Macerich and the Mall by guest blogger Homer Leroy

Editor’s note: Guest blogger Homer Leroy has done some research on wildly profitable Macerich, the folks who GEOrgia keeps telling us are going to build a mall in GY “any day now”.  The same folks who got GY to spend up to $71 million  of your money to put in the infrastructure for Macerich’s mall, the same folks who are collecting HALF of all sales taxes paid to GY at the existing shopping center which preceded the mall at the corner of PC Parkway and McDowell.  GEOrgia and city council praise Macerich, tell voters that Macerich is “working with GY” to bring a mall here just as soon as possible and that they are “good corporate citizens.”

HA!  The only good corporate citizenship about Macerich is that THEY WATCH OUT FOR THEIR SHAREHOLDERS!  Just as a good private company should.  Is Macerich in the mall business to help out little old GY?

Read Homer’s article and you decide.

Stupid is as stupid does, GEOrgia.

Macerich Plays Hardball  by Homer Leroy
Macerich Co. faces foreclosure on Fiesta Mall in Mesa, they already had a Mall in Prescott foreclosed on, and they have sold interests in numerous other Arizona properties recently.  It’s called the “profit” motive, and I don’t blame them for doing the best for their shareholders.  Should GY expect Macerich to behave in GY’s best interest like GEOrgia and GY city council seem to want us to believe? Here are some FACTS to consider before you answer that question.

Common knowledge is, if you asked a GY city council member or executive city employee they would tell you how great the planned Estrella Falls mall is coming along, and how accommodating, splendid, and caring about the future of GY the nice folks at Macerich are.  Just that pesky recession.
What recession? By economist’s standards the recession ended over 3 years ago in mid 2009 to early 2010 depending on whom you ask. So what is keeping bulldozers from pushing dirt tomorrow? As in most measures requiring a shred of business savvy, your council is ill-prepared and easily outwitted by the anything but benevolent Macerich, a publicly traded REIT (Real Estate Investment Trust) out of Santa Monica, CA.
Macerich’s Fiesta Mall, Mesa.
Fiesta Mall is currently only worth $39.5 million – a huge dip from the $140.6 million appraisal value of 2004, which is when Macerich Co. purchased the property for $135.3 million.  According to the Phoenix Business Journal, Macerich owes $84 Million on the property with a Note coming due next year.  The Lenders (Bank of America was the lead bank on the Commercial Mortgage Backed Security transaction at origination)  has transferred the loan to a special servicer (aka, someone who will restructure or more likely set up and run the foreclosure and post foreclosure auction process, the article notes that the servicer has notated the loan as “foreclosure” status since April). Link to the article:
Other Macerich AZ Transactions
Perhaps more telling about Macerich’s feelings about the Arizona market and their commitment to it are the following property transactions in the past year:According to Macerich’s 10-Q filing for the first quarter, the REIT sold its 50 percent interests in the Chandler Village Center and the Chandler Festival community center in March last year. The REIT and its joint venture partner also sold the SanTan Village Power Center in Gilbert that same month. In April last year, it sold The Borgata in Scottsdale — which now is being razed for future development of a condominium complex by Scottsdale-based AV Homes Inc. — as a way to pay down its line of credit and for other “general corporate purposes,” the filing said. (my words: PAY DOWN CREDIT LINE are the key words- Macerich’s lenders are not happy with it and are requiring them to dispose of assets to pay down its debt)In May, Macerich sold the Hilton Village community center in Scottsdale and its 50 percent interest in the Chandler Gateway community center. Also that month, the REIT conveyed the Prescott Gateway shopping center to the lender “by a deed-in-lieu of foreclosure.”What this shows, is that this $8.5 Billion market cap REIT (ticker symbol MAC), who has lost one Mall (Prescott Gateway) to foreclosure and is about to lose another (Fiesta Mall in Mesa), who has been selling performing properties in Arizona to raise cash to de-leverage its Balance Sheet, cares only about what is best for its stockholders via its share price.  (Duh! that is the point of capitalism, GY do you understand that?  Getting stupid cities to give you stuff for free is good for the shareholders.)  The company was so far underwater on the Prescott Mall, and is so far underwater on Fiesta Mall in Mesa that simply letting them go is the right business decision  and they have no problem going that route and screwing over whomever that may impact in the local community. They structure loans, intelligently, that only the single purpose entity holding title to the mall pledged borrows, the parent company does not, so it does not negatively affect their corporate credit rating.

How This Applies to GY Estrella Falls Property
Since the development of the Estrella Falls mall may remain economically unfeasible in Macerich’s eyes, they certainly will have no problem sticking GY will the tab of the infrastructure improvements the City floated on its own dime. Heck, they profit by continuing the current arrangement where they pay nominal interest payments to the city while they collect much more each year in sales tax revenue from the existing shopping center.  They didn’t put up the capital for the infrastructure, YOU DID.  They did not think twice to stick the Banks that made the CMBS loans on Prescott Gateway or Fiesta Mall when the market moved against them.  The company reported $18MM of Net Income for the quarter ended 3/31/13, and had $69MM in unrestricted cash on its Balance Sheet at the end of the quarter as well per its SEC filling for that period.  GY better start playing big boy baseball with Macerich and pushing the issue on development or pushing them out of their land position to someone who will. As mentioned prior, GY already blew it by not attracting Tanger Outlets who located at Westgate in Glendale, well after the Estrella Falls project was stalled out.

Anyone want to bet that there will be renewed announcements from city hall just before the next election that, “the mall is about to be built”.  Dream on, GEOrgia.  Politics or unbridled stupidity, you be the judge.

Homer Leroy

Mall, What Mall? We Weren’t Counting on the Mall

In an act of breathtaking arrogance exceeding even that of  Georgia telling you she didn’t know about or encourage the prison expansion, and demonstrating a complete and utter disrespect for the intelligence of residents of Goodyear, city manager John Fischbach recently spent your money to send you an article in GY’s Infocus Magazine to tell you that the mall doesn’t matter and nobody in the city has been counting on it.

Really.  Here’s Fischbach’s article.  Infocus Feb 20120001

Do you feel insulted enough yet to do something about this city’s government in the next election?

As a Goodyear resident, I sent the following email to Mr. Fischbach.  Feel free to send your own.  I wonder if any of us dopes will get a reply from anyone in Goodyear or the drive by media who I also copied?

From:  <hdb…>
Date: Fri, Feb 24, 2012 at 11:41 AM
Subject: Taxpayer Paid For Government Propaganda
To: “John F. Fischbach” <>
Cc:,,,,,,,, Jim Painter <>, “Dokes, Jennifer” <>,,,,,,,,,,,,,,,,,,,,

Subject: Your Recent InFocus Article (copy attached)

Dear Mr. Fischbach;
In your recent article in the city of Goodyear’s taxpayer paid for, political propaganda instrument the Infocus Magazine, you refer to the GY budget when you state;

1.  “As we have prepared early estimates of future years, we have NOT included anticipated revenue from the mall”. (emphasis yours).

Your statement directly contradicts what you and Larry Lange presented to the GY city council on October 17 in a work session regarding GY’s financial future and a financial forecasting model presented by the GY Finance Dept. The back up documents and particularly the spreadsheets used to prepare said presentation that you made to council that night and which I obtained after submitting a records request to the city (only after I enlisted the Goldwater Institute to assist me in getting GY to deliver those spreadsheets after GY at first refused) are also directly contradicted by your statement published in a city of Goodyear official publication.

As I reported in my blog ( you and Mr.Lange presented slides to GY council based upon Mr. Lange’s spreadsheets. In those spreadsheets which you can see here;
(  )

(column P, General Fund spreadsheet) you forecast that from FY 2014 to FY 2015 GY’s revenues would increase by nearly $7 million or nearly an 11% increase and following years increase at rates of 5% and 7%.  That is precisely the year (per your own spreadsheet cell P26, **Mall ) that your financial model counted on the mall to be completed and open for business. Compare this to other yearly increases prior to the mall start up prediction in the same spreadsheet of only 2% to 3%.

Video taped questions and comments made by mayor Osborne during that same Oct 17 work session and “shushed” by then mayor Lord and not contradicted by either you or Mr. Lange during the Oct 17 meeting left the distinct impression with the viewer that if the mall did not start up on time based upon GY’s financial model, which showed council that GY could just squeak through while relying on additional mall revenues, then GY’s financial future would be in dire straights.

2. In your same Infocus article, you state;

“We have spent no money on the mall… Because of the improvement district”.

That is complete and utter nonsense, Mr. Fischbach as you well know.  According to your own 2012 budget document attached for reference at the end of this article on my blog;,

on page 82, you show that the city of Goodyear borrowed over $47 million for the improvement district and that the city currently owes nearly $45 million of that to bondholders.

Spent no money?

Furthermore, Exhibit H of the Sept 2006 Development Agreement between the city of Goodyear and Westcor specifically identifies all of the reimbursements that the city has made or will make to Westcor.  Under this agreement the city of Goodyear reimbursed the developer for all of his ID Improvements as well as Public Improvement costs. You can view the development agreement here;

Your comment suspends reality to imply that it is as if when a private individual purchases a home with a mortgage, that the private citizen did not spend any money to purchase the home because they took out a mortgage for which the bank supplied the cash.

In the same development agreement mentioned above, in paragraph 12.4(a), the city’s “exclusive” remedies pursuant to non-performance by the developer are to suspend the city’s obligations under the agreement and claim any sales taxes in the Reimbursement Account at that time.  That means that at the end of the day the city of Goodyear is on the hook for payment to the bondholders should the developer non perform, or walk away from the agreement.  Westcor does not have to declare bankruptcy or fold or have any financial difficulty to walk away from this agreement.  And for a $7 billion per year company like Macerich, walking away from a few million dollars of tax revenue liability is a stroke of a pen.

My question to you Mr. Fischbach, is, why do you continue to lie to the citizens of Goodyear?
My question to city council is, why are you allowing these lies to proliferate?
My question to the press is, when are you going to expose these lies?

Howard Brodbeck
Goodyear Resident

The Mall; Wrong Again. Arizona Republic Continues to Report City of Goodyear’s Nonsense Spin

I sent the email shown below to the Arizona Republic this morning. If you really want to know how big a deal this mall delay is, just read my blog posts over the past 2 years (5 yr financials smoke and mirrors) as I’ve told anyone who would listen (and especially the city of Goodyear) that this council and city management are driving this city over the cliff with blindfolds on.

The Arizona Republic and other local media are the enablers of the incompetent, dishonest, council members who YOU elected by simply reprinting GY’s continued spin about this and other topics related to GY’s dire financial situation. They appear to simply print whatever the city of GY tells them with no questions or investigation of their own.

And city of GY employees? I’ve been telling you since the start that my analysis and recommendations were in your best interest. You’ve not believed me to this point, I know. Maybe you’ll start believing me now as the outcome from this bad news that I have predicted over and over again comes home to roost at your doorstep……. again, just as I have predicted it would. Severe actions that will be required now could have been mitigated somewhat if only GY council and city management had taken my advice literally years ago and taken off their rose colored glasses sooner.

From: howardsgoodyearblog
Date: Fri, Feb 3, 2012 at 8:27 AM
Subject: You’ve Still Got it Wrong, and You’re Still Letting Them Lie to You
Cc:, “Dokes, Jennifer” ,,,,,

Your two “puff piece” articles in today’s paper about further delays in the Estrella Mall once again only report the positive spin that the city of Goodyear is trying to put on this continuing fiasco. When will the Arizona Republic wake up and realize that you are simply enabling the spread of nonsense from the city of Goodyear that you print without checking or questioning their facts and thereby continue to mislead the citizens of the SW Valley?

You should be ashamed of yourselves.

Just look at two of your last three paragraphs, in your story today about the mall delay. In the third to last paragraph you report, “Budget revenue forecasts were expected to increase from $65 to $72 mil” (with the mall). That is a $7 million revenue DROP. Your very next paragraph tells people this will lead to a $2 million “structural” shortfall in 2015.

I realize that you are all just journalism majors who didn’t have to pass any college math courses, but you don’t have to be a rocket scientist or even an accountant to realize that a $7 million drop in revenues will NOT lead to a $2 million budget shortfall. Are you just repeating whatever GY chief info officer Nora Fascinelli tells you (or email’s you so you don’t even have to transcribe it)?

When is the AZ Republic going to wake up and realize that GY is flat out misleading you and the citizens of Goodyear and that the GY city council is either too incompetent or too politically entrenched to either know or care that they are being misled by city management and that this has been going on for quite some time.

You are embarrassing your newspaper and what is worse, I have been telling you for at least the past two years that this is the case and that the REAL STORY is in the city of Goodyear’s arrogant, misleading, and incompetent behavior but you just refuse to pay attention.

Attached is a copy of GY Fin Director Larry Lange’s 5 year financial forecast for the General Fund which I have previously reported in my blog,
If you need any help reading or interpreting any of this, just let me know. You can also find his spreadsheets on the rest of the GY budget there as well.

Start doing your job. Start asking some informed questions. Start doing your own investigating.

Howard’s Goodyear Blog


Cat Got Their Tongue?

Remember when Fischbach made his politically timed announcement last February to the news media just before the March GY election that Westcor had just agreed to restart construction on the mall?  Do you remember that I have told you before that this was politically motivated and that the news papers were complicit in reporting this and not asking Fischbach even ONE tough question about why all of a sudden Westcor would be in the mall building business again?  Here are the newspaper articles in case you’ve forgotten them;

Mall will be here by 2014.  and WVV, Construction to Start Next Year.

Fischbach also announced that construction could begin by 2012.

Well, it’s 2012, so last week, I sent the following email to GY city council and cc’d the news papers who reported Fischbach’s nonsense;

From: hdb275 <hdb—>
Date: Fri, Jan 20, 2012 at 4:33 PM
Subject: What’s Going On With the Mall?
To:, Wally Campbell <>,, William Stipp <>, Joe Pizzillo <>, Sheri Lauritano <>
Cc: Jim Painter <>, “Dokes, Jennifer” <>

Wally announced on the PC Message Board end of summer that Westcor was going to come in with new plans and perhaps a renegotiation in “the fall”.
What has happened?

Howard Brodbeck
Goodyear Concerned Citizen

Would anyone out there be surprised to learn that I have not received a reply from anyone?  I wonder why?

Have you seen any stories in either newspaper asking with righteous indignation what is going on with the mall or might they have been mislead by Fischbach?  I guess I’ve somehow missed those follow up stories too.

If you would like to find out what is happening with the mall, the project upon who’s successful start up GY Finance Director Larry Lange has based his hopes of GY’s continued solvency, you can send them all an email asking the same question as I asked using my easy to use GY email list which you can find at the top of the list of topics on the left of this screen.

What Goodyear Should Do

I’ve told you many times that the current GY city council and city management are doing the wrong things, that they are spending too much money, that they have still not taken the prospect of GY’s financial failure seriously.

Now I’m going to tell you a few specific things that I believe they should be doing.

What follows are ten recommendations for what I think GY should do right now.  I believe, if implemented, these recommendations would reduce GY’s spending / increase GY’s revenues by over $10.1 million per year.  Today, your city council and city management are doing none of these things.  My guess is there is a lot more that could be uncovered than what I discuss here, but I only have so much time and they are mighty uncooperative since Georgia took over.

In the first three recommendations below I encourage GY to use the prospect of Chapter 9 Bankruptcy to its best purposes now.  An entity does not have to declare bankruptcy in order to be able to take benefit from the potential threat of bankruptcy. This is what any struggling independent company does with it’s suppliers and creditors and all I am suggesting is that GY start treating the taxpayers’ money like it was their own money in a similar way.  It is not easy, it is stressful for both sides, and it takes a lot of time.  But I believe that without some significant change in GY operating procedures it is only a matter of time until GY reaches that point anyway.

What GY has to do in each of the first three cases below is convince GY’s partners and suppliers that it’s a GOOD POSSIBILITY that they might have to deal with GY after GY declares Ch 9 Bankruptcy. If that happens (and the creditors/suppliers will know this) GY can reject any existing contract of GY’s choosing if they want.

Think about that last statement.  If GY declared Chapter 9 bankruptcy, GY would be able to reject any current contract that they have with another entity and only keep the ones they like. That’s a big deal.  Think Indians, Reds, Westcor, CTCA, Sunteck, Sub Zero…..

Here are the 10 recommendations.

    1. Indians and Reds. (+ $4 million). Tell the millionaire owners of the teams that things look pretty bleak.  Have Larry Lange make a grim presentation based upon his and Terry Canada’s “long range forecasting tool” that they showed GY council on Oct 17.  FOR ONCE just assume the worst and hope for the best rather than GY’s normal opposite approach.GY taxpayers are spending $100 PER FAN TICKET to have these millionaire’s ball team’s fans here in March. (See my previous article for the details.  ).  My calculations show that the stadium costs taxpayers as much as $12 million per year all in.  $ 2 mil is operating costs and another $5 mil is interest expense. But last year, @ $40 spent per paying customer, there should have been about $5 mil in revenues.  GY only got $1 mil.  The Indians and Reds got the rest because by contract they get nearly 80% of everything. The conversation would go like this.

      “Dear Team Owners. If we don’t do something right now, we believe there is a good chance that GY will have to declare Ch 9 and then we would have to reject our lopsided current agreements with you and begin anew with one that will favor taxpayers. Therefore, between now and whenever that may happen, we find it necessary to limit our stadium operating costs to one ticket taker and one gate keeper at the stadium during March and lay off everybody else.  Sorry in advance for the long lines.
      However, we do have an alternate proposal.  We propose to change the current 20/80 revenue split which is currently in your favor to 75% GY / 25% teams on everything except your merchandise, which you can keep.  We do that until year 10 of our agreement when we agree to negotiate in good faith to restore the original agreements assuming GY is still a float.”

    2. Westcor.  (+ $ 1 mil per year) Same thing.  Just change the numbers and references above. See my previous article for the details.  No more sales tax revenue to Westcor.  That money (running at more than $1 mil per year) comes to GY until the mall is up and operating.The agreement we made to allow you to extend the start up for a measly $1.3 million?  Instead, we want to use Larry Lange’s optimistic charts of many more millions of dollars per years of tax revenues as your cost to extend if you want to continue to buy your way out of the original deal.   We’ll also eliminate the special treatment and discounts you’re getting on permit fees.

      You don’t like our offer Westcor?  The alternative is that we will find it our civic duty to our taxpayers just as you answer to your shareholders, in order to save money and reduce our risk of losing essential services, to immediately lay off every GY employee who has, or may be involved in, currently or in the future, with approving, inspecting, and in any other way facilitating your start up.  We’ll farm it all out and leave one guy in charge to look over the work when he has the time because it might just be our city manager is all that’s left to turn out the lights.  It might cause significant delays to you but we really don’t have any other choice, do we?

      And by the way, Westcor.  Before you start poor mouthing us about $1 million measly bucks we noted in your parent company Macerich’s latest news release that you upped your dividend to your shareholders (which indicates you don’t have anything better to do with your money) by 10%. Since you have over 130 million shares outstanding, the dividend INCREASE is more than $25 million per year.

    3. St. Gobain, Suntech, SAS, Sub Zero, and any other resident business who recently got, or currently has corporate welfare from GY. Same plan as Westcor.  Tear up the agreements or services will be minimally available until further notice.  How much is this worth?  Who knows. Maybe a lot.  Got to be a couple million a year, though, given all the hubbub made about them.
    4. All city departments implement a 5% expenditure cut with no service reductions.   Don’t think you can make that happen Mr. Department Director?  Thanks for your service, we’re promoting from within, who was your highest rated employee last year in your department? +$3 million.
    5. Repeal the Meet and Discuss ordinance. Too many rules, too much work, we don’t have the money to pay staff to manage something like this.
    6. Repeal the 1% for the arts ordinance. We can’t afford it right now.
    7. Get a real handle on where retirement and benefit costs are going in GY with some realistic numbers and define a plan to limit their future increases to no more than annual average AZ employee income increases or some other similar measure.  Here is my article explaining how GY has ignored it.
    8. Find out how GY can un-annex Mobile and then do it.
    9. We pay 7 council people nearly $100,000 per year in salary. They should all surrender it. Wally claimed during the campaign that she didn’t even know it was a paid position so she shouldn’t miss it, should she?
    10. Don’t spend the money that GY receives in savings from the 9 programs above.  Start equally paying down debt and lowering the cost to live in and do business in GY for property owners, small businesses, and consumers.  This would include property taxes, permits, inspections, and sales taxes. Put all city directors on a significant bonus program which would allow them to add up to 25% to their salary each year if goals are achieved. In order to do this, in addition to passing a published working budget use a 15% lower budget or a budget which is no greater than the previous year’s actual spend as the target for the directors’ bonuses.  This is similar to what Litchfield Park does.

My easy to use GY council email list can be found in the upper left of all categories on this page.

City Files for Chapter 9 Bankruptcy

The Rhode Island city of Central Falls is the latest in a string of poorly managed cities to have to file for bankruptcy.  Check this link for the story.

What?  Did you think it was going to be Goodyear?

It might have been, and as I continue to show by example below, with the people currently in charge of managing our city money I believe it is only a matter of time.

If you read the article above about little Central Falls, RI, you would know that Central Falls had to go bankrupt because they have about $21 million in total debt, $80 million in future unfunded pension liabilities, and ignoring the outstanding debt, their pension liabilities were, “nearly four times their operating revenue of about $17 million per year” (4:1).  They threw in the towel. They decided that they would NEVER be able to pay back a 4:1 ratio of debt to general fund revenues.

I don’t know what Goodyear’s pension liabilities are.  I asked for details about it nearly a year ago and all I got back were a couple of condescending emails and this one power point slide Retirement Costs 120210 from Mr. Fischbach back in November and December of 2010.  You will note when you open the slide that this slide makes two very critical assumptions in order to come to Fischbach’s conclusion that retirement costs are no big deal to Goodyear.

First, the slide assumes that GY’s employee costs will be just about flat from the date of the slide until at least 2020 which is as far out as the slide projects.  No increases in employee costs over the next 10 years? Do the employees know this? Here are the two emails where Fischbach tries to explain all of this complicated stuff to me. Fischbach emails Nov 4 and Dec 2 2010 .  In the Dec 2 email he explains that, “the City’s portion of the pension costs in 2019/20 is $3.9 million, which is based on existing payroll (# of employees, salary amounts) so we can compare evenly.”  So Fischbach is just being fair? In order to compare evenly, he makes the assumption that the number of employees and salary amounts remain the same for the next 10 years?

And here is the second very important assumption. In Fischbach’s Nov 4 email on the same topic he tells me that he is including the city contribution at the current unfunded rates for 3 different state run retirement programs for city workers.  Sounds good, eh?  He’s included the “underfunding” amounts that are in place as of November 2010 and keeps them the same throughout.

But here is what the ASRS director, Paul Matson, had to say about that as reported May 2010, by AZ Capitol Times, 6 months prior to Fischbach’s email to me;

“while Matson says ASRS members have no need to be concerned about the stability of the fund, a key step toward keeping ASRS healthy is that contribution rates will continue to increase annually for the next several years for active members and employers by 0.3 percent, or possibly 0.4 percent. Initially, the pension contribution rate will increase to 9.6 percent from 9 percent starting July 1.” *

But it’s only 0.3 percent per year, you say. A mere oversight by Mr. F?  Not quite.  Matson is saying that rates will have to be added to by 0.3 to 0.4 percent per year and gives the example of going from 9.0 to 9.6 in July of 2010.  (In July of 2011 the contribution rate went up again from 9.6 to 10.5, a lot more than Matson predicted )  On a 9 to 10% rate, an addition of 0.3 to 0.4 is a 3% to 4% increase per year in the RATE.  (if you don’t understand the math around what I just wrote, ask someone who knows math to explain it to you. It’s important.  Warren Buffett refers to it as “the snowball”).

Do you know how much 3% per year is compounded for 10 years?  Thirty four percent (34%)! And 4% for 10 years is nearly 50%!

So was Mr. F just blowing smoke at me when he replied or does he really not get this? In 2010 GY contributions were $3.3 million in a $60 million general fund budget. At the rate they are going up (over 10% per year) in 10 years they could be 260% of this or nearly $9 million per year and that is only if employee costs do remain flat for the next 10 years. At the time of F’s email all three pension plans were underfunded, ASRS was predicting contribution rates would continue to rise, and GY was assuming that employee costs would be flat. No problem. That’s the kind of planning that drives private enterprises into bankruptcy.  Why not city governments too?

In essence, what GY is saying is,”we don’t have to worry about calculating GY’s retirement costs in any more detail as long as we assume that they will never go up from here”.  That makes sense doesn’t it?

Did I also tell you that Mr. Fischbach is the real Santa Claus?

A couple of things I do know. One is that Goodyear’s debt burden is over $300 million and that Goodyear’s general fund revenues are only about $60 million.  That’s a 5:1 debt to general revenue ratio. I also know that Wally says that Westcor wants to re-negotiate the $47 to $70 million mall deal again with the same GY staff who re-negotiated it the last time. (Did all that dirt with curbs really cost $47 million?  Someone should look into that.)  And based upon GY’s response to my questions about their retirement liability I also know that GY has not done the thorough job it needs to do in order to understand its worst case scenario for its pension liabilities.

Central Falls called it quits at 4:1.  Goodyear is at 5:1 and counting.

* Link to the entire article.

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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