City should focus on loan-default "revenue stream"
On February 23, Anne Linehan called attention to a KHOU-11 report by Mark Greenblatt on the city's seeming indifference to multimillion-dollar defaults on city loans made to various downtown developers.
Readers of the Chronicle found out about this news in February 26 print editions of the newspaper.
Apparently, city officials were able to get their talking points in better order for the Chronicle story. Recall the statements of John Walsh, the city's point man on this matter, to KHOU's reporter:
The Defenders couldn't find a single payment that the Magnolia Hotel has ever made to the city of Houston. When asked if that surprised him, Walsh said, "No. I can't vouch for the reason why it has taken so long for us to pursue the collection of these loans."
But Walsh says the city might not be able to collect.
"Then if we can't collect it, we'll just take our lumps and do the best we can."
After a few days, though, the mayor's spin machine has Mr. Walsh sounding much better for the Chronicle:
The city intends to "aggressively pursue" repayment by the owners of the Magnolia Hotel and the Crowne Plaza Hotel, said John Walsh, Mayor Bill White's deputy chief of staff for neighborhoods and housing.
Tom Kirkendall calls these defaults -- along with the city's partnership in the Hilton Americas hotel -- "two more examples of why the City of Houston should not be in the business of financing redevelopment projects."
It is worth noting that Mayor White effectively used the Hilton America's hotel to collaterize part of the city's underfunded obligations to the municipal employees pension fund, and that even with optimistic assumptions regarding that hotel's performance (which may not pan out), that pension fund remains underfunded to the tune of some $850 million dollars.
Clearing up matters with such short- and long-term revenue implications for the city deserves much higher priority than revenue-enhancement efforts such as red-light cameras, expansion of downtown parking meters hours and coverage, or parking authorities.
RELATED: Hyatt Regency in Foreclosure.
Posted by Kevin Whited @ 02/27/05 05:54 PM | Print |
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