Thursday, February 16, 2006
Posted by The Dean of Cincinnati
 Who is Ron Roberts? What is his role in The Banks project? What is his relationship with Phil Heimlich? Should someone who keeps filing for Bankruptcy have his fingers in a deal as important as The Banks? The following is a media roundup on Ron Roberts.
On February 15th, The Enquirer ran a column entitled ”Creditor for Imax now opens theater.” It outlined some of the history with the failed Imax deal in Newport, including the following excerpt:
The Imax opened at the Levee in 2001 but closed two years later, already behind on payments for its $2 million projector. Imax Corp. since has taken that projector back, and both Levee owner 3D on the Ohio LLC and its operator, Ron Roberts, have gone through bankruptcy.
Flashback to September 12th, 2003, and we find an article in the Business Courier by Dan Monk entitled ”Now showing for Imax owner Roberts: 3 bankruptcy filings.” It provides even more depth concerning Roberts’ failed business ventures with other Imax theaters:
That much is apparent from a trio of bankruptcy filings involving Ron Roberts, a former Cincinnati power broker whose US Bank Imax Theater shut down abruptly in June three months shy of its second birthday.
In addition to Roberts’ personal bankruptcy, two other filings involve business entities formed by Roberts to pursue Imax theaters in Newport and Gatlinburg, Tenn…
Roberts was executive director of the Cincinnati Business Committee, an influential CEO-level group that steered much of Cincinnati’s economic development efforts in the 1980s, and he initiated 20 years of reform efforts in the Cincinnati Public Schools.
His Imax quest began after he left the CBC in 1996. Roberts, who rarely talks to reporters, declined to comment for this story.
But his bankruptcy filings shed new light on his Imax venture, including a failed Gatlinburg theater that closed two months after its opening, after it was unable to secure a naming-rights sponsor. Bankruptcy filings list the Gatlinburg venture as having no assets and $342,527 in liabilities.
Roberts’ personal bankruptcy lists a $600,000 net loss in 2001, the year Roberts opened the Imax on the Newport riverfront and shut down his Gatlinburg theater. The filings indicate the business posted a net loss in 2002 and zero revenue in 2003.
Next, we move to another piece by Dan Monk—this time from the a May 6th, 2005 Business Courier article. Here is where things start to get interesting:
When he testified in his bankruptcy case last September, legendary Cincinnati power broker Ron Roberts was asked to describe his career.
Roberts talked about his first job as a military intelligence officer, then about the congressmen he has served, Bill Keating and Willis Gradison. He talked about his 15 years as executive director of the Cincinnati Business Committee, a CEO-only club. Though he was fired from that role in 1996, for years he wielded tremendous influence on downtown development and Cincinnati’s public school system. Finally Roberts testified about his Imax theater in Newport, which failed in 2003 and remains an empty shell.
“My one and only chance at business was with the Imax of which I’m now bankrupt,” Roberts told Judge J. Vincent Aug. “I think I should have stayed in politics.”
Eight months later, Roberts has gotten his wish. Hamilton County’s Republican commissioners, Pat DeWine and Phil Heimlich, hired Roberts in February to lead their massive new reform initiative. Under a $145,000-per-year, no-bid contract, Roberts is organizing four commissions that will scrutinize county spending and try to boost its economic-development potential. The reform effort is still in its infancy, but its impact could be huge. Ideas already under study include merging local government services, outsourcing county jobs, ramping up development in western Hamilton County and shaking up the system for putting property tax levies before voters.
Why would Phil Heilmich install Ron Roberts into a position to work in an economic capacity, after the kinds of bankruptcy with which he has been involved? And what about that last sentence above? Why does the system need to be shaken up when it comes to property tax levies?
Perhaps an answer to that last question can be found later in the same column by Dan Monk:
Another old friend, Chris Finney, local real estate attorney who is active in conservative politics, helped Roberts settle a dispute over retirement assets. Roberts financed the Imax with a Key Bank loan, which the bank later sold to an investor, an affiliate of Capital Crossing Bank. Roberts and the bank battled in court over whether Roberts’ retirement accounts were pledged as collateral. The dispute was on appeal when the April settlement was reached.
To accommodate the deal, Finney agreed to wave his rights to any cash proceeds from the sale of Roberts’ retirement investments. Because he was an unsecured creditor, Finney said his $35,000 claim would have been worth only pennies on the dollar.
In addition to being a local real estate attorney, Chris Finney has been an active partner with Phil Heimlich in a real estate investment company known as The Three Centurions. (Recently, this LLC was transfered to their wives.) Dan Monk failed to mention this tidbit, but it puts an even more questionable spin on this Roberts guy. This sounds like back-room dealings and cronyism at its worst. More from Monk’s May 6th, 2005 article:
Portune, who voted against Roberts’ hiring, said county government now functions with the “gamesmanship” he witnessed “during the worst of times” at City Hall. Portune also criticized “financial entanglements” between Roberts and the commissioners who hired him.
He said Heimlich should have disclosed prior to voting on Roberts’ contract that he employed Roberts as a consultant last year. He pointed to business ties both Heimlich and Roberts have with Finney, who chairs the county’s tax levy review committee and recently was appointed to the board at Drake Center Inc., a major target of Heimlich’s reform efforts. Roberts also has business ties to the Keating Muething & Klekamp law firm, where DeWine works as an attorney.
Members of the reform initiative’s economic-development task force contributed $27,000 to the Heimlich and DeWine campaigns last year. One task force member, Laurie Malone, worked for Roberts in 2003, handling public relations and marketing the Imax site to potential buyers.
Heimlich, Finney and DeWine all see no problems in the relationships. Portune disagrees.
“Phil and Pat voted to put these guys where they are and failed to disclose the intimate financial relationships that they have with these guys,” Portune said. “I think that taints the whole process.”
These missing disclosures might not be technically illegal in terms of official ethics procedure, but it sure smacks of unethical behavior and secretive influence peddling. The story looks clear to anyone who pieces the parts together.
To what degree, therefore, has Phil Heimlich sacrificed the integrity of deals like The Banks by inserting his bankrupt buddy Ron Roberts into an influential position, having his good friend Chris Finney provide Roberts with legal advice—only to find out that Roberts is pushing for real estate initiatives that would benefit investment ventures like The Three Centurions?
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