Follow The Republic:
It’s been about a month since the first city officials learned Snappy Tomato Pizza in The Commons had not paid rent for a year and owed $27,238 in back rent, utilities and penalties.
In the wake of that revelation:
Blame has been pushed in multiple directions by individuals and groups.
The city’s parks department director has been reassigned.
Confusion has reigned about who was responsible for The Commons restaurant leases and how to track them.
This embarrassing situation for the city has shown that its financial controls for The Commons have been inadequate, that communication between departments about responsibilities and procedures has been poor and that a clearly defined and commonly understood financial oversight system needs to be implemented.
Columbus Mayor Kristen Brown placed the blame solely on Ben Wagner, whom she demoted from parks director to the department’s marketing coordinator.
However, this financial fiasco is not the failure of one individual.
Commons restaurants used to pay rent to Columbus Downtown Inc., the former nonprofit arm of the Columbus Redevelopment Commission that had been in charge of The Commons. That changed when the mayor — who ultimately is in charge of all city matters — dissolved CDI and shifted its duties to the public redevelopment commission to make dealings transparent.
In turn, the commission passed a resolution dated Dec. 17, 2012, that reassigned collection of all income and utility payments from Commons retail tenants to the Columbus Parks and Recreation Department for 2013.
However, there is no documentation indicating the parks board was notified the department was expected to collect money from Commons retail tenants, and the park board never voted on accepting those responsibilities.
The revised leases the restaurants signed just more than a year ago, where lease responsibility was transferred from CDI to the redevelopment commission, directed tenants to make payments to The Commons Board by way of City Hall.
Two of the three active tenants — all but Snappy Tomato — paid according to that directive, which left a parks department employee in The Commons office responsible for collecting the rent payments.
Unfortunately, Clerk-Treasurer Luann Welmer, the city’s chief financial officer, never was consulted about procedures to handle the funds.
That left parks department employees who assumed responsibility for collecting and depositing payments to do so without sufficient guidance.
Ultimately that proved disastrous because no physical checklists were kept of which businesses had paid, and the parks department didn’t have software capable of tracking whether payments had been received from each of the restaurants.
The parks board, redevelopment commission and city administration looked only at the overall income figures from Commons revenues, not the sources of income. Higher-than-expected revenues from meeting and performance space rentals masked that Snappy Tomato Pizza had not been making $1,500 monthly payments.
While the missteps in collection are a serious problem, the lack of forthrightness by Snappy Tomato’s owner, Larken & Co. LLC, to inform city officials about its financial problems and inability to pay its rent is unethical and inexcusable.
A Tuesday deadline for the restaurant to make good on its debt was missed, and communications between the attorney for owner Tim Larken and the city redevelopment commission have not been shared with the public.
One who signs a lease has an obligation to inform the landlord if there could be a problem in making a payment. Doing so addresses a problem in the early stages and gives both sides an opportunity to work out a solution.
That didn’t happen, and now the city is dealing with a huge mess.
City officials have recommended new controls for the collection and handling of payments from The Commons restaurants. Standard billing and collection procedures are universally practiced by businesses and governments everywhere.
The idea of having to create new systems in the city of Columbus is puzzling. The city’s clerk-treasurer knows how accounting works and should have been consulted a year ago on steps to be taken to record the lease payments.
The city needs to provide written procedures that are clearly understandable, easy to execute and shared widely with city employees.
Finally, information about the tenants’ lease-payment status in the city-owned Commons should be transparent and readily available to the public. That would be the ultimate form of accountability.
Don't settle for a preview.
Subscribe today to see the full story!
All comments are moderated before posting. Your email address must be verified with Disqus in order for your comment to appear.
View our commenting guidelines and FAQ's here.
All content copyright ©2014 The Republic, a division of Home News Enterprises unless otherwise noted.