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Friday, February 1, 2008

Now we know why K&D took Ameritrust off the county's hands

Posted By on Fri, Feb 1, 2008 at 6:02 AM

ameritrust.jpg
The developers at K&D are well on their way to earning back the $35 mill they dropped on this asbestos-filled beauty.
Earlier this month, when the K&D Group submitted the one and only bid to buy the county’s doomed Ameritrust complex, we knew there had to be a hidden motive. What developer in his right mind would pay $35 million for a complex the county bought two years earlier for $22 million? Especially when it was negotiating with the county, which handles money like a senile widower? The asbestos-filled buildings have been vacant for years, and no one seemed interested in buying them until the county commissioners wasted more than $34 million trying to turn them into new headquarters (“Lose Excess Wallet Weight!” December 12, 2007). ... Yet K&D was eager to get in the game. It appears the developer has big plans for revamping a dead portion of Euclid Avenue around East 6th and East 9th Streets. The company wants to turn an old department store at 668 Euclid into apartments and shops, and tear down a neighboring bank building and replace it with a “pedestrian plaza." The Ameritrust complex at East 9th, meanwhile, is destined to be converted into a hotel, condos and offices. Now K&D's payback for taking the embarrassment off the county's hands is beginning to be revealed. It appears the city will be giving it plenty of low-interest loans. The Plain Dealer reports today that Mayor Frank Jackson wants to lend K&D $5.1 million for the department store and bank project. This is in addition to $16.4 million in tax credits that have already been promised by the state, and a $1.1 million loan from the county. City officials are interested in giving K&D even more loans for the Ameritrust site. “We definitely are going to be seeing more investments of this magnitude along lower Euclid and lower Prospect, from Public Square all the way up to the Inner Belt,” the city’s regional development chief, Chris Warren, told the PD. “I think we have the capacity to do two or three of these loans a year.” With all those loans, it looks like K&D will easily earn that $35 million back. Ah, the beauty of government math. -- Lisa Rab

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