Tuesday, June 24, 2003

Taxpayers stuck with Kroger's $15M bill



By Gregory Korte
The Cincinnati Enquirer

Cincinnati City Council members say they have no choice but to pony up $15 million to build a parking garage for the Kroger Co. in order to keep the company's headquarters downtown.

But they don't have to like it. Members of the Finance Committee had some tough questions Monday about the proposed garage at Vine Street and Central Parkway. Among them:

• What guarantees are there that Kroger will stay downtown?

• Why didn't Kroger tell the city about its impending parking crisis sooner?

• Why will the 1,000-car garage cost $15,000 a space, when suburban projects are spending half that?

"I'm going to support this, because the bottom line is that Kroger is simply one of the most important assets this community has," said Finance Committee Chairman John Cranley. "I don't think it's any surprise that the deal itself isn't anything to rejoice about. I don't think I got straight answers to any of my questions."

City Manager Valerie Lemmie is proposing an 850- to 1,000-space garage. Kroger would pay $510,000 - essentially, the annual operating cost - with the city picking up $1.4 million to $2 million in annual debt payments.

The city's portion would be financed, in part, by higher rates at city owned lots downtown - meaning the end of three-hour, $1 parking.

A provision of the deal gives the parking deck to Kroger - and requires the company to take over debt and maintenance payments if Kroger leaves town.

Mayor Charlie Luken said the clause is intended to give Kroger a gradually decreasing incentive to stay - and allow the company to find a tenant for the 44-year-old Kroger Building by linking the parking to the building.

But Cranley wondered if that wouldn't help Kroger leave town.

CEO Joseph A. Pichler said the May 6 passage of the $480 million school bond levy - and the resulting plans to build a school on a parking lot near Washington Park in Over-the-Rhine - precipitated the parking crunch.

Cranley wanted to know why Kroger never mentioned that fact when it was supporting the bond levy.

"Did you feel no obligation to tell us this would cost us $15 million - in addition to the additional property taxes for our residents?" Cranley said.

City Council will vote to approve the deal in principle Wednesday, with a decision on a more specific financing plan expected in August.

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E-mail gkorte@enquirer.com




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