LA Confidential: Mayor Villaraigosa Covers Up $400M Taxpayer Boondoggle
by Ben Shapiro
21 Sep 2012
Los Angeles Mayor Antonio Villaraigosa, who also ran the Democratic National Convention, has now embroiled himself in a scandal of epic proportions with taxpayer dollars. Villaraigosa and staff negotiated a deal with Anschutz Entertainment Group (AEG) to build a football stadium in downtown Los Angeles. The price tag for the taxpayers: almost $400 million in debt, supposedly to be repaid by AEG. The stadium will be built on land currently occupied by the Los Angeles Convention Center. Los Angeles, as you may recall, doesn’t have a football team.
Sounds like a typical stadium boondoggle.
Except that it turns out that AEG is being sold, which means that the group that will perform the contract with the City of Los Angeles is not the same as the group that negotiated the contract. Here’s where it gets truly ugly: Villaraigosa knew about the upcoming sale, and told nobody. He kept it a secret. He said nothing to Chief Legislative Analyst Gerry Miller and City Administrative Officer Miguel Santana. Members of the City Council, who will have to sign off on the deal, were kept in the dark, too.
The CA cities that have made the financial news most recently have been in the teens of the CA’s Largest Cities list, but looking at CA’s largest cities isn’t exactly pretty either:
1.) LA is CA’s largest (and the 2nd or 3rd largest US city, IIRC). This nearly half-billion-dollar boondoggle (and anyone with 1/4 a brain knows it will mushroom to 2X-4X these official $$ numbers!) is on top of LA’s the more than one-quarter-billion $$ budget deficit and its more than $25B unfunded pension liability;
2.) Second largest city San Diego is struggling to avoid budget deficits, and as far as I can tell, succeeding (did I mention that they are struggling?); and San Diego is also, as far as I can tell, current on its pension contributions;
3.) San Jose is struggling to close its (proportionally) very large budget deficit, and its pension fund is underfunded by some $3.5B;
4.) If SF government numbers can be trusted to resemble reality - a dubious proposition - SF’s 2012-2014 two-year budget is balanced, after considerable struggle; if, again, you believe SF government $$ numbers, SF’s pension contributions are growing but current; meanwhile, businesses are fleeing SF (despite this article’s upbeat title, that businesses come and go, it fails to mention even one company that came and stayed, while listing many that left), which jeopardizes future revenue.
Of the four, only SD has a history of many leaders being Rs (and SJ’s mayor has ruffled many Lib/Prog/D feathers, might even be called a DINO in some D circles). Because I think SF’s government-provided numbers are probably cooked to an extra-well-done state, the only one of CA’s top 4 cities that I think probably reasonably healthy is SD. CA’s 5th and 6th largest cities are Fresno and Sacramento, respectively. Fresno is in the San Joaquin Valley, where agriculture, the region’s economic mainstay, has been all but destroyed by court-ordered “drought”. Sacramento’s economic mainstay is government - officials and bureaucrats; anyone curious enough to care can do the research, but I seriously doubt Sacto is anything remotely resembling healthy financially. CA is pretty much every bit the financial basket case it’s reputed to be, and probably worse!