They call it their “gold in the gutter” — the pennies, dollars and millions the City Council is using to paper over the massive budget deficits they created without actually reducing spending.
As the Council gets closure on its latest edition of phony budget-writing today, or perhaps Tuesday, the biggest nugget they are counting on is the $53 million in a lump sum payment from leasing 10 city-owned parking structures to a private company for 50 years.
That’s a lot less than the upwards of $150 million the mayor was looking for a year ago but you can be sure that the mayor’s and council’s vast army of P.R. spinners will put a smiley face on this back room deal that will make someone very rich even richer.
To maximize revenue, the 10 parking lots are being put up for lease as a package with the revenue earmarked for the general fund to avoid layoffs — and there in lies the problem.
The Department of Recreation and Parks like libraries and other services provided to the general public is under assault from city officials whose only goal is to protect city jobs, not public services. They already have eliminated 4,000 jobs that provide basic services through early retirement, vacant job eliminations and transfers to special funds and they want to avoid actual layoffs anyway they can.
But that isn’t proving so easy to do.
Under the City Charter, the Pershing Square lot is owned by Rec and Parks which gets all the profits from it — roughly $2 million a year now despite the city’s utterly poor management of parking facilities and its high costs for salaries and benefits which are estimated at 50 percent higher than a private operator’s, according to a consultant’s report.
Back in January, the City Administrative Office and Chief Legislative Analyst offered a detailed analysis of the parking structure proposal, including this passage on the Pershing Square issue:
Pershing Square
RAP states that Pershing Square generates approximately $2 million annually that is used to
support RAP programs, including $500,000 transferred annually to the General Fund in
support of various Citywide programs. The City Attorney has concluded that RAP is entitled to
the “net proceeds” ascribed to this asset through a concession, where “net proceeds” are
gross revenues less expenditures for operation and maintenance. To determine RAP’s proper share of the rent derived from a lease for all 10 of the parking structures, RAP and the City must estimate and agree upon the amount of the rent attributable to Pershing Square. The City Attorney has advised that various factors are relevant to this rent allocation, including, but not limited to, the historical revenue and expense numbers for all of the structures. In general, the working group believes that a private operator will generate more value from the Pershing Square garage, and this additional value should be available to support RAP operations within the funding requirements of the City Charter.
I added the emphasis because the problem lies in the determination of revenue to the parks if it’s included in the package, an issue the mayor who had demonstrated so little respect for the rule of law would like to ignore.
According to an email from the City Attorney’s Office, the mayor wants to know “why the (Rec and Parks) Board of Commissioners could not agree to receive payment from
the General Fund during the 50 year term of the lease (e.g., $2 million
per year for 50 years).”
“It was explained that monies received from revenues earned by the
department are required by Charter Section 593 (c) to be placed in the
RAP fund, and that more specifically pursuant to Charter Section 596 (a)
(5), proceeds from leasing the subsurface space for operation of a
public parking structure ‘shall be paid into the Recreation and Parks
Fund.’ The Charter is clear and does not provide a basis for the Board
or anyone else to waive its requirements. The Charter can only be
changed by an amendment approved by the voters.”
Under the Charter, Pershing Square gets specific protections because it was deeded to Rec and Parks specifically to provide funding to it. Rec and Parks also gets a piece of the city’s property tax revenue which provides most of its funding.
In theory, those funds are safe even as Rec and Parks is getting hit with a $25 million bill for water and power and reduced general fund support. But theories are cheap and city officials are looking for even more, thus the attempt to raid the Pershing Square revenue.
The City Attorney’s Office advised the mayor and others that raiding that money likely would lead to a taxpayer lawsuit.
“We also advised that the potential consequences of violating the Charter
are that an action for declaratory relief and injunction could be
brought by any taxpayer. The likely result of such a lawsuit would be
that payment to the RAP Fund would be compelled, with interest, and
attorney’s fees and costs would have to be paid by the City’s General
Fund,” the email said.
“If an arrangement that would violate the Charter is included in
the lease, the City Attorney would not be able to approve the lease. If
an arrangement that would violate the Charter is included in a public
report to the Board of Recreation and Park Commissioners or any other
City body, the City Attorney would be compelled to comment on the
Charter requirements.”
So that leaves the parking deal up in the air — something City Council members are set to ignore by including the $53 million in next year’s budget.
They will undoubtedly try to get around the City Charter by allocating a portion of the $53 million to Rec and Parks but will it be a fair allocation?
Pershing Square is the most profitable city parking structure with the two that are larger — Cinerama Dome and Hollywood & Highland — both losing money hard as that might be to believe.
It is the plum in the deal. Private operators would almost certainly raise the daily rate of $15.40, even double it, and sharply cut operational costs, much as they will do to all the other lots.
City Hall has the option of continuing to operate Pershing Square and the other parking lots but that would take investment and skilled management and lower cost structures. But it wouldn’t provide all that upfront cash now in exchange for future revenue.
The city could lease Pershing Square separately, leaving the revenue stream with Rec & Parks but that wouldn’t avoid having to lay off city workers since the leasing of the nine other structures wouldn’t generate nearly as much to the general fund.
Call it the Pershing Square Dilemma, just one example of the many problems city officials are facing because they are incapable of facing the budget crisis head-on.
I find it odd that there is nothing being airing on Channel 35 yet the city council meeting should be taking place. I also noticed that Channel 35 always has “to be announced” I called Time Warner asking why doesn’t it list the individual shows. They stated the listing comes out of Channel 35 and they haven’t posted it. You can’t record a meeting only hours of “to be announced” To me this is another clear indication of the type of bullshit coming out of city hall to try and keep the residents not informed of their corruption at meetings.
It seems LA is operating like Chicago with one difference. They are up front with their shady deals.
Damn the torpedoes and bring on the lawyers!
The Council, the mayor are as shortsighted as the people who sell annuities for 30-cents on the dollar for a few quick bucks, which will disappear into their vast sinkhole of overspending and mismanagement. In a couple of years they’ll wish they had the steady income they so callously sold short, and we’ll wish we would have recall the whole damn bunch of them.
http://www.recallcityhall.org
Damn the torpedoes and bring on the lawyers!
The Council, the mayor are as shortsighted as the people who sell annuities for 30-cents on the dollar for a few quick bucks, which will disappear into their vast sinkhole of overspending and mismanagement. In a couple of years they’ll wish they had the steady income they so callously sold short, and we’ll wish we would have recalled the whole damn bunch of them.
http://www.recallcityhall.org
I can’t believe these bafoons have been dicking around for over a year discussing and not doing anything. They have lost the city millions because of their inaction. Of course they don’t have the guts to layoff anyone just look at their record. Reporters should do a story of all the city hall staffers who have been arrested and are still employed. You have a Deputy Mayor arrested for domestic violence. You have a councilmember staffer arrested for cocaine and prostitution and still working, another councilmember staffer who totalled city car and still employed, another councilmember staffer arrested for assault and still employed, another councilmember staffer arrested for DUI. Do you all see a pattern here?
After they have sold the parking structures, they will sell the Port, LAX, and then DWP. Next will be all city parks, libraries, public streets and finally City Hall. They sold their souls long ago and will sell yours too in the Orwellian world we are headed towards where a handful of rich folks will own and control LA. But the city employees will still have their jobs.
I wonder if we are headed to civil unrest over the crap that the City Council is doing now. We are rapidly heading toward a City ruled and owned by the wealthy, little middle class, and a mass of poverty stricken residents.
This is a time for COOL HEADS at City Council and I am not seeing that. I fear for the City. I do.
I see Los Angeles doing what Greece is doing and revolting. I just read the agenda for Wednesday and WTF????? people are losing their jobs and bimbo Janice Hahn “the dumbest politician in America” wants to spend $200,000 for access ramps in her district on Gaffey street. On the same agenda all the morons on council want this week to be dedicated to Steven Sample the USC president who retired. Are they f–king kidding??? Again, screwing around not handling the priorities of this city and bullshitting with crap that doesn’t matter. The morons can save $125,000 if they make the Public Works commissioner a volunteer position and not pay the Mayor’s son’s godmother all that money. Most commissioners are volunteer positions.
OMG!!! Right when you think it can’t possibly get any worse the dumb ass Mayor sends a letter to council saying that he doesn’t want them to layoff and sides with Koretz, Huizar, Wesson in supporting not cutting certain depts. In this late stage of the budget the Mayor is still trying to negoiate with the unions. We are DOOMED. This assholes are clueless. At this point any candidate who wants to run on the Clean Sweep LA will be a shoe in to beat this fools. No one can be as stupid, naive, ignorant then the bafoons making the decisons right now around the horseshoe. Hell, a college graduate would be a great candidate.
Imagining Mr. Mayor’s Introduction of Some New City Hires
by Jon Regardie
Published: Friday, May 7, 2010
DOWNTOWN LOS ANGELES – Good afternoon Los Angeles. Today, I am pleased to announce several high-level appointments and changes in my administration. The moves which I describe will allow us to meet head-on the challenges facing us at this most difficult time. The challenges, by the way, are the fault of the City Council.
LA Downtown News
http://www.ladowntownnews.com/articles/2010/05/07/news/doc4be4a1e329994823240149.txt
LA Times ” Villaraigosa alters course…….” He must have gotten laid with a Union leader again………..
Ron, good stuff. The Mayor’s staff has known for months that the Pershing parking lot could not count or that the excess funds would go back to the parks department. They continued to ignore the advice. Someone should also ask what the real goal of the Mayor’s office is with the golf courses. And then of course, the Zoo department wanting to charge for the parking lot. Technically, the parking lot is still parks department property that was moved by ordinance when the zoo department was created. Thus, parks department should get that money too.
6:43 PM-He might have been laid, but we got screwed.
One of many of Tony`s dirty tricks. Council President Wesson? Eric you got screwd.
Crooks, liars, morons, thieves and assholes reside in City Hall. Cardenas wants to increase parking tickets. What`s next? They have no shame. Tony should be examined by a psychiatrist whether his has lost his faculties. I know the President can be disqualified for mental illness. Could somebody check the Charter. May be we could get rid of Tony.
Villaraigosa is playing games by betting on the Lakers, while the City is disintegrating. Has he read G. Will`s column in Newsweek? Oh, I forgot. Will is too intellectual reading for someone who flunked the Bar exam 4 times!!!!!!
Tony has moved 300 bodies to the Proprietaries, most, if not all, to DWP. Who the f.. he thinks will pay for their salaries? A ratepayer revolt is comimg.
The Socialist fooled us. And we thought he had left the gangs. Shame on us, because we entrusted our City to a fraud and his cohorts.
I’m a little confused. I heard Santana talking about selling off one of the parking lots on Larchmont Blvd except the title is not in the city’s name.
I looked it up and it appears to be privately held.
Have the mayor and 15 geniuses become so arrogant they have decided to completly bypass taxes and fees and just take our properties from us?
The parking lot that is used by hundreds in the criminal courts building on Spring the city is giving to Broad for $1. That land is city property owned by the “taxpayers” and estimated worth $7 million. I’m not a CPA or know my numbers but it appears the smart thing to do is use that $7 million land another way instead of giving it to that idiot Broad who is a billionaire. Where are the employees in the criminal courts building suppose to PARK? That’s what we should be asking those fools in city hall.
Given past attempts to build condos without enough (or any?) parking, it seems like parking lots is where the money is.
Leave it to the city to give away long term revenue for a quick fix. Isn’t that what drug addicts do–sell anything for a quick fix?
city hall are all crooks and liars this left radical socialist democrats they all need to go.
The problem at city hall is there are NO leaders or checks and balances. The individuals who complain the most are the same people that continue to vote for the LACK of LEADERSHIP, including the career politicians like Villaraigosa, Alarcon, Cardenas, Koretz, Wesson, Krekorian, politicians into office.
Let’s start the NO vote campaign against Lt. Gov. Candidate Janice Hahn on Tuesday, June 8, 2010 or STOP complaining.
Twenty one days left for June 8 and counting!
http://3.bp.blogspot.com/_eU0Q5KAVbsI/SzhQlezcLsI/AAAAAAAACrc/TJTGpEoPZzw/s1600/800px-Janice_Hahn_and_Tom_Labonge.jpg
Pershinhg Square has been a Recreation and Parks honey pot for years. There needs to be a full disclosure of the Pershing Square accounts. The sad thing is with all that money the place still looks like crap. Who is in charge of the money at Pershing Square?
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