This is a brief note to explain my choice of the adjective "greedy" when describing the MCDA.
The MCDA has become the "lender of choice" by crafty businessmen (and others) in Minneapolis. The Agency takes no financial risk, but receives millions of dollars in "fees" for underwriting bond issues. The borrower doesn't mind paying excessive fees - because he/she/it uses the newly borrowed money to pay the fees and also takes no financial risk. Taxpayers, and in some cases, municipal bondholders take all of the risks. In other words, the MCDA's motivation to do deals is to get the fees (like commercial and investment banks) - but it ignores financial prudence because the Agency has nothing to lose. I asked a high level MCDA staff member about a specific loan to Northern Cap. The public justification for this expenditure was "to create living wage jobs in Minneapolis." After receiving the money from the MCDA, Northern Cap moved its sewing operations out of the country and fired its local workers. When I pointed out the failure to create jobs, the response I got was - "So What? We got our fees." If Wells Fargo received hefty fees for every loan it granted, and didn't care if the loans were ever repaid - it would be shoving money out the door too - just like the MCDA does. Here are a couple of ideas that would improve the odds for taxpayers: 1. Any person or entity that receives a public lending accommodation, must make his/her/its tax returns publicly available - for the borrower and RELATED entities. 2. The MCDA must report delinquencies, non-performing loans, bad debts, grants, forgiven debts, etc. publicly on a quarterly basis. The MCDA admits that it has $178 million of "developer loans" outstanding - the taxpayers should know who owes this money to the City. If a borrower wants privacy, he or she should stay in the private lending market. The MCDA should not be rewarded for writing bad loans. Vicky Heller Cedar-Riverside and North Oaks _______________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Unsubscribe, Digest, and more: http://e-democracy.org/mpls
