It is profitable to be a politically connected developer in Medina County. The more than $48 million in public bonds, tax breaks and other giveaways to the developer of the Legacy Hotel in downtown Medina is an example of how County politicians shovel money to their friends at the expense of the rest of us.

The massive giveaways of taxpayer money by the Medina County Commissioners to Republican political insiders is a major issue in the upcoming November Election in which a majority of the Commissioners may be replaced by Democrats who have vowed to put an end to these practices.

How The County Keeps These Deals Hidden From The Public

A lot has been written about the Legacy Hotel that is being built in downtown Medina. However, none of the news reports detail how taxpayers are paying for it.

Medina County recently disclosed some documents in response to public records requests. While the County stonewalled and did not provide many of the documents requested, the documents that were disclosed show how more than $48 million in various public taxpayer funds are being used to pay for the developer’s private moneymaking venture.

The Legacy Hotel Project

The Medina Legacy Hotel project is a 75-room luxury hotel and event center. It is being built within one block of the Public Square in downtown Medina. Several buildings were demolished to make room for the project, and the official groundbreaking was held on July 26, 2024.

The developer of the Legacy Hotel project is a company formed by Jason Stephenson. Stephenson is a former Republican candidate for County Commissioner. He is also an owner of several other businesses. Numerous other investors are also involved.

The Medina County Port Authority

Many people are surprised to learn that Medina County has a Port Authority. The Port Authority is authorized to sell bonds to borrow money for public projects. The Port Authority is run by a Board appointed by the Medina County Commissioners. The Chairman of the Board is former Medina County Commissioner, Republican Adam Friedrick. The hand-picked members of the Board include numerous developers including Mark Dorman, who is one of the investors in the Legacy Hotel Project.

How The Public Is Paying For The Legacy Hotel

The developer owns the real estate parcel on which the Legacy Hotel is being built. The property was leased to the Port Authority for a period of 23 years. The Port Authority paid $1 for this 23-year lease. Because of the lease to the Port Authority, this property (and the hotel) became “port authority property” on which no real estate taxes are collected.

The Port Authority then leased the parcel on which the hotel is being built, back to the developer. This maintains the tax-free status of the property for the developer. This maneuver results in the developer not paying over $9.4 million in property taxes (at current tax rates) over the life of the lease. This drains money from the tax base, including taking money away from the Medina City schools.

Public Bonds Worth $18 Million Plus A $15.75 Million Sales Tax Giveaway

The Port Authority is issuing $18 million in public bonds. The money from the sale of the bonds goes to the developer.

The Port Authority has hired the developer as its agent with blanket authority to build the hotel. Because the developer is a private business, the usual requirements associated with a government project do not have to be met. These include safeguards that make sure the public gets its money’s worth, such as making sure construction contractors are qualified, engaging in competitive bidding, paying prevailing wage to workers, making sure that managers, consultants and architects are not paid excessive fees, and other requirements.

According to the County documents that were provided, no one at the Port Authority or in County Government has responsibility to oversee how the money generated by the public bonds is spent. The developer is in total control of the public bond money.

However, because the hotel project is a government project (being built by the Port Authority), no sales taxes will be paid on any of the building materials or services used in the construction. As a result, the developer pays less for all aspects of the project. Assuming that 70% of the building cost is materials, this amounts to a further $15.75 million giveaway to the developer. Of course, while the developer gets to build the hotel tax-free, the schools, the City, the County and the State that would otherwise receive tax revenue, receive nothing.

An Additional $4.75 Million In Clean Energy Bonds

The Medina Port Authority also “invited” the Development Finance Authority of Summit County to issue $4.5 million in property assessed clean energy bonds (PACE bonds) to further help pay for the hotel project. PACE bonds are supposed to be issued to help businesses, nonprofits and governments pay for improvements to reduce energy consumption.

The provided documents related to the Legacy Hotel project do not require the developer to use any energy saving technology. This is another giveaway with no strings attached.

An Additional $1 Million From A Brownfield Grant

The Medina Port Authority also gave the developer a $1 million Brownfield grant. This was done despite the fact that there is nothing that suggests that there is any environmental contamination at the hotel site.

A Free 60 Car Parking Lot

The City of Medina has a downtown parking problem and has paid a lot of money to consultants to suggest solutions. However Medina’s Republican Mayor recently signed a deed to eventually give the hotel developer at no cost, a City owned parking lot suitable for parking at least 60 cars.

The value of this City owned parking lot that is being given away for $0 to the developer, was not disclosed. However, the parking lot is directly across the street from the parcel on which the hotel is being built, which the developer values at $1.7 million.

In The End The Developer Gets The Hotel For $1

Once the hotel is built and operating, the developer is supposed to make payments to the Port Authority, which passes the money to the purchasers of the bonds.

Once the bonds are paid off the hotel is transferred to the developer for $1.

The developer is free even before the bonds are paid off to sublease the hotel to anyone that the developer chooses. As a result the hotel could end up as part of a hotel chain, a private resort or other type business. Once the developer has purchased the hotel for $1, the developer is free to sell the hotel that was built with public money as well as the former City parking lot and keep all profits.

What Is The Benefit To Taxpayers?

The taxpayers of Medina County receive no benefit from $48 million in public funds being spent on the Legacy Hotel project.

Medical office buildings and an auto parts store with employees who received a living wage were torn down to make room for the hotel. In their place will be mostly minimum wage and part-time jobs for housekeepers and food workers at the hotel. Published guidelines for hotel staffing suggest that there may be fewer full-time equivalent workers at the hotel than worked at the prior businesses located on the site. None of the documents provided by the County contain any commitments by the developer as to the number of employees or the total payroll of the hotel.

The proponents of the hotel project say that it will bring more people to downtown Medina who will spend money at the hotel (to further enrich the developer) and perhaps spend money at other downtown businesses. However residents and local workers who have to travel through downtown are already frequently facing traffic gridlock, particularly on the weekends, and giving away the public parking lot to the developer is going to make it harder to find a place to park.

As a result of the public bonds, giveaways and tax-free treatment, the politically connected developer and investors get a massive financial benefit, at the expense of the taxpayers of Medina County.

Replace The Republican County Commissioners To End Giveaways

Medina County has three (3) County Commissioners. All of them are Republicans who support the Legacy Hotel project. Two (2) of them are up for re-election in November.

The Democratic Commissioner candidates, Pauline Chapman and Pat Walker, have pledged that if elected they will stop giveaways of public money to politically connected developers. Chapman and Walker believe in the free enterprise system, not welfare for millionaires.

The voters of Medina County have a chance in November to end sweetheart deals like the Legacy Hotel, and have taxpayer money used to benefit the citizens instead of politically connected developers.