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City Council Delays Forgiving $288 Million in Loans Owed to City

By a unanimous vote on June 21, the San Diego City Council delayed until July 13 the consideration of "extinguishing" $288 million in redevelopment loans owed to the City of San Diego. The unanimous vote also delayed a retroactive halt to assessing interest on Redevelopment Agency loans owed to the City (see item 203b).

Despite a projected city budget shortfall of tens of millions, city staffers were unable to explain how forgiving $288 million in redevelopment loans would erase city worker pension deficits, restore fire fighting capabilities, fill street potholes, add open hours to existing libraries, or keep the Chargers in town with a new stadium.

Instead, Scott Mercer of City Redevelopment offered that a HUD inspector general audit had found the City had failed to properly document the mega-millions in loans to the Redevelopment Agency. HUD also found that the City had failed to ensure that the loans originating from federal Community Development Block Grant funds would ever be repaid. City Redevelopment therefore recommended that the massive loan amount be "extinguished" and made to go away. A concurrent recommendation would stop the City from collecting interest on the Redevelopment Agency loans owed to the City as of June 2009.

The HUD inspector general's audit was mentioned in the ongoing Scott Kessler wrongful termination lawsuit against the City of San Diego. In his lawsuit, Kessler alleges that he was fired after he became suspicious of financing arrangements in business improvement district activities around Little Italy (see Don Bauder's Scam Diego series on the Kessler lawsuit and the FBI investigations of Little Italy BID).

The postponement of the loan "extinguishing" to July 13 is only days after a scheduled July 9 Superior Court hearing on a City motion for protective order covering Mayor Jerry Sanders in the Kessler lawsuit.


More lawsuit-related Scam Diego items:

What a Tangled Web We Weave

Did Sanders Order Detective Reprimanded?

City Trying to Block Deposition of Sanders

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By a unanimous vote on June 21, the San Diego City Council delayed until July 13 the consideration of "extinguishing" $288 million in redevelopment loans owed to the City of San Diego. The unanimous vote also delayed a retroactive halt to assessing interest on Redevelopment Agency loans owed to the City (see item 203b).

Despite a projected city budget shortfall of tens of millions, city staffers were unable to explain how forgiving $288 million in redevelopment loans would erase city worker pension deficits, restore fire fighting capabilities, fill street potholes, add open hours to existing libraries, or keep the Chargers in town with a new stadium.

Instead, Scott Mercer of City Redevelopment offered that a HUD inspector general audit had found the City had failed to properly document the mega-millions in loans to the Redevelopment Agency. HUD also found that the City had failed to ensure that the loans originating from federal Community Development Block Grant funds would ever be repaid. City Redevelopment therefore recommended that the massive loan amount be "extinguished" and made to go away. A concurrent recommendation would stop the City from collecting interest on the Redevelopment Agency loans owed to the City as of June 2009.

The HUD inspector general's audit was mentioned in the ongoing Scott Kessler wrongful termination lawsuit against the City of San Diego. In his lawsuit, Kessler alleges that he was fired after he became suspicious of financing arrangements in business improvement district activities around Little Italy (see Don Bauder's Scam Diego series on the Kessler lawsuit and the FBI investigations of Little Italy BID).

The postponement of the loan "extinguishing" to July 13 is only days after a scheduled July 9 Superior Court hearing on a City motion for protective order covering Mayor Jerry Sanders in the Kessler lawsuit.


More lawsuit-related Scam Diego items:

What a Tangled Web We Weave

Did Sanders Order Detective Reprimanded?

City Trying to Block Deposition of Sanders

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4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
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