents were obtained through a public records request made to the City in early 2008.
An official of the new Fitzgerald administration stated that the memorandum is “off the table”.
At the time the memorandum was signed an entity affiliated with Giltz had obtained an option to purchase Lakewood Plaza, a.k.a. Drug Mart Plaza. The plaza is located in front of Kaufman Park and across from Lakewood Public Library. The future of the park and plaza were the subject of intense debate during the recent election. Both the mayor and ward two races dealt with this issue during their campaigns.
The developer envisioned an “up scale, mixed use project…having acquisition and construction costs exceeding $30,000,000… which will consist of retail shops, a pharmacy, restaurants, rental offices, office condominiums and for rent and for sale residential units.” The proposed name of the development was The Forum at Lakewood.
The drawings indicate a high rise structure of about ten stories that would offer an “incredible view of Lake Erie and Downtown Cleveland”.
The City desired that a “portion of the park parcel remain open for public use…that fit with the overall project as envisioned by the developer, in light of costs and land constraints”. The site diagram, exhibit A, submitted by the developer shows no public space.
The memorandum requested that the City fund the development through tax increment financing, with the developer requesting “that the City make available …service payments in lieu of real estate taxes”. Under tax increment financing, property tax revenue would be used to pay off the debt incurred by the developer.
The memorandum also required that the project be an “all union, prevailing wage project” with requirements for female and minority participation.
Giltz completed the purchase of Lakewood Plaza in September of 2007 for a price of $5,750,000. According to the County Auditor, at the time of the purchase the estimated market value of the Plaza was about $2,700,000. Property taxes on the new value would be about $200,000 per year.