Questions about the East Side market

CLEVELAND – Questions continue to surround a Cleveland-area nonprofit that is expected to receive $ 2 million in American Rescue Plan Act funds after city council passed legislation Monday night. While the $ 2 million in ARPA funding is intended to help the Northeast Ohio Neighborhood Health Services (NEON) nonprofit strengthen its health care and social services programs, some board members said NEON’s handling of the East Side market continues to give them pause. .

According to the legislation, which was backed by the administration of Mayor Frank Jackson, NEON’s plan for using the $ 2 million funding included some of the nonprofit organization’s existing programs, including screening and lead prevention, food distribution, and other health and wellness initiatives. In addition, $ 360,000 would be spent on a clinic to help residents clear their criminal records, as well as an additional $ 200,000 to cover expenses related to fire damage at NEON’s main facility, Hough Healthcare. Center, earlier this year. The legislation was passed on Monday evening with council members Mike Polensek, Jenny Spencer, Kerry McCormack and Charles Slife voting against the proposal.

“There are all these questions about the operation, but as the time went on I became very worried. This is why I was hoping [Monday] that we would at least have waited until the new administration arrives and has a chance to consider it, ”Polensek said on Tuesday afternoon. “The question of whether we would need to put more of the city’s money into a program, in an operation that concerns us all very much, is why I voted as I did.”

Although this was outside the scope of the legislation, NEON’s operation of the East Side Market was at the heart of Polensek’s concerns.

Located in the heart of Glenville, the new East Side Market opened in 2019 after a long and expensive development process. Although the property is owned by the city, NEON is in charge of market operations and was supposed to develop an adjacent community kitchen, clinic and community center. Although the signage related to the kitchen and the community center has been erected, the programming is not yet live. A representative from NEON testified at the Committee of the Whole meeting on Monday that NEON plans to obtain an occupancy permit next year.

The development of the new East Side Market took five years and nearly $ 7 million. Upon opening, the market struggled to obtain a liquor license, ATMs, and Ohio lottery services. In addition, the market operator withdrew shortly after it opened.

However, since its opening, residents of Glenville have supported the market’s offerings, which include fresh produce and other groceries. The market has also filled a need by offering fresh and affordable groceries in what is otherwise a food desert.

“I come to the East Side Market every day. I love their food. I like their prices. It’s the closest grocery store to me, ”said Lewis Hood. “When the market opened, I could just cross the street to do my shopping and whatever I needed. “

Polensek said he has no regrets for supporting the development of the East Side market, but recent revelations, including the federal indictment of one of the contractors who worked on the project, made Polensek reflect. .

“I am disappointed with the way it was handled, with the management of the operation. As I learned more operations, I became more alarmed and worried, ”Polensek said. “This is another reason why I voted the way I did. “

Last year, a federal grand jury indicted Arthur Fayne, a board member of an anonymous for-profit subsidiary of NEON. Fayne’s firm, Business Development Concepts, has also been heavily involved in the development of the East Side market. According to the indictment, Fayne, who has pleaded not guilty and is awaiting trial, allegedly embezzled nearly $ 900,000 by serving as an intermediary between the association and contractors working in the market. The indictment says Fayne used the money, which was supposed to cover labor and market building supplies, to gamble at the casino.

The impact of the alleged diversion on the development and functioning of the market is not clear. NEON did not respond to calls for comment. Monday’s discussions at the Committee of the Whole meeting also focused on the compensation of NEON’s top executive.

According to income statements, NEON chief executive and chairman Willie Austin earned a salary over $ 500,000 in fiscal 2019, the most recent statements available. Additionally, NEON operated with a deficit of nearly $ 1 million that year and continued to see declines in total patient numbers in recent years.

Polensek said the lingering questions regarding NEON have been particularly troublesome, given the historic history of the nonprofit and the goodwill the organization has generated during this time.

“While I was talking [on Monday], I looked at my left hand and the five stitches. Where did I get these five stitches when I was a kid? In this clinic, the Collinwood clinic, which [NEON] works, ”Polensek said. “We just can’t keep throwing city dollars or these ARPA funds, which are really very important, into an operation that also has management problems and possible irregularities. “

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