Sunday, November 20, 2011

ZAP! #72: Interest and Oinking

ZAP! #72...November 19, 2011

Here we go again! Christmastime in McDougalville arrives in November.

The city council has called a Special Meeting for Tuesday, November 22, 2011, at 10:00 AM in the council conference room. The purpose of the meeting -- as noted below -- is to discuss and vote on:

1. Resolution - Approving a Chapter 380 Economic Development Program Agreement with Heritage District, LLC to Provide Funding for the Quarterly Interest Payment to Comerica Bank.

There are many questions that surround this ‘Special Meeting.’ The first of which is when did the Capo (Gonzalez) and city council first realize that this quarterly payment was coming due? Why didn’t the Capo or a city councilperson place this item on the regular council agenda last Thursday? Did the Capo or city council not want the item on the regular agenda due to the possibility of too many folks being at city hall for that meeting? Did the council not want to hear from citizens on yet another controversial topic involving spending millions of dollars that have yet to produce tangible results? How many folks who actually work for a living can attend a 10:00 AM meeting at city hall? Should all McDougal interest payments be classified by the EPA as a financial carcinogen?

While posting the agenda notice on Friday meets the deadline for conducting the Tuesday meeting, isn’t this a very convenient ruse to avoid publicity and media attention for a controversial issue? Really, a non-emergency item is posted on Friday as the citizenry begins the weekend break to only later discover (maybe) that the council is going to open the city’s ATM again for McDougal at 10:00AM on Tuesday with little or no publicity. By the way, what city fund will bear the cost (amount not specified in the agenda posting) of this interest payment?

Of course, when two members of Irving’s Lubbock Mafia (Gonzalez and McDougal) are involved, nothing should be taken for granted and nothing should surprise the citizenry. Maybe the Capo and city council have a new definition of transparency: Transparency with a strong glint of opaqueness. (please refrain from uncontrolled snickering)

For those not keeping up with the McDougal redevelopment (a.k.a. McDougalville in these postings) of Irving’s old downtown area, the CCR reflected the following in ZAP! #68 on October 23, 2011:

If the upcoming council meeting (October 27, 2011) was a knock-knock joke, the “Who’s there” punch line could be: Comerica bank needs another interest payment.

In October, staff of the CCR realized that this interest payment would be due, and we are not even paid mega-bucks to keep up with these things.

Also, as previously noted in the ZAP!, the city of Irving is the guarantee for all the McDougal loans in the Heritage District. At this stage, the city council has spent or loaned around $35 million for the pipe dream that continues to blow smoke and only leaves ashes on vacant pieces of property.

If McDougal doesn’t make timely interest or principal payments, then Comerica bank could look directly to the city should the loans be declared in default. Then, the city has to step up and pay the entire bill. The financial hook for this project remains deeply buried in the city’s wallet...which translates to Irving tax payers picking up the tab.

The end game to all this? The city council will again save McDougal’s bacon by forking over bucks to make his required interest payment; the Lubbock Mafia will light up another stogie and inform the citizenry - Forgetaboutit!; and the city council will spin a heaping of rationale and state that another ‘downtown study’ is going to clear all this up, since McDougalville will one day rival the Las Colinas urban center.

Hold that thought! We have to go grab our shotgun. Flying pig season just opened and we hear oinking up in the clouds

.………….Mark Holbrook

Ed. Note: There is a very interesting article (11.16.11) in the Avalanche Journal - Lubbock regarding Delbert McDougal and his current plans to develop a “cool place” in downtown Lubbock. The link to the article is listed below.

What makes this article interesting is that McDougal did not make his current interest payment for the Irving guaranteed loans totaling $27 million, yet he seems to be going full steam ahead in Lubbock with this redevelopment project. Considering how much McDougal has been paid over the years in consulting fees, real estate commissions, etc. by the city of Irving, one has to wonder how long the Irving city council is going to prop up his Heritage District pipe dream. Council members are expressing their ‘displeasure’ with the McDougal project, but when one looks at their voting records over the last several years, the council has been on the front line supporting this project without question!

Additionally, if - or when - the city assumes the entire loan package and the land McDougal purchased using these funds, there is another major hickey. Current estimates appear to reflect that the relative value of the property in the McDougal ‘land bank’ has a value of around $7 million. Let’s see how this computes: the city will owe a bank $27 million for property that can be currently sold for $7 million. To staff of the CCR, it appears that the only folks making out on this entire deal boondoggle is the Lubbock Mafia.

As a side note, McDougal’s spiel in the article regarding the Lubbock project sounds almost like the script could have been written by Billy Bob. Maybe they are twins separated at birth.

…………...Mark Holbrook (11.22.11)