Aren't they embarrassed? Guess not. The Council agreed to give developer CIM Group a $19 million loan to finish the Midtown Crossing shopping center, bringing to $34 million the total amount of city loans and subsidies for the project. But that's not even the worst of it: Under terms of the deal, CIM can pay back the money using up to $57 million worth of sales, business, and utility tax revenue generated by the project. We think - the numbers keep bouncing around. The main point is that if L.A. doesn't benefit from tax revenue, what's in this for the city? Bingo - the city is, in effect bankrolling much of the development, and not getting a whole lot in return. From the LAT:
Even after the vote, there was confusion over the total cost to the city. Under the proposal, CIM would receive two loans totaling $28 million, both from the federal Housing and Urban Development Department. One report, prepared by the city's top policy analysts, said CIM would be allowed to pay off the principal and interest by tapping up to $56.6 million in sales, business, utility and property taxes generated by the project over the coming decades. The official in the Community Development Department who prepared the loan agreement put that figure at $37.5 million. Ninoos Benjamin, who heads the department's economic development division, said the city's total financial commitment over 30 years would reach $71 million, not the $90 million cited in another report.
If taxpayers are getting screwed on this deal - and they clearly are - you'd think city officials could at least agree on a number. If ever there's an example of why municipal governance is a lost cause, this is it.