If we are negotiating a lower amount in return for them to pay it off
early, you are right, David. But I didn't see anything in the article
that said that, just that we were renegotiating the loan. Don't you
think the reporter would have made it clear that we were "forgiving"
part of the loan in exchange for early repayment if that were the case.
Of course, I may have mis-read or missed something, and if that is the
case, please let me know! If not, clearly we don't have all the "facts"
yet -- if your understanding proves to be correct I agree with you that
we should ALL be concerned about what this bodes for the future.
Barbara Nelson
Seward
David Brauer wrote:
>
> Barbara writes:
>
> >My understanding from the article is that the city MAY seek early
> >repayment. This is like you ( if you were Brookfield) getting an
> >opportunity to pay
> >off your mortgage early -- you aren't "gaining" or "losing" if you do
> >this -- you are simply paying the present value of your loan instead of
> >dragging it out over several more years.
>
> Is this right? Is this like pre-paying the mortgage, or are we really
> negotiating reduced terms AND a pre-payment?
>
> >Let's not jump to conclusions before we see where the risk levels lay.
> >Now, what the city decides to do if they DO get an early repayment --
> >that will tell the tale of their fiscal responsibility.
>
> I still think it is worse than this. My understanding is that the city built
> its spending programs - including NRP Phase II's full funding -- around
> income it was supposed to get from loans like Brookfield's.
>
> Now, if Barbara is right and I am wrong, it's possible the city could take
> the equivalent principal and reinvest it, and not be egregiously harmed
> (although there's probably no way to generate the rate of return it was
> getting on the mortgage). But if I'm right and we are actually lowering our
> principal, then cash flow will dip even more dramatically.
>
> The bottom line is that the city won't have the cash flow to pay the
> spending it obligated. I think that is what Council Member Ostrow alluded to
> in his earlier post.
>
> Also, as for waiting to comment and criticize: the Brookfield loan problem
> is one of the worst-kept secrets at City Hall. It's true the final
> parameters of the bailout aren't yet known, and the politicians haven't
> signed off. But based on months of conversations, a bailout is coming and
> the Council will be hard-pressed to wriggle out from between a fiscal rock
> and a hard place.
>
> So I don't intend to criticize the MCDA and Steve Cramer for entering into a
> renegotiation - I think that was a fait accompli. (I do worry how tough we
> will get and can get on Brookfield, but I'll wait to see how things go.)
>
> What I do think is fair to criticize - even at this early juncture - is the
> policy of highly questionable subsidies, which were questionable at the
> time, that come home to roost a decade later when most of the politicians
> are out of office or in higher office. (For example, the mayor; I also
> believe Cramer was a Council leader when the first Gaviidae loan passed.)
>
> I'm trying to link the Gaviidae (and earlier, Conservatory) loans to more
> contemporary subsidies - this time, for glitzy entertainment rather than
> high-end retail - that in my mind are also questionable. I admit I'm
> guessing how today's subsidies will turn out. But I think history shows
> big-time reason to be worried.
>
> David Brauer
> King Field - Ward 10
>
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--
~~
Barbara Nelson
EMAIL [EMAIL PROTECTED]
I wish you all manner of prosperity, with a little more taste.
� Alain-René Le Sage
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