This is what corporate America is all about:
Western & Southern executives, whose headquarters sit across a park from the Anna Louise, offered to buy the Anna Louise for $1.8 million several years ago, less than half its value. The Anna Louise declined and won $12.6 million in federal and state tax credits to renovate the home, where some rooms are smaller than 100 square feet and all the women have to share bathrooms and one kitchen.
Days before the renovation was to begin, Western & Southern sued over a zoning issue and a judge ordered an immediate construction halt until the legal fight was resolved. The Anna Louise and its supporters didn’t back down, vowing to fight Western & Southern with everything they had — until last week when they inked a deal with the company to sell the home for $4 million.
This sounds bad, but it’s even worse:
Letters acquired by CityBeat show Western & Southern playing hardball with Cincinnati Union Bethel from 2005-09 when CUB was considering selling the building because it needed expensive renovations. The final Western & Southern offer was made in 2009 for $1.8 million, just $50,000 more than its first offer back in 2007. The property in 2011 was valued at $4 million by the Hamilton County auditor.
In a letter dated Dec. 1, 2008, Eagle Realty President Mario San Marco offered $1.8 million for the Anna Louise Inn. Eagle Realty is the real estate arm of Western & Southern. Cincinnati Union Bethel President & CEO Stephen MacConnell responded two months later with a counter offer involving the $1.8 million plus a combination of other contributions that would total $3 million in value. MacConnell suggested Western & Southern include things like endowment contributions, office space and moving expenses.
But Western & Southern didn’t take the offer. Six months later, San Marco wrote MacConnell a letter saying Eagle Realty couldn’t raise its offer higher than $1.8 million because of “challenges and complexities of development in our (Central Business District).”
It was about one year later, July of 2010, when Cincinnati Union Bethel won state-distributed federal funding to renovate the building. And it was around this time that Western & Southern realized it had blown its chance to acquire a property it wanted much more than San Marco let on.
The property was clearly worth the $3 million MacConnell was trying to get, because Western & Southern soon offered that much or the higher of two independent appraisals for it.
But the Anna Louise Inn was no longer on the market thanks to $10 million in tax-credit financing from the Ohio Housing Finance Agency. It later secured a $2.6 million loan funded by the U.S. Department of Housing and Urban Development that was awarded by the city. These pieces of federal funding are set aside for historical renovations and affordable housing.
According to Cincinnati Union Bethel’s records, Western & Southern from 2007-09 donated $1,000 four different times to the Anna Louise Inn’s Off the Streets program, which helps women involved in prostitution turn their lives around. Back in 2005 Western & Southern donated $5,000 to Cincinnati Union Bethel to celebrate the organization’s 175th anniversary. By 2010 Western & Southern had apparently run out of giant checks to pose with.
But that’s not to say the corporation was without interest in the Anna Louise Inn’s programs — it just thought they were really bad now. One month after CUB got the $10 million loan, Anita Collins Purnell, Eagle Realty assistant vice president and director of multi-family management, wrote a letter to neighbors in the Lytle Park district on Eagle Realty letterhead describing Cincinnati Union Bethel’s renovation plan.
City Council approved Cincinnati Union Bethel’s development agreement, but that didn’t mean the Anna Louise Inn was home free. Western & Southern filed a lawsuit on May 27, 2011, five days before the Inn’s scheduled renovation, claiming the building was improperly zoned. The lawsuit, against the Anna Louise Inn and city of Cincinnati, froze both the state- and city-distributed federal loans and put the renovation on hold indefinitely.
So Western and Southern made a lowball offer because they thought the charity had no other option (making a profit of desperate people is the American way). When the charity suddenly had another option, Western and Southern went into overdrive: using their influence to change things, filing a series of lawsuits to delay the project knowing that the charity wouldn’t be able to afford long delays, and maligning the women who stayed at the Inn. And they won, as big money usually does. John Barrett doesn’t think anyone cares:
W&S is now dusting off plans to transform southeast Downtown after riding out what it knew would be a PR challenge. The Anna Louise Inn currently offers living space for about 75 low-income women; W&S earned $280.6 million in 2011 on $2.9 billion of revenue and was viewed by critics as something of a bully.
“This will all work out,” Barrett said in an exclusive Enquirer interview. “Nobody will remember the consternation, and they’ll all say, ‘Wow.’ ”