CEDC - July 20th 2015
Community & Economic Development Committee
Meeting Minutes / July 20, 2015
The Community & Economic Development Committee met on Monday, July 20, 2015 at 6:00 p.m. at the Mayfield Village Civic Center. Members in attendance were:
Thomas Marrie (Council Rep), Joseph Saponaro (Council Rep), Ted Esborn (Economic Development Director), Diane Wolgamuth (Director of Administration), and Ronald Wynne (Director of Finance) Also in Attendance: Brenda Bodnar (CAC and Civil Service Committee Chair)
OneCommunity and Everstream
Mr. Esborn opened the meeting by introducing Rich Dugger, Director of Sales from OneCommunity (hereafter referred to as “1C”) and Chandra Hart, in Business Development at Everstream (hereafter referred to as “ES”). Mr. Esborn stated that this meeting is an opportunity to discuss the Village’s partnership with 1C at a time where there is no action pending and refresh everyone on how the Village’s relationship with 1C has evolved over the last several years. Mr. Esborn invited the Committee members to ask questions. Mr. Saponaro commented that he is interested in finding out how 1C and ES work together and how the Village’s fiber infrastructure compares to that in other communities. Mr. Marrie stated that he remains confused about 1C’s relationship with the Village and is interested in clarification.
Mr. Dugger stated that his goal is to explain what we have done and why, and to discuss how to view moving forward. Mr. Dugger explained that he has been with 1C for 10 years. In the early stages, 1C was trying to install broadband throughout the area. At that time, 1C was a non-profit, not a service provider. They worked with the Village to figure out how to take advantage of the fiber as an asset and spread it to others, starting with the Panzica Companies. 1C brought a larger internet connection that was more than the Village needed for its own use and provided a way to share it at a nominal cost. This was used to drive economic development. Then the Village built its new Police Station. A ring of fiber was built on Beta Drive and SOM Center Road. 1C installed fiber on Highland and Wilson Mills Roads. Mr. Dugger stated that this redundancy provides value to the business community.
Mr. Dugger explained that when QED and Mayfran connected to the fiber, 1C was not in the business of providing service, so they left that to Mayfield Village. 1C has only charged a maintenance fee of $250.00 per customer and Mayfield Village has received the rest of the revenue, placed in a fund created to continue to fund this activity.
Mr. Esborn stated that in 2014 this fund had reached approximately $21,000.00. Mr. Wynne added that the Village could use this money to pay its annual internet fees, however, we have chosen to keep it in the fund. Mr. Esborn stated that as we look to connect the new Community Room, we may want to use some of this money for that purpose.
Mr. Dugger stated that 1C has received a grant that requires them to serve the business community. That is where ES comes into play. ES is owned by 1C and they are for-profit. Mr.Wynne commented that before ES, the Village’s competitors were AT&T and Time Warner. Mr. Dugger continued, explaining that ES came on line in February of 2014. He stated the ES can grow business in Mayfield Village in a way that the Village has not been able to do in the past. Before ES came on line, 1C did not have a mechanism to serve smaller clients.
Mr. Saponaro asked, “If a small business in the Village called ES, what does that relationship look like? Ms. Hart explained that a customer would call for a price. They would decide how much bandwidth is needed and ES would bring transport over and sell them internet services. If there were any problems, the customer would call ES directly.
Mr. Marrie asked, “You set the price and sell to the business. They pay ES. What does Mayfield Village get?” Mr. Esborn responded that when the Village built the ring and installed 96 strands of fiber, 1C reserved eight of them for its use. Mr. Saponaro asked if the reserved fiber can be used to serve businesses. Ms. Hart responded that it could.
Mr. Dugger continued, “What happens when we run out? You dictate to us what that looks like.” Mr. Dugger stated that he believes the fiber should be available to anyone and reminded the Committee that many of the fibers are being used by the Village. Mr. Dugger asked, “If AT&T wanted access, what would you charge?” He stated that the cost cannot be “super expensive” because they can build more. Mr. Dugger suggested that the fiber be priced to encourage use.
Mr. Saponaro asked if anyone can build more? Mr. Dugger responded that they can, as long as space is available. Mr. Dugger added, “Even if no money is coming back to Mayfield Village, how are we serving your businesses? We have regional diversity here in Mayfield Village. That’s significant.”
Mr. Saponaro asked if 1C can provide fiber network maps, tell us what is available, and provide an update on the fund balance. Mr. Dugger responded that he could provide that information and added, “We are looking for a low cost way to make additional strands available to 1C.” Mr. Dugger explained that 1C can build most connections for $13,000. 1C typically likes to recover that cost over 24 months. “If the Village charges $10,000 per strand, we will build. If the Village charges $2,000, we will buy it from you.”
Mr. Wynne asked if the venture would be marketed as between ES and Mayfield Village. Mr. Dugger responded that that is preferable and suggested that the Village needs to establish a rate. Mr. Marrie asked if 1C would market its own strands first. Mr. Dugger said yes and added that it is important that we are quick to market. “If it is unclear how to proceed, it is slow and hard for me to establish a market. The ring has limited value without someone to connect it. 1C wants to do this proactively.”
Mr. Saponaro stated that we need to know the process as we are not on the ground. Mr. Dugger advised that he can provide market rates and alternate costs, but he is not comfortable laying out pricing strategies. Mr. Saponaro responded that we just need guidance. Mr. Esborn stated that he believes it makes sense to move away from the model where the Village is the provider.
Mr. Saponaro asked that current information be provided and that Mr. Dugger and Mr. Esborn answer the basic questions of where to move, why, and how to get there?
Mr. Marrie asked where else 1C has done this. Mr. Dugger responded that they have not as governments typically work too slowly. “Most communities contribute to fiber builds but generally do not own them.” Mr. Dugger stressed that, in this process, the Village has met its internal internet needs while driving economic development but added that, if the Village’s number changes 1C’s pricing strategy, “we won’t do it.”
Mr. Esborn stated that he believes ES can market the fiber in ways that he cannot. Ms. Hart asked if she could get contact information for Beta Drive businesses from the Village.
Mr. Wynne stated that we are inviting someone to compete against us. Mr. Dugger responded that 1C is willing to make the necessary investments. “If the Village spends money to add a lateral, you can bill it and recoup the money. If we build it, we own it.” Mr. Saponaro stated that it will cost the Village more to invest in laterals. Mr. Dugger acknowledged that clients that want a lower rate will go directly to the Village, however, most people want to know that ES is there to provide the service.” Mr. Wynne stated that he understands that the Village is not in this to make money, but everyone needs to understand that this is changing the model.
Mr. Dugger emphasized that Mayfield Village does not provide internet access; 1C does. He stated that 1C and ES can sell the assets more effectively to more people. “When you open it up, it is changing the relationship, but it has value.”
Mr. Dugger and Mr. Esborn agreed to gather the information requested and provide it to the Committee.
Mr. Esborn reported that he recently spoke with Mark Gaspar, the owner of Pizzazz Pizza. Mr. Gaspar advised that he just signed a five-year lease for the current building and will be purchasing the building at the end of the lease term. He now has the ability to make improvements and is interested in obtaining the Village’s financial support. Mr. Gaspar does not currently have a budget for the project, but would like to know if the Village will assist.
Mr. Saponaro suggested that Mr. Esborn speak to the property owner directly. Mrs. Bodnar suggested that Mr. Esborn request a copy of the lease.
Mr. Esborn advised that QED was the largest tenant at 700 Beta and they are preparing to move to the old Euclid Industries building. Mr. Esborn met with the owners of 700 Beta who advised him that they have divided the floor plan and would like to seek a setback variance to install additional parking closer to Beta Drive. In order to attract tenants, they feel they need this additional parking.
The Committee reviewed preliminary drawings provided and it appears that the property owners would like to add 60 spaces. From the drawings, the Committee was able to determine that, with the additional parking, there would still be 36’ of buffer between the parking and the road. Mr. Marrie commented that this variance request would have to go to Planning & Zoning. Mr. Esborn stated that the owners might approach P&Z with a potential tenant as they spoke of a 200-employee company that is interested in the space. Mr. Esborn stated that he only wanted to get this issue on the committee’s radar.
The meeting was adjourned at 7:10 p.m.
Respectfully submitted by
Diane Wolgamuth, Director of Administration