In his final act as governor, Arnold Schwarzenegger is desperately trying to sell 12 state buildings to investment bankers to cover 4 percent of the $28 billion deficit he’s leaving as his legacy.
A separate last-minute deal to sell the state-owned Exposition Park, including the land under the Memorial Coliseum and Science Center, to USC — the great private university with the clout to obtain so many public benefits — could add a few more bucks to the $1.2 billion in ready cash that office building sale is worth.
Incoming governor Jerry Brown has his own solution to budget woes. He’s getting rid of the watchdog inspector general on federal stimulus funds which should allow that $50 billion windfall to find its way to a lot of private hands without public scrutiny.
The LA Convention Center also is up for sale or more likely to be given away as a gift to Tim Leiweke and AEG to build an NFL stadium downtown.
T’is the season forf giving and nowhere is the generosity greater than in the public sector even when it’s living on credit and borrowed time.
Tax holidays for new businesses in LA, tax cuts for Hollywood — and porn? — film producers, discounted water and power rates to businesses that create jobs, CRA subsidies to developers of unwanted office buildings and strip malls, job guarantees for union members, fast-track approvals of luxury condos and hotels with unlimited zone changes and variances.
We are witnessing something historic: A feeding frenzy at the public trough by many of the same private interests that brought down the U.S. economy and then were bailed out with public money which they are now using to buy up public assets.
The enablers are the public officials who deflect all responsibility for what has happened, for what is happening, and care so little for the public interest that they shamelessly will do anything in the interest of their own self-preservation.
How long this can go on before the bills inevitably come due is a matter of conjecture.
Inside City Hall, there are informed people who believe the bankers won’t foreclose on the city until mid-2012; others outside believe it could happen sooner.
It’s really up to the bondholders, the bankers who buy public debt and then leverage their position to buy public assets at the bottom of the market.
It’s a vicious circle that offends the sensibilities of at least some of the people.
The state office building deal that could cost the public billions of dollars in lease payments over time hit a snag because two of the officials fired from the oversight sued to block it after being fired, a problem compouned by the California Supreme Court being located in
one of the buildings for sale so the seven justices had to recuse themselves from
hearing the legal challenge.
Residents near Exposition Park only learned of the USC deal a week ago and their outcry prompted Council members Parks, Perry and Reyes to call for a slowdown in the process so Coliseum and Expo Park Commissioner William Chadwick — a real estate banker — was put in charge of quietly working out the details of the deal.
The city’s parking structure sale also has problems. Business leaders from Pershing Square to Westwood and the Valley are complaining about the financial impact on them of the high rates private operators will charge.
It’s same reaction residents have to having their neighborhoods destroyed by subsidized projects that add to slumifying everywhere from Boyle Heights to the Valley.
Yet, nothing changes. The money from unions trying to protect what they got and from commercial interests trying to add to the riches they already have keeps flowing to support the politicians who dispense the favors to them.
Maybe if we all take a moment to pray for LA this Christmas Day, there will be a mass awakening and we will all come to our senses. If that doesn’t happen, we’re all just going to have to work a lot harder to resurrect our city and our state.