A school for special-needs kids is caught in the middle of bickering in a struggling suburb

The prevailing spirit in Cuyahoga County — distrust in public leadership — fans controversy in the sleepiest communities. Witness Fairview Park, where the struggle to keep tax dollars in the west-side suburb has sparked tension between City Hall, self-styled watchdogs and one of Greater Cleveland's largest educational nonprofits, Positive Education Program (PEP).

Fairview Park, a bedroom community of 17,000, faces a $1.75 million budget deficit, according to a letter sent to residents in February. And that's before NASA Glenn closes two buildings there and relocates employees to Brook Park, a move expected to cost Fairview Park about $400,000 in annual tax revenue.

This comes despite civic leaders spending years trying to position the city to avoid this type of crisis. In 2005, a coalition of residents spearheaded a project dubbed Gemini, involving the city and school district with the goals of building a recreation center, razing school property for redevelopment and giving the suburb a competitive edge over its neighbors. At the end of that year, when city officials learned of NASA Glenn's plans, city leaders teamed up with state and business organizations to work with NASA to find a tenant for those buildings, says Fairview Park development director Jim Kennedy.

Then in 2006, another major employer, the medical-billing firm Quadax, Inc., told city leaders that it needed more space. Quadax seemed like a good candidate for the NASA buildings, but the deal fell through. Quadax, which employs 230, left Fairview Park in the summer of 2008.

Fairview Park's loss was Middleburg Heights' gain. Middleburg Heights partnered with the state to lure the company to the southwest suburb with tax credits. City officials said at the time that they had persuaded Quadax not to move to West Virginia or California.

The Fairview Park building that once housed Quadax — a 32,500-square-foot office tower on Brookpark Road — remained vacant. And that's how PEP entered the picture.

In late '08, PEP announced its purchase of the building for $3 million; the organization planned to establish a school for children with autism. But some residents groaned. PEP is a nonprofit, and the move meant a loss of $95,000 annually in property-tax revenues for the city. Even Mayor Eileen Patton admits that she's "sick over" the loss of tax dollars. City officials have said that they would have preferred a taxpaying entity to move in, but there was nothing they could do.

That's not good enough for Gemini Project activists, who want to know why City Hall did not tell Quadax about five acres of school land that was being cleared for redevelopment. Dennis Rehor, school-board president at the time of Quadax' departure, confirms, "We were not contacted about any possibility in using the school property ... as a possible relocation site for Quadax."

The whole point of the Gemini project was to find ways to increase the city's tax base, says Robert Kreps, a lawyer who co-chaired the Gemini project. The 4.7-square-mile suburb is built out, he says: "We don't have the advantage of having [open] land to lure people in and have them develop."

Jim Sassano, a lawyer and former city council hopeful, says, "This goes to the competency of the development director. Why didn't they get the school district and Quadax together about a deal to develop that land?"

Kennedy tells Scene that putting Quadax on school land never came up because it wasn't a "workable" solution. The school district had not demolished the old building on the property at the time Quadax was gearing up to leave. Even if the district had tried to sell the property, it would have involved a protracted, state-mandated process that could well have derailed a sale to Quadax anyway.

Kennedy also expressed frustration at the criticism aimed at him.

"I find it interesting, in this tiny community, where everyone knows everybody, that people have to skulk around and do stuff like that rather than coming to the powers that be and saying, 'Here's my question'," says Kennedy. "That's not the way I do business. If I have a problem, I don't call a goddamn newspaper and sic 'em on my perceived enemy. I go deal with it."

But tensions have only escalated.

In June '09, PEP asked the city to help the nonprofit acquire $4 million in tax-exempt financing, and mayor Patton and city council supported the request. While the nonprofit said it needed the money to renovate the building, critics asked why the city would help the agency.

"From my standpoint, if you look at something like this and you cannot think of a good reason why it was done, what kind of reason does that give you?" says Kreps. "It leaves either incompetence, or worse. You don't want either of these in your city. It disturbs me."

Adds Sassano, "Did taxpayers in Fairview Park get screwed? If they did, [city leaders] should be held accountable."

There has been some confusion over the complexities of the financing deal, say city and PEP officials. Charitable organizations must work with public entities — like cities — to acquire tax-exempt financing, and the process includes a bond issue. Unlike other bond issues in which bonds are sold, KeyBank is the sole holder of the debt, and PEP is responsible for repayment. While the city acted as a conduit for PEP to acquire the loan, the city did not pay one cent to facilitate the transaction, says Patton.

A PEP official who spoke to Scene says the process to establish a school in Fairview Park "was done within the letter of the law." Adds Kennedy: "There is no ulterior motive or cloak-and-dagger."

The PEP school in Fairview Park is scheduled to open in August. PEP will pay about $60,000 in income taxes annually. But whether the simmering feuds over increasingly dire straits will blow over remains to be seen. Due to the budget deficit, the city will impose a pay freeze and furlough days on its workers, and residents will start paying a $10-a-month trash tax — the solution du jour for cash-strapped communities in Cuyahoga County.

Patton says city officials have worked openly and in the best interests of the city. She calls the attacks by Sassano and others "political."

"I have an open door policy, and every one of our residents knows it," Patton tells Scene. "I encourage e-mail, I go to every [event] possible. We probably have the most open City Hall the county has ever seen."

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