Paying for Vera's mistakes
The debtmeisters at Portland City Hall went to the well again a few weeks ago, borrowing $67 million to refinance loans that had been taken out 10 years ago to finance the utterly misguided expansion of the Convention Center. Actually, it's more like $77 million -- that's how much the new bondholders forked over to pay off the old loans. But through the usual hocus pocus of banks, the face amount of the new IOUs is $67 million. The official sales pitch is here.
Like the old bonds, the new paper puts the city in hock through 2031 to pay for the Convention Center expansion. The bonds are fully backed by the city's property tax base, and so they must be repaid come hell or high water. They certainly aren't contingent on the Convention Center breaking even -- Wall Street isn't that dumb. Paying the bonds so far, and expected to do so for a good while longer, have been the Multnomah County taxes on hotel rooms and car rentals.
Some folks say, "The locals shouldn't complain -- the tourists are paying for it." Folks, don't let the shell game fool you. Tourists should pay taxes around here -- and those taxes should go for things we really need. Our hotel tax could be going to get the mentally ill throngs off our streets, to give just one example.
Anyway, on top of the refinancing bonds, the city has an additional $15 million or so of 2001 bonds outstanding for the Convention Center, and those aren't being refinanced. All told, there's about $90 million of debt still to pay for this particular boo-boo by the 2001 City Council -- a blunder that then-Mayor Vera Katz insisted on making despite voters' rejection of the expansion with the defeat of ballot measure 26-69 in 1998.
The total debt payments left on both the continuing and the refinanced debt -- counting principal and interest -- come to $155 million. The wing of the Convention Center that was built with all that borrowed money continues to stand empty most of the time. But hey, Hoffman Construction got paid. The City Council was particularly good at that aspect of things.
UPDATE, 10:38 a.m.: Oh, and by the way -- also on the City Council back in those days was one Mr. Charlie Hales.
| Posted at 10:19 AM | Permalink |
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Comments (12)
And where is that lovely elder statesperson these days?
On second thought, never mind...
Posted by Ralph Woods | October 14, 2011 11:23 AM
These city debt and finance issues (constantly ticking in the permanent pink bar at left) are why I commended to you the Michael Lewis piece in this month's Vanity Fair (and do so again).
Posted by Sally | October 14, 2011 11:49 AM
Actually, I thought the debt was for METRO since they own it. It doesn't matter though, Bragdon had those same phallic fantasies (you explain the meaningless spires) that if they only poured a little more money into OCC it would work.
Posted by Steve | October 14, 2011 12:53 PM
The bonds are the city's responsibility, not Metro's.
Posted by Jack Bog | October 14, 2011 12:58 PM
OK - The one commmon thing about METRO and CoP is it sure is fun spending other people's money ain't it?
Posted by Steve | October 14, 2011 3:41 PM
Paying for Vera's mistakes
Portlanders will be paying forever for Vera's mistakes, not just financially but in the physical "redo" of our city and particularly some neighborhoods who would have been much better off if only Katz/Hales would have left them alone.
Too bad Vera didn't select another city when she came to the west coast.
Too bad Hales wants back in.
We have had enough of "redo" -
in my opinion, the only redo we need now is to "redo" the insider game of who gets into those council seats.
Posted by clinamen | October 15, 2011 9:48 AM
Vera sold out to the Police and Fire Disability and Pension fund as well as building the Convention Center expansion. So they rewarded the guilty with a bronze statue on the eastbank. It should be sold for the scrap value and the proceeds (likely several hundred dollars) used to pay down the debt.
Posted by Don | October 15, 2011 10:02 AM
Re: "Oh, and by the way -- also on the City Council back in those days was one Mr. Charlie Hales."
Oh, and btw -- the COS of Ms Katz -- now pouring the poison of her self-serving profligacy into the porches of PSU students' ears -- was none other than the current, divisive, alleged mayor.
Posted by Gardiner Menefree | October 15, 2011 1:36 PM
Yes, that was quite the trio we had a few years back, Katz, Hales, and her Chief of Staff, Adams!
...and we wonder why we are in trouble?
Posted by clinamen | October 15, 2011 2:58 PM
Thanks for keeping score on who's digging us deeper into the hole, Jack. I am hopeful some future A.G. will be able to use this information.
At least a few saw the Chapter 9 filing being written on the wall of debt.
We'll be like Ireland, with fewer redheads.
Posted by Mister Tee | October 15, 2011 5:19 PM
Thanks for keeping score on who's digging us deeper into the hole, Jack...
More on keeping score as to those digging us deeper into the hole -
Fish, Adams and Leonard threw $80 million of our dollars into a big hole for up at Powell Butte that we don’t need. They did this at a hearing last May, after businesses and citizens pleaded with them to stop the spending.
Posted by clinamen | October 15, 2011 8:38 PM
Then there was the Multnomah Stadium redo #1, back then,
Same dog and pony show selling that and encumbering the citizenry for decades to come.
Posted by From Where I Sit | October 16, 2011 12:00 AM