Nearly a year after Toledo Mayor Paula Hicks-Hudson got the go-ahead to negotiate city ownership of the Government Center tower downtown, the building remains in the hands of the state.
A split Toledo City Council last June authorized the mayor to close a deal to take over the Michael V. DiSalle Government Center at no cost but with the stipulation that the city would have to take on the deferred maintenance, including repairs to window sealant and its heating and air conditioning system.
Council voted 7-4 to give the go-ahead the same day Gov. John Kasich signed the state’s two-year budget bill, which authorized his administration to sell the 22-story office building within three years.
At the time, Mayor Hicks-Hudson said acquiring the building would put the city in control of the space it occupies.
The mayor said she hasn’t decided to proceed.
“I believe we are going to do our due diligence to come up with an answer,” she said.
Mayor Hicks-Hudson said she has to consider occupancy and the condition of the building.
Records obtained by The Blade show the city paid $391,293 on Sept. 1 for the third quarter of 2015, and $332,644 on Feb. 4 to cover the fourth quarter of 2015.
There were also two $4,875 payments for third- and fourth-quarter parking costs that were paid in September and October, respectively.
City Spokesman Janet Schroeder said rent for the first half of 2015 was placed in escrow and that money would be kept by the city for repairs if the city does in fact acquire the building.
If the city decides not to acquire the building, that money would be remitted to the state, Ms. Schroeder said.
She also said the second half of 2013 was not paid and nothing was paid in 2014. Instead, that money was put into escrow.
There is $3,094,672 in that escrow account, Ms. Schroeder said.
“We have an agreement with the state of Ohio for that money to be used for upgrades or be returned to the state if we do not take the building,” Ms. Schroeder said.
The late mayor D. Michael Collins in 2014 proposed taking over the building after a rent dispute with the state. As of mid-2015, Toledo had not paid rent since mid-2013 and owed about $3.1 million at that time.
Ms. Schroeder in an email said the city had not been sent invoices when the Ohio Building Authority changed over to the Department of Administrative Services.
“Then the Department of Administrative Services came to us and said they realized that we had not been billed, also discussed their intentions to raise the rent,” she said.
In March, 2014, Collins administration officials said the state wanted to more than double the rent, retroactively to July 1, 2013, from $6 per square foot to $13.01. A rent of $9.18 per square foot was negotiated later.
“It was at that time that Mayor Collins began to consider whether it might make sense to purchase the building. We have worked with the Department of Administrative Services to place into escrow those funds that were not paid in rent and which are earmarked to make repairs should the city purchase the building,” Ms. Schroeder said.
Last June, city officials said the building, which houses city, county, and state offices, needed at least $5.4 million in repairs. Councilman Sandy Spang, who voted last year against authorizing the mayor to acquire the building, said she had been told the repairs would cost more than that.
“I think we would really be taking on something that would be a distraction from our main mission,” Ms. Spang said.
Councilman Tom Waniewski, who also voted no last year, said the city has a bad track record of managing properties.
Mr. Waniewski cited the city’s decision in the 1990s to put the city on the hook for the redevelopment of four apartment projects: the Hillcrest, Museum Place, the LaSalle, and the Commodore Perry. In 2000, the city was forced to begin paying the general obligation bonds on the apartment building projects, which has cost more than $1 million annually since then.
“We get strapped with the bills,” he said. “We have to get back to the basics of doing things good on a few levels — police, fire, infrastructure. I have been preaching that since Day One and we are no closer now.”
However, Councilman Larry Sykes favors city ownership.
“I would not rent to buy,” he said. “I would prefer to own... We would look at negotiating with people who would love to move down here.”
Mayor Collins said in 2014 that if the city of Toledo were to acquire ownership, renting out space to private companies would be a consideration.
An amendment in the city ordinance prohibits the city from taking ownership of the building until it has reached a lease agreement with Lucas County, which rents 129,262 square feet for $7.43 a square foot. The county pays $240,105 for three months of rent, said Jessica Ford, administrative project manager for the county.
County Commissioner Tina Skeldon Wozniak said she is amenable to the city acquiring the building as long as the county's rent is “comparable” to what it currently pays and the building is maintained to the same standards.
The building was designed by the late renowned architect Minoru Yamasaki, who also designed the original World Trade Center in New York and two buildings on the campus of the University of Toledo Medical Center and College of Medicine and Life Sciences, formerly the Medical College of Ohio.
Ground was broken in 1981 under Republican Gov. James Rhodes and the $61 million structure was occupied beginning in April, 1983. The facility was first named for Mr. Rhodes, but renamed in 1986 during Democratic Gov. Richard Celeste’s administration in honor of former governor and Toledo Mayor Michael DiSalle.
Contact Ignazio Messina at: imessina@theblade.com or 419-724-6171 or on Twitter @IgnazioMessina.
First Published April 10, 2016, 4:00 a.m.