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Thursday, September 19, 2013

A Bold New Vision Without A Vision: Cuyahoga County and Medical Mart Operator Part Ways

Posted By on Thu, Sep 19, 2013 at 11:47 AM

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The Medical Mar - wait, the Global Center for Health Innovation - has never been a stranger to bad press. And just two months after opening, MMPI, the Chicago-based operator of the GCHI (are we doing the acronym thing on this one?) and the adjoining Cleveland Convention Center is stepping away from it all. Cuyahoga County Executive Ed FitzGerald has said the move is "mutual."

With that shaky news comes yet another sustained moment of "Uh... OK. So what the hell is going on over there?" musing.

The GCHI is, in many ways, the brainchild of Cleveland Clinic CEO Toby Cosgrove. The whole point is to set up some bricks and mortar as a spot to showcase the medical industry's finest wares. The county, helmed by visionaries like Jimmy Dimora et. al., hopped on board and decided to ante up on the healthcare dime. This place would be big, they said.

Here's Scene in a 2011 feature, which pointed out a lot of these current issue:

The concept was said to be new and untested, so Cosgrove brought mart experts in to talk about the plan in 2005. Two years later, the Chicago firm Merchandise Mart Properties Inc. — equipped with taxpayer money that would balloon to an eventual sum of $465 million — was eyeing sites, drawing up plans, and negotiating terms with the county. Quick progress was needed too: Nashville and New York were planning med marts of their own, and the pivotal advantage would go to the one that opened first.

Oh, but here's what MMPI's general manager for the project, Brian Casey, told Scene back then: "You can't insert the mart model that you have in other industries into the medical industry. [Hospitals and doctors] don't go mall shopping for things." With Casey at the reins, he toyed around with the concept, flinging the project in a bold new direction. He kinda ditched the "mart" focus and retooled the scope of the project toward medical conferences and trade shows. Vagaries like that have been accompanied by only a handful of specifics throughout the project's existence. (It's worth bearing in mind for the umpteenth time that this hot mess was balanced on the backs of taxpayers.)

In the ensuing years, MMPI has begun walking away from the mart business, selling off similar joints in High Point, N.C., Los Angeles and Chicago. Time and time again - among MMPI projects and those of other operators - "marts" have proven to be flawed business models.

On the ground here in Cleveland, there's no clear replacement for MMPI as operator of the Med Mart/Convention Center. Officials say an announcement should be made by mid-November. FitzG has mentioned that a new operator gives the county a chance to cut a more financially advantageous contract. The contract with MMPI had the county paying them $40 million per year until 2027, $36 million of which would repay bonds supported by an infamous quarter-of-a-percent county sales tax.

In early 2012, back in Med Mart V. 2.0 or something, Jeff Applebaum, the county-hired lawyer working with the project, offered this take on the matter: "They have indicated to us that this is a shining star in their portfolio. They still have the commitment to this concept."

Uh... OK. So what the hell is going on over there?

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