WHO IS THE NORTHEAST OHIO DEVELOPMENT FUND AND WHY ARE THEY IN CHARGE OF $47 MILLION IN PORT AUTHORITY SUBSIDIES?

So yesterday I called the Port of Cleveland and asked to speak to someone about the $32 million in Federal "New Markets Tax Credit" financing that's reportedly planned for Steelyard Commons. Specifically, I wanted to know whether the Port Authority Board, a public body appointed by the City and County, had already approved this heavy public subsidy, or if it was on some future meeting agenda.

I was given to Lynda Sudderberg, the Port's Chief Financial Officer. In answer to my question, Sudderberg said no, the Port Board isn't involved in the decision to give New Markets financing to the Steelyard project -- that's up to the Northeast Ohio Development Fund, a "limited liability corporation" to which the Port assigned its $47 million in New Markets credits a year ago. Does the NODF have a public board, I asked. Yes, Sudderberg responded, there's a board -- she thinks it consists of four Port Board members and three representatives of Cohen and Company, the Port's partner in the Fund -- but she's not sure they have public meetings. She'd have to talk with the Port's general counsel and call me back.

A few minutes later Sudderberg did call back and left this message on my voice mail: She had spoken to the Port's counsel, Dennis Wilcox, who said that as a private for-profit limited liability corporation, NODF is "not subject to public records or open records or sunshine laws." It is supported by the proceeds of its tax credit transactions.

Are you getting this? The Port Authority, a public agency, sought an allocation of Federal tax credits to subsidize economic development projects in low income areas of the county. To administer these credits, it set up a private for-profit corporation in partnership with Cohen and Company, a private accounting firm. The $47 million worth of Federal tax credits received by the Port are completely under the control of this new private entity, which has no obligation to conduct its business in public -- even though it was created by the Port, a public agency, and a majority of its corporate board seats may be occupied by Port Board members (presumably acting in that capacity).

And this private -- you could say, secretive -- corporation has the authority to channel $32 million in publicly subsidized financing to Steelyard Commons, subject to zero public process, review or disclosure!

The address listed for the NODF in documents on the "New Markets" website is the Cohen and Company office at 1350 Euclid Avenue, Suite 800. The contact person listed is Radhika Reddy, formerly the CEO of "Cohen International, LLC" but now with something called "Ariel Ventures, LLC". Whether Ms. Reddy is still involved with NODF is unclear to me. What is clear that Cohen and Company is running the show, even though the Port Authority is legally the Fund's "controlling entity".

The role in the New Markets process played by the Northeast Ohio Development Fund is that of a "Community Development Entity", or CDE. A New Markets CDE must meet a number of requirements, including "accountability to the low income community it serves" through members of its board or advisory committee. How does the NODF purport to meet those requirements? How does a massive shopping mall owned by suburban investors on an isolated former steel mill site qualify as "low income community development"?

And how does a public agency like the Port Authority get away with creating and "controlling" an operation like the NODF without taking public responsibility for its actions?

Many, many questions. Stay tuned.