Thursday, June 24, 2010

Doesn't Toledo have enough debt already???

The City of Toledo is considering using tax dollars to guarantee loans on the old Fiberglass Tower office building in downtown Toledo.

The total obligation we'd be 'on the hook' for if the project isn't as successful as the developers hope is a whopping $13 million dollars - but only if the project doesn't go as planned.

Well, that's the same thing we've heard for years now on various other projects like the Commodore Perry building, the Hillcrest, Museum Place, the Steam Plant, and the Marina District.

The City of Toledo is still paying for too many projects that were touted in the same way - you only have to pay if we can't. In fact, the amount we're paying is right around $2 million a year. (See page 243 of the most recent budget available on line for Toledo - which is only the 2009 budget, by the way.)

And we've been paying these amounts for years.

So what does that mean to the average Toledoan? Well, since those payments come out of the Capital Improvement budget (CIP), it means less money for statutory requirements like roads (which are in desperate need of attention) and efficiency enhancements (like a financial computer system that might actually be able to produce a current budget, including current expenditures, to be put on line so that in June of 2010, we're not looking at one produced in the last quarter of 2008)!

Now, city officials and many council members will tell us that this deal is different (isn't it always?) because if the developers default on their loans, the city will end up owning the building.

And what, exactly, are we going to do with a failed building? If the private developer won't be able to make his project work, what in the world makes these politicians think they or the city staff will be successful? Because they're so much smarter??? It is to laugh!

Of course, since the debt obligation would only happen in the last 13 years of the loan term, many of these same politicians might not be around, so why should they worry?

You'll notice a lot of sarcasm in this post. I'm just so frustrated that in these dire financial times with the city looking at a deficit of millions of dollars for the 2011 budget, with increased costs for union contracts that they've negotiated, with declining population and loss of businesses, with mortgage foreclosures still at record levels - where in the world do they think they'll get the money to cover a new debt?????

They're trying to justify their desire to obligate the city to more debt by calling it 'economic development.' Well, it's only economic development if it is successful and making taxpayers pay for the lack of success does not qualify as 'economic development.'

Council should just say no! While they may 'hope' that the project will work, they should not risk public tax dollars for a private development - and certainly not when their track record on such 'investments' is so horrible.


Hooda Thunkit (Dave Zawodny) said...


Your sarcasm is well placed.

What part of increased costs and likely decreasing revenues do the politicians not get?


skeeter1107 said...

The obvious question is "what are they thinking?" The answer to that...I don't know. I suspect that there is always at some level "monument building" on the part of the politician.

To help in answering the question for the politicians, I pose this question. Will you commit your own personal funds to this real estate project? I mean, will you take a second mortgage on your home and put it into this deal? I'm sure the answer is NO. Okay, so don't put my taxpayer money in the deal if you won't do it yourself.

My suggestion when it comes to economic development. Redefine what "economic development" is. Economic Development should entail getting out of the way of entrepreneurs, cut regulations that stifle economic activity and stop harassment of businesses by City inspectors on some bizarre desire to prove their manhood and run businesses out of town. In short, just leave people alone.

By the way, none of what I said would involve loaning or guaranteeing a dime of the taxpayers monies.

Mad Jack said...

Two words: Portside.
b. 1984
d. 1990

The people who invested in the Portside Festival Marketplace (in one fashion or another) were either deluded or were smart enough to grab a quick construction profit and run like hell for the border.

I listened to an explanation from one of those people who championed Portside, and learned that the proponents really believed that Portside would work, and that it would revitalize Toledo. Somehow, someway or another, Portside would magically right the spilled hog trough and we'd see a return of the good life.

Fat chance.

Functionally, if not literally, these are the same people who are now trying to bury us all under debt and ruinous interest rates. This is $13,000,000 we'll never see again. Thirteen million is more money than many people will earn in an entire lifetime, and the government is just pissing it away.

I really had hope when Mike Bell got elected. Well, I never claimed to be a genius.

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