Saturday, October 23, 2004

A Tale of Two Cities:2


In Revere, Massachusetts, where I grew up, the Mafia was the group you had to worry about. In Portsmouth it’s the Chamber-of-Commerce and Southern-Ohio-Growth-Partnership types, the over-privileged people, a number of whom live on the Hill. Yes, there was more crime and corruption in my hometown than in Portsmouth, but Portsmouth has more of one thing than any town I’ve lived in – what could be called legal, or country-club, corruption. In Portsmouth, the over-privileged don’t have to bilk the public; they simply have to bill them, and some foundation or “non-profit” organization, will tap in into local, state, or/and federal sources to find the money to pay the bill. One local “non-profit” corporation that has apparently tapped into public funds for real-estate payoffs is Portsmouth Murals, Inc.

In addition to attracting a steady trickle of tourists and funneling a few scarce dollars into Portsmouth’s depressed downtown neighborhood, Portsmouth Murals, Inc. also provided an influential member of Portsmouth’s ruling clique, George Clayton, with the opportunity of unloading five parcels of property in the same depressed downtown neighborhood, including the empty store of his failed Kenrick’s business. Just as Mayor Bauer and the Portsmouth city council used public funds to bail out the Marting’s Foundation by buying the empty Marting’s department store for $2,000,000, Portsmouth Murals, Inc. bailed out Clayton by buying the Kenrick building and adjoining properties for $350,000. These properties have very little commercial value, and the empty store was likely to stand idle for years, so public funds had to somehow be tapped into to take these distressed properties off his hands. Historic structures like the Norfolk & Western terminal and a number of elegant older homes near the university have been demolished, while buildings like Marting’s and Kenrick’s, which have even less historic and architectural worth than they do commercial value, are re-cycled with public monies to bail out the over-privileged who own them. Was it just a coincidence that George Clayton was bailed out by a publicly funded, not-for-profit corporation, Portsmouth Murals, Inc., that he himself was one of the founders of? Wasn’t George Clayton involved in a similar conflict of interest similar to that of his relative Clayton Johnson in connection with the Marting’s purchase?

In an article I published in 2002, “House Shenanigans,” I wrote about several sweetheart real-estate deals for and by the over-privileged people on the Hill, and of a particular deal that George Clayton was directly responsible for when he was chairman of the board of trustees of Shawnee State. A doctor who lived just a golf putt away from Clayton’s home on the Hill was leaving town and reportedly having trouble selling his house. Sounds like a situation in which the doctor might have to sell at a loss, right? Wrong. Just as the city came to the rescue of the Marting’s Foundation, just as Portsmouth Murals, Inc. came to the rescue of George Clayton, Shawnee State University with George Clayton in the negotiating seat came to the rescue of the doctor on the Hill, paying him $412,000, for his house on Camelot Drive, a house that had been appraised for $365,140 in 2001, and he would have been lucky to find a buyer at the figure. Isn’t there a pattern here in which the over-privileged of Portsmouth, in danger of taking a loss on real estate, are bailed out by publicly funded institutions and organizations?

According to the Portsmouth Daily Times, Representative Rob Portman recently deposited a check for $300,000 in federal money into the account of Portsmouth Murals, Inc., bringing to a total of $1.2 million the public money that has been allocated for the renovation of the former Clayton property. It is ironic that businesses that go bust in downown Portsmouth manage to unload upon the public property that no other business would want. If you are a member of Portsmouth’s over-privileged and have a white elephant house or vacant store, be patient. The city, state, or federal government will bail you out. It remains to be seen how much Portsmouth Murals, Inc. is going to cost the public in the years ahead, and it will probably all be legal.