I just want to pull a part of it over here for repetition. The bonds being used so that the City can 'loan' nearly $100 million to the developer, who only has to come up with $6 million of their own money, are called "Midwest Disaster Area" bonds. Gary has walked them back to their origin in Congress and finds that they MUST be used for, well, Midwest disaster relief. He cites the law thusly:
In the Heartland Disaster Tax Relief Act of 2008, Congress imposed the following specific requirement:
“[except that in determining whether a bond is a qualified Midwestern disaster area bond--paragraph (2)(A)(i) shall be applied by only treating costs as qualified project costs if -- in the case of a project involving a private business use (as defined in section 141(b)(6)), either the person using the property suffered a loss in a trade or business attributable to the severe storms, tornados, or flooding giving rise to any Presidential declaration described in subsection (b)(1)(A) or is a person designated for purposes of this section by the Governor of the State in which the project is located as a person carrying on a trade or business replacing a trade or business with respect to which another person suffered such a loss, and in the case of a project relating to public utility property, the project involves repair or reconstruction of public utility property damaged by such severe storms, tornados, or flooding…]"
and “such bond is designated for purposes of this section (on the basis of providing assistance to areas in the order in which such assistance is most needed).”
I have been following the No-So deal for a while and through a variety of legally required processes, including action by the MDC and the Council. This is the first I have heard that these bonds are dedicated for a narrow purpose -- a purpose that cannot be claimed for the No-So deal. If anyone has heard of anything regarding a City determination that the No-So area qualifies for disaster relief money, please note it here in the comments section, or contact me at hadenoughindy@gmail.com and I'll post the information.
What won't the Ballard administration do to get taxpayer funds into the hands of the well connected?
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4 comments:
Pat:
Write a letter to the Star editor. Quick!
The city is going to bond market at the worst time in 11 years and offering outrageous terms in order for anyone to even look at buying them.
Muni bond issuance at 11-year low
http://money.cnn.com/2011/03/09/markets/bondcenter/muni_bonds/
The city is offering a full "moral obligation" guarantee on this muni bond offering?
The state constitution prohibits the state from offering this type of guarantee. It goes back to when the state almost went bankrupt by financing water canal construction as railroads were making that mode of transportation obsolete.
That's why we have all this muni debt split up under different municipal corporations, authorities and other organizations.
Marion County was declared a federal disaster zone after storms and flooding in recent years (Regions Bank Tower damage in April 2006?) making the area eligible for federal SBA disaster assistance and other things. Not sure of the timing and specifics that would allow this bonding to get that authorization.
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