Secret Subsidies for North Beach Developer

By Brenda Miller

The L.A.B.'s North Beach development is supported by millions of hard-working taxpayers' dollars & a huge discount off beachfront land appraisal.

Here's how: the City's July 19, 2010, Staff Report included an estimate of $4.5 million to build the infrastructure to support the LAB's 48,000+ sq. ft. building. The City admits in tiny print that the estimate was NOT based on engineering and geology studies, but on architectural planning drawings only. Construction costs cannot be estimated that way. The incumbents know that.

They also know that underneath the North Beach parking lot is not just dirt. There are water lines, sewer and electric lines, the County drainage channel, and other complexities. Those conditions make it a costly project with limits unknown.

That means the $4.5 million isn't likely to be limited to just $4.5 million. It could be many times more because the project site is so complicated. Will it be $9 million, $12 million, or more? No one knows because the necessary engineering studies weren't done.

According to City Treasurer Pall Gudgeirsson, none of that money has been budgeted. Would an intelligent investor take such a gamble with his own money? Would you?

The two incumbents committed City resources--our money--to foot the bill anyway with no cap to the costs. That's like a blank check.

Those same Council members' decisions have painted our town into a Catch-22: if we sign a development contract with the LAB and don't have the money to perform our part of the bargain, then we could be facing a lawsuit for breach of contract. The alternative is we may have to severely cut City services residents need.

Every City program could be at risk of being gutted to pay for the LAB at North Beach. We'd have to ask ourselves serious questions like these:

• What will happen to the new Sports Park? Will it ever be built to completion?

• Will the City slash programs residents have relied upon for generations--swim & water therapy programs at the Ole Hanson Beach Club, Junior Lifeguards, sidewalk repair, pothole filling, maintaining existing parks and the beach trail?

• Will they cut programs for our Seniors at our new Senior Center?

• Will police officers have to be cut from monitoring speeders in school zones and protecting us from gangs?

Now the incumbents are bragging about the City's AAA bond rating. But that's only valuable if the City intends to borrow money. Given the un-budgeted millions they've agreed to soak into the LAB's project, it looks like the incumbents are setting the stage for a bond-issue to subsidize the North Beach developer's costs. Why don't they use that money to help local, existing businesses who could use a bit of a facelift to remove blighted storefronts? The likely reason is they simply don't care about the local business owner.

Voters need to send the incumbents a message: their stimulus package for a slick developer using middle class taxpayers' money is not acceptable. Not now, not ever.