More Westcor; What Will the Wahoos* in Our Current City Government Give Away Next?


*A Wahoo is a type of fish
The problem with the mall is that the original deal GY gave these guys is all one way to Westcor and when GY had the chance in 2009 to fix it they settled for $1.3 mil and pushed out any penalties until 2014. Then there is another optional push back potential for Westcor in 2014 where they can delay until 2016 with another $1.2 mil payment to the city.  Today, Westcor continues to collect nearly $75,000 per month ($900k per year) of your sales tax revenues because GY punted.

I’m certain that Westcor “assured” the GY guys on the other side of the table that they planned to start construction well before either the 2016 or the 2014 dates but they just needed the extra time as a “cushion”.  Did anyone from GY think to ask the question, “if you’re so sure you won’t need the time why are we writing it into the agreement?”  They’re known as ‘patsies’ in the business world.

Why didn’t GY negotiate harder?  After all, GY tells us that the bond payments by Westcor are, “guaranteed”.

But the bond payments, just like anything else in this world are really not “guaranteed”. That’s because Westcor can walk if it wants to if and when it feels it is throwing good money after bad.  And who is going to pay the assessments on the improved property? Nobody. Taxpayers. Do you think Georgia & Co. want to deal with that?

Well they should.  They should be out there right now trying to find another developer who is willing to take over the project for cents on the dollar so we can move on instead of having their public information officer write excuses in local papers for why they botched the prison episode.  They should certainly be doing that before they sit down with Westcor for the “downsizing” negotiations that Wally advised us are coming soon.

But why, you might ask, would Westcor have GY over a barrel?  Because GY, a $60 million per year revenue entity, has $47 mil at risk and by my calculations Westcor a $7 BILLION entity has something less than $22 mil at risk. It becomes a game of chicken and GY won’t play or rather they haven’t figured out how to yet, so Westcor will win. And you can be sure that Westcor knows that GY has another $250 mil in other debt that GY can’t pay.  These are smart guys who have had been successful in real, private sector jobs who find themselves negotiating across the table with government wahoos from the desert west of Phoenix.

You can find details of the Westcorp agreement and an explanation of how I’ve drawn my conclusions in other stories on my blog from April and June under, “Westcor Regional Mall”.  I’ve also included here 0689-A1 Westcor Dev Agrmnt Amendment  a copy of the amendment to the agreement that GY so smartly gave away the store with in 2009.

GY city council, you should read it and my other posts on this subject so you can try to understand what a mess GY has made of this whole thing and so you can intelligently question Fischbach and his crew who continue to give away our tax money to developers who have outsmarted them more than once.

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