Dennis Roche's e-mail last week made it all sound so very urgent. The president of Positively Cleveland — the PR-spun name of the city's convention and visitors bureau — claimed the group's funding is at risk, and supporters must act quickly to contact the county commissioners.
He was talking about the hotel bed tax, passed in 1998, which provides about 80 percent of the group's income. Positively Cleveland receives 57 percent of the tax, a portion of which it redistributes to other organizations and to pay off Gateway debt. Its total budget this year is $5.3 million.
Roche's concern stems from talk that the bed-tax money will be scooped up by Merchandise Mart Properties Inc. (MMPI), the Chicago company tasked with building and running the new convention center and medical mart. As far back as two years ago, Fred Nance, the attorney involved in negotiating the deal between MMPI and the county, publicly suggested that this revenue stream could be redirected to MMPI to assume the functions of Positively Cleveland. Under that plan, some of Positively Cleveland's 36 jobs could disappear or be handled out of Chicago.
Positively Cleveland board member Thomas Mulready, who runs the e-mail newsletter Cool Cleveland, broadcast Roche's warning in last week's edition and urged readers to contact the commissioners as well.
"They've been circling like vultures," says Mulready, referring to the county commissioners and MMPI. "I've seen this coming. [MMPI] is squeezing everything they can squeeze."
Bringing meetings to the convention center represents only about 10 percent of what Positively Cleveland does, according to VP of Marketing Tamera Brown. Like most such groups, it promotes tourism and books meetings in other area facilities. It rebounded from a financial mismanagement scandal in the early 2000s to win awards from groups like the Ohio Travel Association and the Facilities and Destinations directory. It counts among its successes a twice-yearly glossy publication, effective use of the internet and social networking, a visitors center it staffs in the Higbee Building, and placement of recent stories about Cleveland in Travel & Leisure and The New York Times. It also assists conventions, helping with everything from reserving hotels to planning outside activities.
Brown says that if any significant slice of its funding is redirected to MMPI, a large part of what it does simply wouldn't happen, since MMPI's role is slated to be no more than a promoter of convention center events.
As for everything else Positively Cleveland does to lure goodwill — and money — to Cleveland? "It would not be their job," says Brown. "If we go away, there won't be any organization driving meetings to other facilities. If we lose business going into hotels and the I-X Center, any business going into the convention center is just replacing business lost."
In the past year, MMPI has set up a downtown office, staffed by six people, to market and sell the convention center, which is slated to open in 2013. PR Director Dave Johnson says MMPI has signed up 12 events. He doesn't know how big the Cleveland office will be; right now, some booking is being done from MPPI's Chicago headquarters.
According to Roche, the county commissioners could vote on transferring bed-tax funds to MMPI as early as July — months before ground is broken on the new med mart this fall. It's no secret that Positively Cleveland's funding is being eyed by the Chicago company, but Commissioner Peter Lawson Jones says no such plans for a vote are in the works.
"There's been no discussion of which I'm aware," Lawson Jones says, adding that he and the other two commissioners haven't talked about the issue in eight to ten months. "There needs to be a lengthy, comprehensive discussion. I don't see how a decision gets made before a new regime [the new county government, which takes over in January 2011] is in place."
Commissioner Tim Hagan and a spokesperson for Jimmy Dimora also say no conversations about a vote on the bed tax have taken place between them.
As for bringing a vote before the groundbreaking? "I don't think it's viable," says Lawson Jones. "I think they're sounding the alarm, but I don't believe it's realistic."
Lawson Jones envisions three possible scenarios for the future of Positively Cleveland: one in which no changes are made to its funding or its role in the community, another in which the group is folded and MMPI takes over convention center duties, and a third in which roles are shared between the two groups.
"There's still a viable role for Positively Cleveland in the future," he says. "We need to have more discussion on what it is."
Hagan, meanwhile, sounds a more skeptical note when talk turns to Positively Cleveland.
"Ask them to release the salaries of people who work there," he says. "I think part of the concern is what are we getting for our tax dollar? They act as if they are a private entity. That group has been isolated and not scrutinized by the press — I wonder why. I know the people who are asking to continue the amount of money, the basis is 'We're doing all of these good things for Cleveland.' Has anybody independently made that assessment?
"Of course, the people that work there are self-serving: They are going to espouse the view that they are an important part of the community. Maybe they are, maybe they're not, maybe something in between. I think they need to be scrutinized."
Scrutinizing the salaries and activities of Positively Cleveland is the function of its 23-member board. The group's manual states that it is the board's responsibility to "provide proper financial oversight," "support the chief executive and assess his/her performance," "ensure legal and ethical integrity and maintain accountability," and "articulate Positively Cleveland's mission and purpose."
A seat on the board is reserved for one of the county commissioners. Since 2008, that commissioner has been Tim Hagan.
"I've been on the board six years, and I think he's come once," says Mulready. "When Peter Lawson Jones was on the board, he came or sent a representative. Mayor Frank Jackson sends a representative. Tim Hagan does not."
Positively Cleveland communications director Samantha Fryberger says that each member who does not attend a meeting receives a packet of information on what took place.
"There's no way he doesn't know what Dennis' salary is and what we spend on salaries," she says, adding that the group's finances are scrutinized by Destination Marketing Association International, a 90-year-old firm that operates an intensive accreditation process for visitors bureaus. A brief internet search yield's Positively Cleveland's latest IRS 990 form, which notes that Roche makes $300,600 a year; the salaries of its other top people range from $108,365 to $148,013.
Unlike Positively Cleveland, a publicly funded nonprofit, MMPI is a private corporation that doesn't have to account for its spending at all.
"They're not a public organization, so you can't find out," says Mulready. "We get no answers about anything except 'We're in charge, so leave us alone.' But if we hand all this tax money over to a privately owned company out of Chicago to sell their own private shows, who will market Cleveland?"
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