toledoblade.com --

The two developers who won the contract to convert the former Toledo Edison steam plant into upscale housing previously contributed money to Toledo Mayor Jack Ford, but even his biggest critic said he didn't think it affected the mayor's decision.

According to campaign finance reports on file with the Lucas County Board of Elections, Jim Jackson contributed $700 in 2001 and 2002 and David Ball contributed $600 in 2002.

Mr. Ford recommended Water Street Development Co. LLC, a partnership of Mr. Ball and Mr. Jackson, to acquire and renovate the steam plant adjacent to Promenade Park along the Maumee River waterfront downtown.

Toledo City Council approved the agreement last Tuesday.

The deal generated intense debate because the administration agreed to provide an incentive of $300,000 to add to the $19.7 million to be invested by the developers - and because the mayor rejected a competing bid from a Tiffin developer who said he did not need the $300,000.

Mr. Ford said he was persuaded by the quality of the proposal, not the campaign contributions.

"At a certain point when you're mayor you have to make a decision," Mr. Ford said. "I thought it was the best deal and I still feel that strongly."

The mayor pointed out he has received more than $800,000 in contributions from supporters.

He said he recalled seeing Mr. Jackson and Mr. Ball at his fund-raisers, but was not specifically aware of the amounts given.

"It played no role in my decision," he said.

Councilman Rob Ludeman, a potential Republican candidate for mayor and Mr. Ford's biggest critic on the handling of the deal, said he did not think the contributions affected the mayor's decision.

But he said he did not believe that the competing developer, Rod Kagy, president of KG&R Development Corp. of Tiffin, got a fair hearing.

"If the decision had not already been made to give it to Jim Jackson and Dave Ball, there would have been plenty of consideration given to Kagy," Mr. Ludeman said.

Mr. Ludeman said he joined the 11-0 vote for the Jackson-Ball proposal because it is a good proposal, and because there was no other deal on the table.

"I have nothing against Dave Ball and Jim Jackson. They'll do a good job," Mr. Ludeman said.

"Kagy had not been involved since August, and according to what information I had, he wasn't interested in it [anymore]," he said.

Mr. Jackson could not be reached for comment.

Mr. Ball said his contributions were relatively small and were not designed to sway the mayor.

"I didn't do that so I'd get the steam plant deal," he said. "I give to who I think will do a good job."

Mr. Ball said he and Mr. Jackson have been unfairly portrayed as receiving a "gift" from the city in the form of the steam plant contract and the $300,000 city contribution.

"If it's such a great gift, how come people weren't lined up to do this deal?" Mr. Ball asked.

"This was out there and available and publicized for 20 years and nobody did it," he said. "They were begging people to come forward and do it."

Mr. Ford has defended his selection, as have members of his administration, including Bill Carroll, the director of economic and community development, and Robert Gilchrist, the commissioner of community development.

A history of interest

Mr. Ball and Mr. Jackson have been interested in the steam plant for several years.

Mr. Jackson was a losing bidder for the steam plant project in 2001, when then-Mayor Carty Finkbeiner awarded the project to California developer Skip Chodak.

Mr. Chodak died of a heart attack in February, 2003.

A review of the timeline shows that the administration awarded the project to the Jackson-Ball team in August even as Mr. Kagy was hurrying to submit final details of his competing plan to the administration.

In February, 2004, Mr. Ford had his staff mail a "request for proposals" to develop the steam plant, a vacant building occupying valuable space on the city's downtown waterfront, to more than 100 potential developers.

No detailed responses were received by the deadline of May 4, 2004, so the administration began discussions with individual developers, and even tried to recruit some, with the added incentive of $300,000 in city assistance.

By July 1, 2004, Mr. Ball and Mr. Jackson had formed a partnership and were in serious negotiations with the administration over the steam plant.

"The administration, Gilchrist, Carroll, were calling me every day trying to push this thing," Mr. Ball said.

City officials said they heard from Mr. Kagy about July 1, and gave him and Ray Medlin, business development manager for general contractor Lathrop Co. Inc., a tour of the building.

Mr. Medlin said he recruited Mr. Kagy.

Mr. Jackson and Mr. Ball had been given a deadline of July 16 to finalize their proposal, which they did, but the administration extended that deadline to Aug. 16 to accommodate Mr. Kagy.

They received Mr. Kagy's written financial details on Aug. 18 - the same day they decided to award the project to Mr. Ball and Mr. Jackson, according to the dates on Mr. Kagy's faxed proposal.

Ford team backs decision

In subsequent interviews and in testimony to city council, Mr. Ford and his team cited a variety of reasons for selecting the Jackson-Ball plan, including that Mr. Kagy's proposal missed the deadline, and that his proposal was not as complete as the Jackson-Ball plan.

Mr. Gilchrist said they had confidence in Mr. Ball, who has redeveloped four major downtown buildings.

Mr. Jackson is an NBA player from Toledo who started two businesses in Toledo and has investments in other parts of the country.

Cleveland architect Jonathan Sandvick is nationally known for historic renovation.

Mr. Kagy, who has developed or is developing buildings in Tiffin, Findlay, Fostoria, and West Virginia, said he told Mr. Gilchrist and Chief of Staff Jay Black, Jr., that he would develop the Water Street Station project without the $300,000 incentive that was being offered.

Mr. Kagy also said he would pay the city $500,000 when the project started making a profit.

The mayor claims that isn't true, saying "it was very clear" that Mr. Kagy expected the $300,000.

Questioned about the issue in last week's council meeting, Mr. Gilchrist did not deny hearing Mr. Kagy decline the $300,000.

But he said it was not made in writing by the deadline.

Mr. Gilchrist claimed that a line in Mr. Kagy's proposal calling for $350,000 in "equity" contribution was a reference to Mr. Kagy's expectation of receiving a city cash contribution.

Mr. Kagy denied that.

"That $350,000 is my own cash," he said.

He said he had been led to believe he was still in the running when the project was promised to Water Street Development.

"I asked Jay Black, Steve Best [former commissioner of real estate], all those guys, I said, 'I'm going to need some time. If you already have a preconceived idea, tell me.'

"They made me feel I had a fair and equal opportunity to get the project," he said.

Different proposals

In vision, the two proposals were strikingly different.

The Jackson-Ball proposal is for 111 units of upscale apartments and condominiums with 95 parking spaces inside on the ground floor.

The project is priced at $20 million, including the cost of renovating the building and constructing a new building.

Mr. Kagy's proposal was for 48 luxury residences, a fitness center, some retail, and an ice rink and water park outdoors, at a cost of $14.8 million.

Mr. Kagy has said he was "deeply disappointed" at the way he was treated. The Tiffin developer said it made him unlikely to want to venture into competition for projects in Toledo in the future.

"We had the capacity. I think the city liked the other team better," Mr. Kagy said.

Mr. Ball said huge hurdles remain in turning the 110-year-old industrial monolith into desirable residential properties.

Keeping it under budget is a big one, especially with local trade unions and backers on city council determined to make sure local workers get the construction jobs.

Mr. Ball has said he'll run the project "open book," and share all his information as the project progresses with city government and union representatives.

"I've been doing this 20 years in downtown. I'm certainly committed, and I'm fighting against a deal that may or may not be real. This is still a hard deal," Mr. Ball said.

Contact Tom Troy at:
tomtroy@theblade.com
or 419-724-6058.

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