Is the city of Lakewood’s agreement to sell the former hospital site located at the southeast corner of Belle Avenue and Detroit Avenue to Carnegie Management & Development Corporation legal and in accordance with the requirements of the Ohio Constitution, the Ohio Revised Code and the Lakewood Third Amended Charter and Lakewood Codified Ordinances?
Yes. Lakewood Ordinance 27-18 was adopted and approved by the city on May 8, 2018 and the Letter of Intent and Development & Use Agreement subsequently entered into by the city of Lakewood and Carnegie Management & Development Corporation were legal and in accordance with the procedures set forth in the Ohio Constitution, the Ohio Revised Code, the city of Lakewood Third Amended Charter and the Lakewood Codified Ordinances. All provisions of Chapters 111 and 155 of the Lakewood Codified Ordinances, including but not limited to Sections 111.04 and 155.07, with respect to contracts for the purchase, sale or lease of city-owned property were met by Ordinance 27-18.
Why wasn’t the city required to comply with Ohio Revised Code Chapter 721 and advertise the sale of the ‘hospital property’ at Belle Avenue and Detroit Avenue in a newspaper for five consecutive weeks followed by a sale of the property to the highest bidder?
The city was not required to advertise the hospital property for sale in accordance with Ohio Revised Code Chapter 721 because municipalities, such as Lakewood, have been given home-rule powers in Article XVIII, Section 3 of the Ohio Constitution and have been granted the opportunity to develop their own processes for the sale of property under the authority of their own municipal charters. In many cases, it makes little sense to advertise a property and offer it according to the Revised Code’s customary provisions because properties like the hospital property come with a great deal of complexity (asbestos abatement, demolition costs, what the community envisions for expected future use of the property, and the ability for any buyer to deliver on those expectations, among many other considerations).
Why didn’t the city decide to advertise the property in a newspaper?
The development of a property of this size and complexity, with an existing hospital building onsite and with such a transformative objective in mind, did not merit simply advertising the property and selling it to a bidder. The city underwent a lengthy, detailed process (described more fully here and here) that resulted in a developer being selected who could meet all of the objectives.
Bids are only appropriate when a fixed product is clearly identified. In the case of a large commercial development such as this, the final product would ultimately be determined by a combination of developer vision, marketplace acceptance, and practical realities of building something new and unique. Consequently, the city sought a partner to work through all of these uncertainties. A request for proposal was issued. Seven developer teams responded, and the process narrowed it to two candidates by an experienced and expert group of volunteer citizens accustomed to working with developers on major land-use projects such as this. Additional information was solicited from the two finalists. One was ultimately selected on the basis of experience, financial strength, commitment, corporate culture, approach to risk and design vision for the project. All these steps, rather than a simple advertisement in the newspaper, were required to ensure the best possible outcome for Lakewood.
When did the city of Lakewood adopt its first charter?
In 1913, the city of Lakewood was one of five municipalities, along with Cleveland, Dayton, Middletown and Springfield, to become a chartered one year after the Ohio Constitution, Article XVIII was adopted in 1912. Municipal charters must be approved by a vote of the majority of those voting.
What are ‘home rule’ powers?
According to the Ohio Constitution Article XVIII, Section 3, established in 1912, municipalities have the authority to exercise all powers of local self-government, and to adopt and enforce within their limits such local police, sanitary and other similar regulations, so long as they are not in conflict with general laws. Powers of local self-government are procedural powers of self-government that relate to structure and form of government and procedures – or, how government operates. These powers include the power to buy and sell property on terms approved by city council.
How does a municipal government obtain ‘home rule’ powers?
A municipality was granted home-rule powers in Article XVIII, Section 3 of the Ohio Constitution. Article XVIII, Section 7 grants that any municipality may frame and adopt or amend a charter for its government and may exercise all powers of local self-government. Thus, the municipal charter is essentially the constitution for the municipality.
Has the city of Lakewood amended its charter since first being adopted in 1913?
Yes. The city of Lakewood has amended its charter many times over the years, and has made large-scale amendments in 1985, 2000 and most recently 2017, when the Third Amended Charter was adopted by the voters.