Sunday, July 13, 2003

A Shot Across the Bow
Council Candidate John Schlagetter has put the questions to City Council and the Mayor on the proposed Convergys Deal:
Subj: Convergys Deal Comments & Queries
Date: 07/13/2003 1:13:23 PM Eastern Standard Time
From: john@foregenitor.com
To: Charlie.Luken@cincinnati-oh.gov, laketa.cole@cincinnati-oh.gov, minette.cooper@rcc.org, david.pepper@rcc.org, chris.monzel@rcc.org, alicia.reece@rcc.org


Mr. Mayor & Councilors:

Am I the only person finding it odd that a company based upon leveraging
distance relationships via technology wants $200 million in public money to
co-locate its own employees?

Several questions come to mind that are not addressed in the City Manager's
Memo published today by the Enquirer:

1. What is the Net Present Value of this "investment?"

2. What is the Discount Factor used to calculate this NPV?

3. What is the total sale price for the Third Street parking lot? (plus
column)

4. What is the loss in annual parking revenues resulting from the sale of
the parking lot? (minus column)

5. What is the Fair Market Value of the easement being given away between
Hammond Alley & Third Street? (minus column)

6. What is the FMV of the air rights above same being given away? (minus
column)

7. What is the FMV of the Pedestrian Access Right of Way being given away?
(minus column)

8. Convergys' current demand is for 300 people from Norwood Plus 97 per
year for 15 years. I am curious about the options considered and rejected
to locate them in the Convergys Center and its environs such as the
Provident Bank Building at Seventh & Vine, any space in the old Enquirer
Building, etc.

9. What percent of Convergys' current & proposed employees will live in
jurisdictions with their own local tax, further reducing the City's
collection?

Using the Posts' figures, the 15 year NET earnings tax collections per
employee will by less than $4,600 (not discounted for inflation). There
appears to be tremendous economic friction involved in this deal. This is
not an economic growth strategy; it is simply re-arranging deck chairs on
the Titanic.

Net: Convergys is willing to spend $100MM on a new building; the City & the
State are willing to spend $200MM to keep them here. Is there a third way
wherein the City & State fund the parking decks at The Banks which we need
anyway thus giving Convergys a platform upon which to erect its new
design-to-suit building? This presumes a CBD-Riverfront location is the
only option; consider also Broadway Commons, Queensgate (hideously
under-utilized land), West End (Western, EZ, Freeman exits), et.al.

Based upon the information provided in the City Manager's report (and the
appalling amount of information missing which is necessary to make an
informed investment decision), I find it hard to believe this deal as
structured is in the City's and the citizens' best interest.

Regards, J.

John Schlagetter
"Schlagetter for Cincinnati"
A Charter Committee Candidate
707 Race Street Suite 800
Cincinnati, Ohio 45202
513.652.3032 voice
513.929.0555 fax
www.john4council.com
These are valid issues that should have been published on the city website. Open deal making is the only way to assure a democracy.

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