As Cleveland’s $465 million medical mart project inches closer to a groundbreaking, critics still question whether the pricey public investment is worth the untested concept’s risk.
One notable voice joining the conversation is former Pittsburgh Mayor Tom Murphy, now a senior resident fellow at the Urban Land Institute, who spoke to Bloomberg News for a lengthy article about Cleveland’s medical mart gambit. Murphy was mayor of the Western Pennsylvania city from 1994 to 2005.
“It’s a shot in the dark in some ways, in their ability to create a new economic diversity for their economy,” Murphy said. “I would want to see some commitments before I would spend that kind of money.”
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By saying “that kind of money,” Murphy is referring not only to the medical mart’s $465 million price tag, but to the $840 million the mart could end up costing Cuyahoga County taxpayers. The larger amount factors in costs such as amortization and was an estimate from the St. Louis-based investment bank that is managing a county bond offering for the project.
MMPI, the Chicago-based property developer that’s leading the project, has yet to sign any tenants for the medical mart, a planned collection of medical product showrooms that’s expected to be populated by sellers of medical devices, information technology, furnishings and other equipment. The mart will be connected to a newly renovated convention center in downtown Cleveland.
Others worry that Cuyahoga County taxpayers are footing too-large a percentage of the medical mart’s bill — much of which is covered by a quarter-cent, county-wide sales tax increase passed without a voter referendum — and that MMPI doesn’t have enough “skin in the game.”
MMPI is contributing about $20 million for tenant installations and $8.5 million through forgoing lease payments. It also is responsible for cost, repair and operating overruns, Bloomberg reported.
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The Chicago property developer is “getting a convention center and the medical mart property essentially for nothing,” said Heywood Sanders, a professor of public administration at the University of Texas-San Antonio and a critic of publicly subsidized convention centers. “The question is: ‘Can it deliver on its expectations?’ ”
An MMPI spokesman declined comment on criticism of the project, Bloomberg reported.
Cleveland Clinic CEO Toby Cosgrove, who’s credited with helping pioneer the medical mart concept, argues that it wouldn’t be a huge problem if the medical mart didn’t deliver on expectations.
“What’s the worst thing that could happen if this fails?” he asked. “You have a brand new building and a new convention center. So the downside isn’t too bad.”
The taxpayers who’ve footed the bill for Cosgrove’s idea probably would be a little less understanding if the medical mart does indeed fail to deliver jobs and economic development to Northeast Ohio.
