How many times should taxpayers pay for the same granite counters?

When a local developer asked for a tax break three years ago, they told Cincinnati City Council a tale of woe about how if they didn't upgrade kitchens in the Renaissance at the Power Building they couldn't compete with all the fancy new apartment buildings being built Downtown.

It was a fight, but the majority of council members agreed to the five-year tax break, worth $1.25 million.

But instead of doing things like install granite countertops, owner Capital Investment Group sold the historic building to the Indianapolis-based Galbraith South Realty Co. Now the new owners are asking to extend the tax break for an additional five years so they can actually make the kitchens nicer.

Council members' reaction?

"This shows a complete and utter failure of the city administration to ensure that these financial promises were fulfilled as part of the five-year extension," said Councilman Chris Seelbach, who opposed the 2014 tax break extension. "Putting it simply, taxpayers and City Council were conned by Capital Investment Group."

So now what? Can the former owner be penalized? And what about the new request? Council postponed the matter until Dec. 18 to try to figure out what to do.

By the end of the current abatement, the building will have been tax exempt for 15 years. The abatement expires in 2019. It's unclear why the request is being made now. 

Gregg Fusaro of Capital Investment Group declined to comment.

Chad Munitz, vice president of Towne Properties, which manages the building, did not return a call for comment. 

But here's what he wrote to the city in making the request on behalf of the current property owner in July: "The property is now valued at one of the highest levels per unit in the entire city. The owner is committed to continue to reinvest in the property, but is at a disadvantage with all the new residential rental apartments in the neighborhood that have received significant amounts of subsidy and tax abatements from the City of Cincinnati."

He pledged the building owners would put $2.3 million into the Renaissance at the Power Building.

But it's not clear exactly who the current owners are.

Records show attorney Mark Reckman as the agent for Galbraith South Realty, but he told The Enquirer another attorney in his firm handles matters related to the building and that he would pass a message along.

While GSRC is based in Indianapolis, a Business Courier story quotes Towne Properties' managing partner, Arn Bortz, as saying GSRC Power is a group of local buyers, though he wouldn't say who specifically is in the group.

City documents show the building, at 226 East Eighth Street, was built in 1903 and converted into 117 apartments in 2001 and 2002.

Power Buildings Associates bought it in 1997 for $550,000. The building sits in a city- designated community reinvestment area, which allows building owners to apply for 12-year tax abatements. 

In 1998 the owners applied for and were awarded an abatement to do the apartment conversion, city records show. When the exemption expired in 2014, Power Building Associates requested a 5-year extension.

Cue the council fight.

Seelbach and Councilman Wendell Young are among those who objected.

Said Seelbach in the December 2014 meeting: "I don't think this makes sense. There is always going to be something new that will need to be happening for a Class A building. And I don't think it should be up to city taxpayers ... to give up revenue in order to do that."

Vice Mayor David Mann zeroed in on whether the promise to do upgrades was in writing.

Mann: Are you willing to make a binding agreement (to) spend that $2.5 million in the next (5) years?"

Answer: "Absolutely."

Mann: "OK."

The extension was approved in a 5-3 vote. For it: Yvette Simpson, P.G. Sittenfeld, Christopher Smitherman, Charlie Winburn and Kevin Flynn. Against it: Seelbach, Young and Mann. Amy Murray abstained. 

Only, as far as records show, no agreement was ever drawn up. 

Then, last year, GSRC Power and SRC Power, a subsidiary of Schiear Reality Company, bought the building for $25.5 million. 

If council extends the new tax break, the building's owner would have to agree to return 15 percent of abatement value to streetcar operations under a program called voluntary tax incentive contribution agreement.

Seelbach has asked city administrators if there is a way to force the prior owners to live up to their promise and is calling for all agreements in the future to detail promises made for accountability purposes.