CH should not fund Russos' remodel

In January an opinion in the Heights Observer praised Sal Russo as a landlord and member of the community, and stated he would be bringing a new grocer to Cedar Fairmount. In February, Mr. Russo announced Grocery Outlet Bargain Market as Dave’s replacement at a city council meeting. In March he hosted a meeting for the neighborhood, to introduce Grocery Outlet. He stated then that a city subsidy of $1 million would be required to make necessary repairs to the building, to lease the space to Grocery Outlet. When asked if he could apply for a loan, he did not respond. He asked the meeting attendees to engage in a letter-writing campaign to members of city council to [support funding] the remodeling.

I believe that, as owner and landlord of the Cedar Grandview building, he is responsible for its maintenance and repairs. I do not think it is fair that taxpayers be asked to fund its remodeling to meet the needs of a prospective tenant. 

Sal Russo stated he tried 19 times to find a grocery tenant for Cedar and Fairmount. He said his efforts were unsuccessful because the rental unit needs to be remodeled to support a grocery store.

It is my opinion that the opening of Fairfax Market is fierce completion to any supermarket considering replacing Dave’s. Perhaps this is the reason why Dave’s literally fled to Lee Road. They watched a 40,000-square-foot grocery being built less than 1.5 miles from their 20,000-square-foot Cedar Fairmount store [and probably wondered,] could their store compete? Fairfax Market opened in January, and is currently the closest grocery store to Cedar Fairmount.

City Council financed Top of the Hill (TOH) with TIPS (Treasury Inflation-Protected Securities). Through TIPS, a city provides funding to a developer by waiving future tax dollars. If The Ascent at TOH fails, the developers will assume the loss. Residents will not lose any money on the investment.

When government acts as an unregulated bank and funds private business directly with a grant funded by taxpayers, however, and that business fails, we lose our investment. This will happen if Grocery Outlet is unable to make a profit and decides to close its doors. Mr. Russo, however, gets to keep his $1 million remodel.

Russo stated he was forced to reduce his rent by half more than a decade ago to get a grocery tenant for his building. He is currently advertising the lease for the vacated Dave’s store for nearly $400,000/year on commercial real-estate site LoopNet. He may have to [reduce the rent] again. He will get a tenant, but the free market will determine the value of his property without the help of the residents of Cleveland Heights.

I was surprised to get an e-mail from the Cedar Fairmount Special Improvement District implying member retailers of the organization support the initiative. The mailing did not indicate Russo is president of the organization.

Taxpayers of [the Noble neighborhood] recently contributed tax dollars to building TOH. Are we going to ask them again to fund the most successful business district in Cleveland Heights? Grocery Outlet will not replace a traditional grocery store, but it will solve the balance sheet problem of the Russos.