Most of the comments connected to the L.A. Times blog on this story are stock, p.r. and the "company-line" that happen to be self-serving. What a surprise. The real import of this deal is not yet explored since it has been handled quietly with little publicity.
This is another example of the thinly disguised move to pimp off resources of the city- city property. The sq. ft. rate is not stated here but other sources say it's about $2/sq.ft. earlier newspaper reports cited other rail manufacturer sources' view on the AnsaldoBreda projected employment as much more numerous than really needed from a commercial viewpoint; AnsaldoBreda's past track record is a big red flag, not meeting the existing contract terms in deadline and specification terms already.
The CRA is getting a reputation as a money waster, putting in cash into projects and coming up with little or no value for the dollar. The CRA affiliation for anything gives cause for further examination of the utility of the actions versus the expense that the city will bear. The CRA often seems not to be concerned with realities, only sales pitches.
Villaraigosa has loaded the MTA board with appointees, and his gubernatorial goal is making him reckless in getting there, making expensive deals for lump sum payments that he wants to use to "balance" the budget. Meanwhile, the public suffers from, 1. the wasted tax dollars for an uneconomical deals, 2. the "product" that comes back to bite you, as will happen with parking and perpetually rising rates, if Chicago-style long-term leaseholds of meters and lots for decades is approved, and 3, significantly, loss of city property that can generate income year-by-year at a better rate than fire-sale prices for a one-time, lump-sum return that Villaraigosa will use.
This technique to meet the cash deficit in the budget is a poor choice to handle the long-term health of the city, merely providing a quick fix for the Mayor and Council who feign concern for the residents. The loyalties of Council members have time and again been show to lie with the Mayor, not the residents and businesses of the city.
Looking at the continuously professed idea that we are in a financial crisis as a city, yet the land deal on the property is nowhere near market value and the anticipated result may not materialize, and further expense will be carried by the city (i.e., taxpayer). This happens too often.
A 50-year lease to get $15 million cash up front is all this is about. Well, that and the Mayor's view to being Governor of California. I think it's a bad deal that will be proven out in years to come as another bad deal by the city. The Convention Center site for billboards, digital ones at that, was conceived of in the early part of this decade and that was finally approved by the Council, fearful of lawsuits if any other action was made. That deal was another giveaway in today's pricing and market value, AND it entitles the business, AEG, to make a bundle of money while producing visual pollution of the area.
Council seemed to hang its collective head and approve the Convention Center billboard deal late last summer, blaming predecessors for the poor outcome. This current version of city council members will have it's own goofs to claim proper ownership of their transactional ineptitude. Remember when Magic Johnson got a "lifetime" contract deal for $25 million in the 80's? It seemed huge then. Now L.A. Dodger Manny Ramirez gets $25 million for one season (minus about a third for the suspension imposed on him). What seems "great" now could be a very bad deal later, or, as here, plainly bad on its' face. That Convention Center deal probably had that old Council thrilled at their contract skillfulness that looks so shortsighted and amateurish now.
This matter did not have competitive bidding in place. How efficient is that? The story says that the board "recommends opening up the contract to competitive bidding." That should have been standard operating procedure for these contracts, and not another supplemental step as merely an option and not the rule.
The story says,
" The tentative agreement approved by the CRA board Thursday set the terms for
the rail company to lease a prized parcel of city land -- a deal that would be
executed only if the MTA board agrees, as early as next Thursday, to let
AnsaldoBreda build the 100 cars."
So, I repeat, the City literally will pimp off property for a one-time cash benefit- with all the credit of the moment, naturally, going to be claimed by the Mayor. Of course it will. He wouldn't have it any other way, given the career-conscious mindset of his. We will see how bad this turns out- and that should show up before the 50-year lease later runs out. The Council members, many plainly rubber-stamps, are supportive of anything presented them by the Mayor. They will go through the public "show" of debate on this before they finally approve it. It would be a good time for Controller-elect Wendy Greuel to step forward to question the financial and product shortcomings inherent in this deal.
I doubt there will be any serious challenge in the City Council on this giveaway. If Tony wants it, they will bow to him. And if there's a bad deal to be seen here, the chances are that all of them will be long-gone, termed out by that time and it will be just a faint memory to most, but leaving an expensive footprint that shows it was there.
Tony has been very active in actually addressing city business. Except that the career-climbing jones of the Mayor is still there to have L.A. City interests treated as a secondary matter to getting to the "next office." And we might just have a Mayor that could help the City if he would focus on THAT job and not on any other elections and offices. To use one of his worn out phrase, "We can dream." Tony is, to take another of his oft-used terms, so "transparent."
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