Posted by Michael Earl Patton

“The Genius of Bill Donabedian” courtesy of here.

As reported earlier in The Cincinnati Beacon, the city agreed to pay all the construction costs for what became the Via Vite restaurant building.  The Beacon has further examined the deal and it appears that the city’s commitment to fund the restaurant is written in such a way that they cannot wiggle out of it.

Via Vite is an expensive restaurant built mostly on public land in Fountain Square.  Both before and after publishing the article, the Beacon asked public officials for comment.  Little was received in response, which basically was that the city did agree to cover the costs but it doesn’t matter since the intent was to have 3CDC pay for it anyways.  The latest response will be discussed in more detail later.

Certainly the deal for the city to pay for the restaurant was hidden.  It was buried in a tangle of verbiage.  Here’s are some of the relevant points:

1. The city, in its lease with Fifth Third , agreed to pay for the construction of the restaurant building on Fountain Square (par. 8.1 (c)).  Note: I’ve been having trouble with this link recently and have been working off of a paper copy of the actual signed lease.

2. The same lease states that the city cannot get anyone else to take over that responsibility without the express written consent from Fifth Third.  Any attempt, even by ordinance, to do so without Fifth Third’s permission is “null and void ab initio” (par. 12.1).

3. The same lease states that even if Fifth Third were to give their permission, the city has to come through with the money if the other party defaults (par. 12.1).

4. The lease states that the building can be mortgaged for up to 30 years (par. 13.1(a)).

5. The city did sign an agreement with 3CDC (through their subsidiary Fountain Square, LLC) where they take over the responsibility to pay for the restaurant.  In return they acknowledge receipt of “good and valuable consideration” from the city.  So what, exactly, did they get from the City?  It is not stated and it is unknown, but they do acknowledge that it is “sufficient.” It doesn’t have to have been cash.

6. If a token amount—say, a dollar—were given, then one has to wonder why this amount wasn’t stated in the agreement.  As it is written it is wide open.

7. Even if just a token amount was given to 3CDC for them to take over the responsibility to pay for the restaurant, the city is on the hook if 3CDC took out a mortgage and then defaults.

8. The rent from the building would not be sufficient to pay the mortgage unless the restaurant did an extremely good business.

9. There are at least two more documents to ask for.  One is the written consent from Fifth Third and the other would state whatever this “good and valuable consideration” actually is.

So the city is on the hook for the restaurant.  Maybe it hasn’t paid anything yet, maybe it paid just a little so far, maybe a lot, maybe it paid something other than cash, but it is responsible for paying for it.

Meg Olberding, the assistant to the City Manager and Public Information Officer, wrote that the ordinance approving the agreement states the city intended to assign the responsibility to pay for the restaurant to Fountain Square, LLC (wholly owned by 3CDC).  Because the city so stated its intent, it is therefore not responsible regardless of the contract language.

Frankly, I disagree.  Even without the points discussed above, I disagree.  A contract is an agreement between at least two parties.  In this case it was between the city and Fifth Third.  3CDC was not included.  Council gave authority to the city manager to sign the contract as it was written. The ordinance language only shows what the city was planning to do with its responsibilities AFTER the contract was written and is certainly not binding on Fifth Third or 3CDC.

And the language of the ordinance itself doesn’t say anything about the city intending to have 3CDC pay for the restaurant.  Instead it says, “WHEREAS, the City of Cincinnati wishes to lease the Property for assignment to Fountain Square, LLC, to use in the construction of a restaurant on Fountain Square; ... “ Note that it says the intent is for 3CDC (through its subsidiary, Fountain Square, LLC) to use the land for construction of the restaurant, not to take over the responsibility for paying for the restaurant.

So the city, and thereby its taxpayers, is responsible for paying for the brand-new luxury restaurant on Fountain Square, built on public land, though a deal that was hidden from the public.

Thank you for reading (and printing from) The Cincinnati Beacon.