TO END FOR NOW THE SEGMENT ON RULE OF LAW AND THE COSTS OF LOSING IT TO OUR SOCIETY, WE SEE IN BALTIMORE, THE SAME PRACTICES HAPPENING AS IF NO ECONOMIC COLLAPSE OCCURRED. REMEMBER, THESE BANKS AND THE 1% LOST ALMOST NOTHING AND IN FACT PROFITED FROM THE COLLAPSE AND WITH NO PENALTY OR REFORM, THEY ARE HARD AT IT AGAIN.
NOW THAT WE ARE AWARE OF THIS SYSTEMIC FRAUD WE CAN MORE EASILY SEE IT HAPPENING. I SPOKE WITH SOMEONE KNOWING THE GREAT YOUTH ORGANIZATION 'THE ALGEBRA PROJECT'. I HEARD THE STORY OF HOW THE ORGANIZATION FIRST TOOK THE TIME TO IDENTIFY $800 MILLION IN EDUCATION FUNDING THAT DIDN'T MAKE IT TO BALTIMORE AND THEN THEIR FIGHT IN COURT TO MAKE THE STATE PAY THESE LOSES.....THE COURT SIDED WITH ALGEBRA PROJECT. YOU WILL SEE THE PATTERN AS O'MALLEY PUSHED THE LEGAL ACTION WHILE CITY MAYOR AND THEN, WHEN GOVERNOR, REFUSED TO PAY.
'SAY WHAT THEY WANT TO HEAR AND THEN DO WHAT YOU WILL' SAYS LEO STRAUSS, POLITICAL PHILOSOPHER. O'MALLEY HAS FLIPPED SO MUCH WE ARE ALL WATCHING OUR SOCIETY FLOP.
AS THE YOUTH LOOKED FOR LEGAL COUNCIL TO ADVANCE THIS TO FEDERAL COURTS, THE ONLY ACTION LEFT WHEN THE STATE FAILS IN ITS DUTIES, THE YOUTH WAS TOLD ALL LAWYERS WORK FOR THE GOVERNOR.....AND HASN'T FOUND HELP IN TAKING THIS FURTHER. WE SEE IN BALTIMORE A WILLINGNESS TO IGNORE LAW IN ALL REGARDS....IT IS BIZARRE. SO THE CITY HAS $800 MILLION COMING IF WE CAN GET THE FEDERAL COURTS TO THROW O'MALLEY IN JAIL FOR CONTEMPT. REMEMBER, THE CITY HAS PLENTY OF MONEY, IT IS JUST CIRCUMVENTING THE GENERAL FUND.
A CONTEMPT FOR RULE OF LAW.......VOTE YOUR INCUMBENT OUT OF OFFICE
WE SEE BELOW A DELIBERATE SCHEME TO GET BUSINESS TAX BREAKS AND GRANTS FOR DEVELOPMENT BY CLAIMING TO BENEFIT THE UNDERSERVED AND THEN CREATING FALSE SITUATIONS AS REASONS NOT TO MEET THE OBLIGATIONS. I SPOKE AT LENGTH ABOUT THE EBDI-JOHNS HOPKINS PROJECT, AND BELOW YOU SEE THE ARTICLE BEING USED TO STOP THE PROJECT BEFORE MEETING THE GOAL PROMISED THE UNDERSERVED RESIDENTS. THIS WILLINGNESS TO CONSTANTLY UNDERMINE THE PEOPLE IN YOUR COMMUNITY MOST AT RISK IS COWARDLY AND IMMORAL......IN MOST CASES IT IS ILLEGAL AS WELL.
LASTLY, I WANT TO THANK ARNOLD JOLIVET OF THE MMCA FOR FINALLY DOING THE RIGHT THING AFTER STANDING IN FRONT OF THIS BOARD OF ESTIMATES WITH OVERWHELMING EVIDENCE OF CORRUPTION IN THE WAY THE CITY GIVES OUT CONTRACTS. THIS IS NOT ONLY A MINORITY BUSINESS PROBLEM, AS THESE AWARDS ARE OFTEN GOING TO NATIONAL COMPANIES UNDERMINING ALL LOCAL BUSINESS PEOPLE. WHAT THIS BOARD DOES IS TO GIVE THE BID TO A NATIONAL CORPORATION AND THEN ALLOWS THEM TO SUBCONTRACT TO NUMEROUS SMALLER COMPANIES.....SOME OF WHICH MAY BE FROM MARYLAND. IT ALSO INVOLVES PAYING QUITE A BIT MORE ON BIDS AND IT HAPPENS ALL THE TIME.
WHAT THIS DOES IS GIVE ALL DEVELOPMENT DECISIONS TO THAT NATIONAL COMPANY......WHY WOULD YOU WANT TO MAKE THE LOCAL BUSINESS OWNERS SUPPLIANTS TO THIS? AT THE SAME TIME, YOU LOSE THE KNOWLEDGE OF THE CITY THESE LOCAL BUSINESS PEOPLE HAVE IN DEVELOPING AND IMPLEMENTING THESE CONTRACTS.
HERE IS MY RESPONSE TO AN ARTICLE ON THIS IN THE BALTIMORE BREW:
I'd like to make the point that was critical in the discussion between this contractor and the Board that wasn't mentioned in the article: The Board has on several occasions given contractors chances to become compliant when a rule was not met. The argument given in this case was that since the bid was so much lower and a savings for the city, and since the business was in good standing with the city, why not allow the bid process be repeated so as to let this business man meet compliance rules as has been done in the past.
I think what most people know that attend these meetings is that the Board uses metrics for these decisions that can be so arbitrary as to send the decision to whomever they want regardless of qualifications and as history shows, it is indeed the same few that get all the city's contract business. If you tie this with the political contribution history shared in this article you see a system needing checks and balances.
That, I think was the point being made by the gentleman and his legal representative.
FOX NEWS----WBFF, BALTIMORE
The way Baltimore awards contracts is under fire again, but this time it is in the form of a multi-million dollar lawsuit, which alleges the process of handing out big bucks is broken. The Maryland Minority Contractors Association, Inc. 1 has filed a multimillion dollar lawsuit against the city alleging the city did not fairly bid out millions of dollars worth of contracts.
"To me, it's unacceptable. Unacceptable. We don't mind being excluded if we're not the low bidder," Arnold Jolivet, managing director of MMCA, Inc. 1, said. "It is just extraordinarily dumb the way the city awards contracts without a bid." Pless B. Jones, Sr., president of The Maryland Minority Contractors Association, Inc., sent a letter to city officials addressing the lawsuit. "We have been made aware that Arnold Jolivet, using the acronym MMCA, has filed suit against the Mayor and City Countil of Baltimore. This organization is not a party to and has nothing to do with that proceeding," Jones stated in the letter. "We would like nothing more than, for once and for all time to end the confusion surrounding our name." The lawsuit highlights a three hundred thousand dollar contract awarded to Greibo K Design for providing services for the city's 2012 African American Festival and a $43,000 contract awarded to Johnson Controls to investigate the city's energy consumption.
The lawsuit says both companies were awarded favoritism without advertising or competitive bidding. The lawsuit also alleges skirting the procurement process has cost taxpayers $50 million. Mayor Stephanie Rawlings-Blake says she has proven time and time again that this is not how her administration operates. "I think it's silly and it's unfortunate we've reached out to work with them on efforts to strengthen our minority and women owned business programs, they choose to sue instead," Mayor Rawlings-Blake said Aug. 2. "It's baseless. And, I'm looking forward to having the courts say that as well." The minority contractors say they are asking for an injunction that would prohibit the city from awarding any contracts until this matter is resolved.
"When African-American businesses aren't getting contracts, they don't hire people within their community where their business is located. As a result of that, mothers and fathers don't work and children don't eat.," Rev. C.D. Witherspoon, president of the Southern Christian Leadership Council's Baltimore chapter, said. "When we hear about an African-American business presenting a lower bid, and the city deciding to go with the higher bid, we begin to wonder and question why." Thursday, September 6 2012, 06:30 PM EDT
_____________________________________________________
YOU WANT THESE KIDS TO SUCCEED AND GROW AND THEY ARE......WHY ARE THERE SO MANY WHITE ORGANIZATIONS SAYING THEY ARE WORKING FOR THE BLACK COMMUNITY I HEARD THE HEAD OF ANOTHER JUSTICE ORGANIZATION ASK......THE ALGEBRA PROJECT GETS AWAY FROM THAT.
THE ANSWER: YOU CAN CONTROL THE OUTCOME AND KEEP LEADERSHIP IN CHECK.
The Problem The Baltimore Algebra Project
is a youth-run nonprofit organization that works to build math literacy within several communities in Baltimore City. The socioeconomic status of inner-city youth needs to increase. Employment of the Baltimore Algebra Project and our advocacy work are steps to raising math literacy and socioeconomic status. Our larger goal is Quality Education as a Constitutional Right; since 2004 the Baltimore Algebra Project has been organizing for the adequate funding of Baltimore City Public Schools –funding that is owed to the school system.
________________________________________________
BELOW YOU SEE THE SYSTEM OF SETTING THE CITY UP FOR WALL STREET GAINS HAS NOT SKIPPED A BEAT AS THE MAYOR USES A BOND SCHEME TO LEVERAGE COSTS FOR A BILLION DOLLAR COMPANY. IT IS TRULY OBSCENE. AT THE SAME TIME WE ARE HEARING THAT PROJECTS THAT INVOLVE LOW/MODERATE INCOME HOUSING MAY NOT BE FINANCED DUE TO CITY GOVERNMENT BUDGET CONSTRAINTS. IN THIS CASE, THE PART OF THE ENTERPRISE ZONE DEAL THAT INCLUDES THE REQUIREMENT THAT UNDERSERVED BE SERVED IN THE DEVELOPMENT IS GOING TO BE SHELVED AS ALL THE AFFLUENT DEVELOPMENT IS FINISHED. THIS IS FRAUD.
THE BOND ISSUE WILL BE FRAUD.
There are two aspects: a) The cost of the leverage and b) The effect on the bonds. Effect b) is the greater effect.
As you point out the cost of the leverage will increase and this is a direct cost to the fund. An increase of 1% in interest rates should decrease the dividends from the fund by 1%*(leverage - 1)/leverage. Hence if leverage = 2x the funds dividends should decrease by 0.5%.
The bonds are highly affected by rising interest rates. If the duration of the bonds is 5 years on average, then an increase in interest rates of 1% lead to a 5% decrease in the value of the bonds. In a 2x fund, this is an immediate decrease in the fund value of 10%.
As you say, ".. in a rising interest rate environment, leveraged bond funds will lose principal and will generate less income."
Another point to make is that in its plethora of enterprise zone designation for luxury development, it looks as though UnderArmour was placed into that category.....which means it will not be paying any property tax for years (other than the undeveloped land tax). So will they actually be using property tax paid by UnderArmour to pay down this debt that will explode as interest rates rise?
From your article on Harbor Point:
In another action, the council unanimously gave approval to an expanded tax zone benefiting Under Armour's complex in Locust Point.
City Council gives preliminary approval to Harbor Point tax break Mosby, Stokes vote against deal By Luke Broadwater The Baltimore Sun 7:00 a.m. EDT, September 11, 2012
The Baltimore City Council gave preliminary approval on Monday to a proposal for a decade of tax breaks for Harbor Point, the future home of Exelon Corp.'s Baltimore headquarters.
Two council members, Nick Mosby and Carl Stokes, voted against including John Paterakis' Harbor East Development Group LLC's latest project in a state-wide tax credit program for economically disadvantaged areas. But the majority of the 14-member council approved the plan, which calls for the roughly 32-acre Harbor Point site to be included in Baltimore's Enterprise Zone. The measure will be up for a final vote at the next council meeting.
City Councilman James Kraft, a supporter of the proposal, said the tax breaks are needed because it's a "very difficult parcel to develop" that presents "unique challenges." Formerly the site of a chromium plant, the area could have problems with chemicals in the ground, Kraft said.
If the council approves Harbor Point's application, the Baltimore Development Corporation said, it expects to submit the expansion request to the state agency in mid-October.
Inclusion in the Enterprise Zone would make Harbor Point eligible for 10-years of local property tax credits based on the amount of capital invested in the property. The state reimburses local governments for half of the property tax revenue lost due to the credit.
The Harbor East Development Group expects that construction at Harbor Point will take place in phases over a 10-year period. The final complex on the site is to include 1.5 million square feet of office space, 1,000 residential units, 230,000 square feet of retail space, an 86,000-square-foot hotel and 3,000 parking spaces, the application said.
In another action, the council unanimously gave approval to an expanded tax zone benefiting Under Armour's complex in Locust Point.
_____________________________________________
Sadly, Baltimore Sun mainly prints whatever script the city hands it. We occasionally get an investigative bone. Below you'll see the scheme used by the East Baltimore Development Corporation (EDBI-Johns Hopkins) to circumvent the Enterprise Zone requirements as addressing the underserved. We saw a massive affluent complex built in this Enterprise Zone; for years the financing poured in. When they were finished, the city simply needed to claim 'no funds' to keep the low-income part of the project from being built. We have billions of dollars coming into the city in development money, yet we never seem to be able to come across with anything other than a cursory build for citizens living in the 'Enterprise Zone'.
Huge drop' in funding for community development In Baltimore and elsewhere, cuts fuel anxiety over fate of revitalization efforts By Jamie Smith Hopkins, The Baltimore Sun September 20, 2012
The City Arts Apartments are full of artists who live and work in the Baltimore complex, built on what long had been a vacant lot in a very vacant neighborhood. But a sudden gap in its development financing almost kept the project from getting off the ground.
The $2.5 million hole was dug by the financial crisis, which pummeled the value of tax credits that many affordable-housing projects rely on. The post-crisis landscape for community development is shaping up to be even more challenging.
Government funding for work to revitalize neighborhoods is plummeting nationwide amid pressure to cut budgets, increasing the odds of gaps that cannot be overcome. It's a prospect that alarms practitioners in Baltimore, where the battle against vacant housing and blight has raged for decades.
The city got 30 percent less this year from the two major federal programs for revitalization — the Community Development Block Grant and HOME Investment Partnerships — than it received just before the recession. Compared with a decade ago, funding is down by nearly half. That's not even accounting for the value-sapping effect of inflation.
Baltimore Housing Commissioner Paul T. Graziano said he expects no more next year than this year's $21 million allotment, and he's concerned that further cuts will come.
"It's a huge drop," he said. "That's the new norm — at best."
His agency estimates that HOME reductions will slash the amount of housing construction the city can help fund from 300 to 350 units a year to 130 or 140. Community Development Block Grant cuts have squeezed nonprofits trying to strengthen neighborhoods with services such as literacy education as well as city programs that help residents buy homes, Graziano said.
But shrinking grants could be just the beginning. Community developers fear that federal income tax credits used to help pay for affordable housing and other construction efforts will be cut out of the tax code if increasing calls for tax overhaul bear fruit.
The best known is the 25-year-old Low Income Housing Tax Credit, which generates about $8 billion annually to build apartments and rental homes. States distribute their allocations of the credits to nonprofits and other developers, which in turn sell them to companies looking to offset profits. The cash helps fund construction.
Columbia-based Enterprise Community Partners, which pools investor capital for tax-credit purchases, is making the rounds in Congress to advocate for the programs' survival. The nonprofit group expects to see serious discussion of tax reform next year — no matter which presidential candidate wins the election in November.
"Those in the housing and community-development world should be on notice," said Peter Lawrence, Enterprise's senior director of public policy and government affairs.
Charles Duff, president of Jubilee Baltimore, one of three nonprofit groups that worked on the City Arts project in Station North, had a taste of what life might be like without the Low Income Housing Tax Credit when its value slumped in 2008. So many companies were losing money that the market to buy credits to offset profits all but collapsed.
An infusion of temporary stimulus money plugged City Arts' $2.5 million hole, Duff said, or the fully occupied apartment complex wouldn't have been built and couldn't have kicked off other development nearby. He doesn't want to see the credit shrink or disappear.
"Baltimore is literally at a crossroads," Duff said. "If the rest of the country will keep us in the game through the next boom, whenever that comes, we'll be OK and we won't need their help anymore. And if they back out and say, 'We're going to leave you to your own devices,' they're going to have to pay for our poverty for the rest of time."
Baltimoreans United in Leadership Development believes in the power of construction to turn a neighborhood around. It organized local congregations a dozen years ago to attack abandonment and crime in East Baltimore's Oliver neighborhood. Nearly 100 rowhomes have been reconstructed through a collaboration between BUILD and TRF Development Partners, an arm of neighborhood revitalization financier the Reinvestment Fund.
"It just means the community comes alive again, people come outside again, people believe in their community again," said Terrell Williams, a BUILD organizer, as he walked the neighborhood with its mix of homes waiting for construction, under way and redone.
The redeveloping area is called Preston Place, just north of Johns Hopkins Hospital, and will have 125 rebuilt homes in phase one. The goal is then to redo 100 more, dropping vacancy from 50 percent at the start of the project to 8 percent — a neighborhood housing market that could stand on its own. But finding funding will be tricky.
Money that helped launch the effort is from a federal program that no longer exists, said Sean Closkey, president of TRF Development Partners. The project was able to get stimulus funds aimed at foreclosure-heavy neighborhoods, but that money will run out in March. And HOME funds are scarce.
Twenty-seven percent of the project's budget comes from federal funds, Closkey said. About 13 percent comes from philanthropists. That bridges the gap between the cost to redevelop and current market values, the amount banks are willing to lend to buyers moving in. BUILD and TRF see that public and private financial help as the only way to pull the neighborhood out of a vicious cycle: Values are low because so many homes are in disrepair, and they're in disrepair because values are low.
"Someone must break that cycle," Closkey said.
NOW THAT WE ARE AWARE OF THIS SYSTEMIC FRAUD WE CAN MORE EASILY SEE IT HAPPENING. I SPOKE WITH SOMEONE KNOWING THE GREAT YOUTH ORGANIZATION 'THE ALGEBRA PROJECT'. I HEARD THE STORY OF HOW THE ORGANIZATION FIRST TOOK THE TIME TO IDENTIFY $800 MILLION IN EDUCATION FUNDING THAT DIDN'T MAKE IT TO BALTIMORE AND THEN THEIR FIGHT IN COURT TO MAKE THE STATE PAY THESE LOSES.....THE COURT SIDED WITH ALGEBRA PROJECT. YOU WILL SEE THE PATTERN AS O'MALLEY PUSHED THE LEGAL ACTION WHILE CITY MAYOR AND THEN, WHEN GOVERNOR, REFUSED TO PAY.
'SAY WHAT THEY WANT TO HEAR AND THEN DO WHAT YOU WILL' SAYS LEO STRAUSS, POLITICAL PHILOSOPHER. O'MALLEY HAS FLIPPED SO MUCH WE ARE ALL WATCHING OUR SOCIETY FLOP.
AS THE YOUTH LOOKED FOR LEGAL COUNCIL TO ADVANCE THIS TO FEDERAL COURTS, THE ONLY ACTION LEFT WHEN THE STATE FAILS IN ITS DUTIES, THE YOUTH WAS TOLD ALL LAWYERS WORK FOR THE GOVERNOR.....AND HASN'T FOUND HELP IN TAKING THIS FURTHER. WE SEE IN BALTIMORE A WILLINGNESS TO IGNORE LAW IN ALL REGARDS....IT IS BIZARRE. SO THE CITY HAS $800 MILLION COMING IF WE CAN GET THE FEDERAL COURTS TO THROW O'MALLEY IN JAIL FOR CONTEMPT. REMEMBER, THE CITY HAS PLENTY OF MONEY, IT IS JUST CIRCUMVENTING THE GENERAL FUND.
A CONTEMPT FOR RULE OF LAW.......VOTE YOUR INCUMBENT OUT OF OFFICE
WE SEE BELOW A DELIBERATE SCHEME TO GET BUSINESS TAX BREAKS AND GRANTS FOR DEVELOPMENT BY CLAIMING TO BENEFIT THE UNDERSERVED AND THEN CREATING FALSE SITUATIONS AS REASONS NOT TO MEET THE OBLIGATIONS. I SPOKE AT LENGTH ABOUT THE EBDI-JOHNS HOPKINS PROJECT, AND BELOW YOU SEE THE ARTICLE BEING USED TO STOP THE PROJECT BEFORE MEETING THE GOAL PROMISED THE UNDERSERVED RESIDENTS. THIS WILLINGNESS TO CONSTANTLY UNDERMINE THE PEOPLE IN YOUR COMMUNITY MOST AT RISK IS COWARDLY AND IMMORAL......IN MOST CASES IT IS ILLEGAL AS WELL.
LASTLY, I WANT TO THANK ARNOLD JOLIVET OF THE MMCA FOR FINALLY DOING THE RIGHT THING AFTER STANDING IN FRONT OF THIS BOARD OF ESTIMATES WITH OVERWHELMING EVIDENCE OF CORRUPTION IN THE WAY THE CITY GIVES OUT CONTRACTS. THIS IS NOT ONLY A MINORITY BUSINESS PROBLEM, AS THESE AWARDS ARE OFTEN GOING TO NATIONAL COMPANIES UNDERMINING ALL LOCAL BUSINESS PEOPLE. WHAT THIS BOARD DOES IS TO GIVE THE BID TO A NATIONAL CORPORATION AND THEN ALLOWS THEM TO SUBCONTRACT TO NUMEROUS SMALLER COMPANIES.....SOME OF WHICH MAY BE FROM MARYLAND. IT ALSO INVOLVES PAYING QUITE A BIT MORE ON BIDS AND IT HAPPENS ALL THE TIME.
WHAT THIS DOES IS GIVE ALL DEVELOPMENT DECISIONS TO THAT NATIONAL COMPANY......WHY WOULD YOU WANT TO MAKE THE LOCAL BUSINESS OWNERS SUPPLIANTS TO THIS? AT THE SAME TIME, YOU LOSE THE KNOWLEDGE OF THE CITY THESE LOCAL BUSINESS PEOPLE HAVE IN DEVELOPING AND IMPLEMENTING THESE CONTRACTS.
HERE IS MY RESPONSE TO AN ARTICLE ON THIS IN THE BALTIMORE BREW:
I'd like to make the point that was critical in the discussion between this contractor and the Board that wasn't mentioned in the article: The Board has on several occasions given contractors chances to become compliant when a rule was not met. The argument given in this case was that since the bid was so much lower and a savings for the city, and since the business was in good standing with the city, why not allow the bid process be repeated so as to let this business man meet compliance rules as has been done in the past.
I think what most people know that attend these meetings is that the Board uses metrics for these decisions that can be so arbitrary as to send the decision to whomever they want regardless of qualifications and as history shows, it is indeed the same few that get all the city's contract business. If you tie this with the political contribution history shared in this article you see a system needing checks and balances.
That, I think was the point being made by the gentleman and his legal representative.
FOX NEWS----WBFF, BALTIMORE
The way Baltimore awards contracts is under fire again, but this time it is in the form of a multi-million dollar lawsuit, which alleges the process of handing out big bucks is broken. The Maryland Minority Contractors Association, Inc. 1 has filed a multimillion dollar lawsuit against the city alleging the city did not fairly bid out millions of dollars worth of contracts.
"To me, it's unacceptable. Unacceptable. We don't mind being excluded if we're not the low bidder," Arnold Jolivet, managing director of MMCA, Inc. 1, said. "It is just extraordinarily dumb the way the city awards contracts without a bid." Pless B. Jones, Sr., president of The Maryland Minority Contractors Association, Inc., sent a letter to city officials addressing the lawsuit. "We have been made aware that Arnold Jolivet, using the acronym MMCA, has filed suit against the Mayor and City Countil of Baltimore. This organization is not a party to and has nothing to do with that proceeding," Jones stated in the letter. "We would like nothing more than, for once and for all time to end the confusion surrounding our name." The lawsuit highlights a three hundred thousand dollar contract awarded to Greibo K Design for providing services for the city's 2012 African American Festival and a $43,000 contract awarded to Johnson Controls to investigate the city's energy consumption.
The lawsuit says both companies were awarded favoritism without advertising or competitive bidding. The lawsuit also alleges skirting the procurement process has cost taxpayers $50 million. Mayor Stephanie Rawlings-Blake says she has proven time and time again that this is not how her administration operates. "I think it's silly and it's unfortunate we've reached out to work with them on efforts to strengthen our minority and women owned business programs, they choose to sue instead," Mayor Rawlings-Blake said Aug. 2. "It's baseless. And, I'm looking forward to having the courts say that as well." The minority contractors say they are asking for an injunction that would prohibit the city from awarding any contracts until this matter is resolved.
"When African-American businesses aren't getting contracts, they don't hire people within their community where their business is located. As a result of that, mothers and fathers don't work and children don't eat.," Rev. C.D. Witherspoon, president of the Southern Christian Leadership Council's Baltimore chapter, said. "When we hear about an African-American business presenting a lower bid, and the city deciding to go with the higher bid, we begin to wonder and question why." Thursday, September 6 2012, 06:30 PM EDT
_____________________________________________________
YOU WANT THESE KIDS TO SUCCEED AND GROW AND THEY ARE......WHY ARE THERE SO MANY WHITE ORGANIZATIONS SAYING THEY ARE WORKING FOR THE BLACK COMMUNITY I HEARD THE HEAD OF ANOTHER JUSTICE ORGANIZATION ASK......THE ALGEBRA PROJECT GETS AWAY FROM THAT.
THE ANSWER: YOU CAN CONTROL THE OUTCOME AND KEEP LEADERSHIP IN CHECK.
The Problem The Baltimore Algebra Project
is a youth-run nonprofit organization that works to build math literacy within several communities in Baltimore City. The socioeconomic status of inner-city youth needs to increase. Employment of the Baltimore Algebra Project and our advocacy work are steps to raising math literacy and socioeconomic status. Our larger goal is Quality Education as a Constitutional Right; since 2004 the Baltimore Algebra Project has been organizing for the adequate funding of Baltimore City Public Schools –funding that is owed to the school system.
________________________________________________
BELOW YOU SEE THE SYSTEM OF SETTING THE CITY UP FOR WALL STREET GAINS HAS NOT SKIPPED A BEAT AS THE MAYOR USES A BOND SCHEME TO LEVERAGE COSTS FOR A BILLION DOLLAR COMPANY. IT IS TRULY OBSCENE. AT THE SAME TIME WE ARE HEARING THAT PROJECTS THAT INVOLVE LOW/MODERATE INCOME HOUSING MAY NOT BE FINANCED DUE TO CITY GOVERNMENT BUDGET CONSTRAINTS. IN THIS CASE, THE PART OF THE ENTERPRISE ZONE DEAL THAT INCLUDES THE REQUIREMENT THAT UNDERSERVED BE SERVED IN THE DEVELOPMENT IS GOING TO BE SHELVED AS ALL THE AFFLUENT DEVELOPMENT IS FINISHED. THIS IS FRAUD.
THE BOND ISSUE WILL BE FRAUD.
There are two aspects: a) The cost of the leverage and b) The effect on the bonds. Effect b) is the greater effect.
As you point out the cost of the leverage will increase and this is a direct cost to the fund. An increase of 1% in interest rates should decrease the dividends from the fund by 1%*(leverage - 1)/leverage. Hence if leverage = 2x the funds dividends should decrease by 0.5%.
The bonds are highly affected by rising interest rates. If the duration of the bonds is 5 years on average, then an increase in interest rates of 1% lead to a 5% decrease in the value of the bonds. In a 2x fund, this is an immediate decrease in the fund value of 10%.
As you say, ".. in a rising interest rate environment, leveraged bond funds will lose principal and will generate less income."
Another point to make is that in its plethora of enterprise zone designation for luxury development, it looks as though UnderArmour was placed into that category.....which means it will not be paying any property tax for years (other than the undeveloped land tax). So will they actually be using property tax paid by UnderArmour to pay down this debt that will explode as interest rates rise?
From your article on Harbor Point:
In another action, the council unanimously gave approval to an expanded tax zone benefiting Under Armour's complex in Locust Point.
City Council gives preliminary approval to Harbor Point tax break Mosby, Stokes vote against deal By Luke Broadwater The Baltimore Sun 7:00 a.m. EDT, September 11, 2012
The Baltimore City Council gave preliminary approval on Monday to a proposal for a decade of tax breaks for Harbor Point, the future home of Exelon Corp.'s Baltimore headquarters.
Two council members, Nick Mosby and Carl Stokes, voted against including John Paterakis' Harbor East Development Group LLC's latest project in a state-wide tax credit program for economically disadvantaged areas. But the majority of the 14-member council approved the plan, which calls for the roughly 32-acre Harbor Point site to be included in Baltimore's Enterprise Zone. The measure will be up for a final vote at the next council meeting.
City Councilman James Kraft, a supporter of the proposal, said the tax breaks are needed because it's a "very difficult parcel to develop" that presents "unique challenges." Formerly the site of a chromium plant, the area could have problems with chemicals in the ground, Kraft said.
If the council approves Harbor Point's application, the Baltimore Development Corporation said, it expects to submit the expansion request to the state agency in mid-October.
Inclusion in the Enterprise Zone would make Harbor Point eligible for 10-years of local property tax credits based on the amount of capital invested in the property. The state reimburses local governments for half of the property tax revenue lost due to the credit.
The Harbor East Development Group expects that construction at Harbor Point will take place in phases over a 10-year period. The final complex on the site is to include 1.5 million square feet of office space, 1,000 residential units, 230,000 square feet of retail space, an 86,000-square-foot hotel and 3,000 parking spaces, the application said.
In another action, the council unanimously gave approval to an expanded tax zone benefiting Under Armour's complex in Locust Point.
_____________________________________________
Sadly, Baltimore Sun mainly prints whatever script the city hands it. We occasionally get an investigative bone. Below you'll see the scheme used by the East Baltimore Development Corporation (EDBI-Johns Hopkins) to circumvent the Enterprise Zone requirements as addressing the underserved. We saw a massive affluent complex built in this Enterprise Zone; for years the financing poured in. When they were finished, the city simply needed to claim 'no funds' to keep the low-income part of the project from being built. We have billions of dollars coming into the city in development money, yet we never seem to be able to come across with anything other than a cursory build for citizens living in the 'Enterprise Zone'.
Huge drop' in funding for community development In Baltimore and elsewhere, cuts fuel anxiety over fate of revitalization efforts By Jamie Smith Hopkins, The Baltimore Sun September 20, 2012
The City Arts Apartments are full of artists who live and work in the Baltimore complex, built on what long had been a vacant lot in a very vacant neighborhood. But a sudden gap in its development financing almost kept the project from getting off the ground.
The $2.5 million hole was dug by the financial crisis, which pummeled the value of tax credits that many affordable-housing projects rely on. The post-crisis landscape for community development is shaping up to be even more challenging.
Government funding for work to revitalize neighborhoods is plummeting nationwide amid pressure to cut budgets, increasing the odds of gaps that cannot be overcome. It's a prospect that alarms practitioners in Baltimore, where the battle against vacant housing and blight has raged for decades.
The city got 30 percent less this year from the two major federal programs for revitalization — the Community Development Block Grant and HOME Investment Partnerships — than it received just before the recession. Compared with a decade ago, funding is down by nearly half. That's not even accounting for the value-sapping effect of inflation.
Baltimore Housing Commissioner Paul T. Graziano said he expects no more next year than this year's $21 million allotment, and he's concerned that further cuts will come.
"It's a huge drop," he said. "That's the new norm — at best."
His agency estimates that HOME reductions will slash the amount of housing construction the city can help fund from 300 to 350 units a year to 130 or 140. Community Development Block Grant cuts have squeezed nonprofits trying to strengthen neighborhoods with services such as literacy education as well as city programs that help residents buy homes, Graziano said.
But shrinking grants could be just the beginning. Community developers fear that federal income tax credits used to help pay for affordable housing and other construction efforts will be cut out of the tax code if increasing calls for tax overhaul bear fruit.
The best known is the 25-year-old Low Income Housing Tax Credit, which generates about $8 billion annually to build apartments and rental homes. States distribute their allocations of the credits to nonprofits and other developers, which in turn sell them to companies looking to offset profits. The cash helps fund construction.
Columbia-based Enterprise Community Partners, which pools investor capital for tax-credit purchases, is making the rounds in Congress to advocate for the programs' survival. The nonprofit group expects to see serious discussion of tax reform next year — no matter which presidential candidate wins the election in November.
"Those in the housing and community-development world should be on notice," said Peter Lawrence, Enterprise's senior director of public policy and government affairs.
Charles Duff, president of Jubilee Baltimore, one of three nonprofit groups that worked on the City Arts project in Station North, had a taste of what life might be like without the Low Income Housing Tax Credit when its value slumped in 2008. So many companies were losing money that the market to buy credits to offset profits all but collapsed.
An infusion of temporary stimulus money plugged City Arts' $2.5 million hole, Duff said, or the fully occupied apartment complex wouldn't have been built and couldn't have kicked off other development nearby. He doesn't want to see the credit shrink or disappear.
"Baltimore is literally at a crossroads," Duff said. "If the rest of the country will keep us in the game through the next boom, whenever that comes, we'll be OK and we won't need their help anymore. And if they back out and say, 'We're going to leave you to your own devices,' they're going to have to pay for our poverty for the rest of time."
Baltimoreans United in Leadership Development believes in the power of construction to turn a neighborhood around. It organized local congregations a dozen years ago to attack abandonment and crime in East Baltimore's Oliver neighborhood. Nearly 100 rowhomes have been reconstructed through a collaboration between BUILD and TRF Development Partners, an arm of neighborhood revitalization financier the Reinvestment Fund.
"It just means the community comes alive again, people come outside again, people believe in their community again," said Terrell Williams, a BUILD organizer, as he walked the neighborhood with its mix of homes waiting for construction, under way and redone.
The redeveloping area is called Preston Place, just north of Johns Hopkins Hospital, and will have 125 rebuilt homes in phase one. The goal is then to redo 100 more, dropping vacancy from 50 percent at the start of the project to 8 percent — a neighborhood housing market that could stand on its own. But finding funding will be tricky.
Money that helped launch the effort is from a federal program that no longer exists, said Sean Closkey, president of TRF Development Partners. The project was able to get stimulus funds aimed at foreclosure-heavy neighborhoods, but that money will run out in March. And HOME funds are scarce.
Twenty-seven percent of the project's budget comes from federal funds, Closkey said. About 13 percent comes from philanthropists. That bridges the gap between the cost to redevelop and current market values, the amount banks are willing to lend to buyers moving in. BUILD and TRF see that public and private financial help as the only way to pull the neighborhood out of a vicious cycle: Values are low because so many homes are in disrepair, and they're in disrepair because values are low.
"Someone must break that cycle," Closkey said.
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