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Feb

10

Med Mart operators want profit assurance before commitment


What a surprise, I know.

From the Plain Dealer:

MMPI needs to know it can make money before proceeding, company Senior Vice President Mark Falanga said recently. And since business for the three main components of the project — a Medical Mart, trade show hall and conference center — will be intertwined, one manager makes sense, he said.

“We’re a for-profit company, so our interest is in making money off the management of this facility,” he said. “But the money we hope to make in managing this would be very small and is going to be outweighed by the benefits to the community.”

The company can’t realistically depend on profit from the center to sweeten the deal, Falanga said, since most convention centers don’t make money.

Now, I’ve read and heard some more or less nice things about the sincerity of the MMPI folks.  But they’re a business, not an NGO.  So what is this mixed message about not proceeding unless they know they can make money, but they know that the amount of money that they’re going to make is very small and will be outweighted by the benefits to the community.

Does that make sense to you? Doesn’t make sense to me.  Sounds like this deal is a goner.

But read the entire article – it’s lengthy but without any final answers.

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By Jill Miller Zimon at 9:49 pm February 10th, 2008 in Business, Cleveland+, Government, Ohio, Politics 

Comments

8 Responses to “Med Mart operators want profit assurance before commitment”

  1. 1 Anon on February 10th, 2008 11:38 pm

    So what is this mixed message about not proceeding unless they know they can make money, but they know that the amount of money that they’re going to make is very small and will be outweighted by the benefits to the community.

    Does that make sense to you? Doesn’t make sense to me. Sounds like this deal is a goner.

    Working from memory, I believe Chris Kennedy in his presentations last summer said that MMPI wanted to manage the convention center. Even if MMPI makes little money, management of a Cleveland convention center would open a new line of business for MMPI and give the company some street cred in competing with the likes of SMG, discussed in the PD article.

    If Cuyahoga County decides to hire a company to manage its convention center, I’d like to see an open bidding process to ensure at least some transparency.

  2. 2 Jill Miller Zimon on February 11th, 2008 9:22 am

    Anon – you wrote, “If Cuyahoga County decides to hire a company to manage its convention center, I’d like to see an open bidding process to ensure at least some transparency.”

    But isn’t that exactly what seems to be ruled out by MMPI’s assertions?

  3. 3 Anon on February 11th, 2008 8:06 pm

    But isn’t that exactly what seems to be ruled out by MMPI’s assertions?

    I’m not sure which assertions you’re referencing. Mr. Falanga does not assert, for example, that MMPI will cancel the med mart if it can’t manage the convention center.

    As noted above, “The company can’t realistically depend on profit from [managing] the center to sweeten the deal, Falanga said, since most convention centers don’t make money.” Just because MMPI doesn’t think it can make a profit managing a convention center (which it’s never done before) does not mean someone else–such as SMG–can’t. Or, that a company other than MMPI could provide a better deal to the county. Such a (possible) better deal would only be revealed, I think, by competitive bids.

  4. 4 Jill Miller Zimon on February 11th, 2008 8:20 pm

    Well – here’s part of the PD piece:

    “The Chicago-based company hoping to open a Medical Mart in Cleveland also wants a contract to run the proposed new convention center, a factor that will be key to closing any deal.

    “They want to do everything from soup to nuts — build it, lease it out, manage the development,” said Fred Nance, who’s negotiating with Merchandise Mart Properties Inc. on the county’s behalf.

    So, Anon – that’s where I got the idea that MMPI might walk if they can’t do it all. Could be a wrong assumption.

  5. 5 Anon on February 11th, 2008 9:07 pm

    So, Anon – that’s where I got the idea that MMPI might walk if they can’t do it all. Could be a wrong assumption.

    I think you’re making a reasonable reading of “a factor that will be key to closing any deal.” (I didn’t initially read that as an “MMPI assertion,” but I do think yours is a reasonable reading.)

    Chris Kennedy’s presentations last summer did not seem to make the med mart contingent on a convention center management contract. If MMPI walks now because they don’t get a convention center management contract, I’m going to wonder about MMPI’s true motives last summer. (OK, I’ve been wondering about MMPI’s motives all along.)

    FWIW, I don’t think that Commissioners Hagan and Dimora are going to let MMPI walk. They already have egg on their faces from the county administration building fiasco and won’t want a second helping.

  6. 6 Jill Miller Zimon on February 11th, 2008 9:57 pm

    I agree – we would think that the commissioners have a lot to lose if it falls through but then, how often do we say that and they keep staying on in positions of power? :) Just a little cynicism.

  7. 7 King on February 28th, 2008 6:10 am

    Cynicism? From you? Oh My! :) LOL

    Jill only kidding. PLJ just announced he feels a tax break of some sort should be given if it falls through. Tax break to who? US! I’m sure this idea will have Dimora and the Mouth (Hollywood Husband Hagan) thrilled spitless.

  8. 8 Jill on February 28th, 2008 8:25 am

    Thanks for the update, King.

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