Alameda County Grand Jury: City of Emeryville is Incompetent, Lacks Fiduciary Expertise

Scathing Report:

Nora Davis, Ruth Atkin and Kurt Brinkman Put Developer's Needs Ahead of Residents

City Attorney Mike Biddle is a Dilettante

The independent Alameda County Grand Jury released damning and condemnatory findings this week from a probe into a City of Emeryville scandal involving inappropriate financial dealings that put the needs of Bay Street Mall developer Madison Marquette ahead of Emeryville resident's needs.  At issue is the City Council majority's attempt to forgive $6 million of an $18 million loan to Madison Marquette by the former Redevelopment Agency at the behest of the City staff last year.
The Grand Jury's report excoriates the staff, particularly the City Attorney Mike Biddle and the recently retired Director of Finances Helen Bean for doing the bidding of the favored developer Madison at the expense of the people of Emeryville.  The scathing report also blamed City Council members Nora Davis, Ruth Atkin and Kurt Brinkman for voting to forgive the loan.

The Grand Jury said they were troubled by the fact that significant financial decisions were made with "insufficient research".  The report found the staff and the Council failed to conduct due diligence and that the staff lacks fiscal expertise.  The three City Council members and the staff were found to be incompetent and they failed to fulfill their fiduciary duty to the citizenry.

The Secret News has the whole story covered HERE.

City's Latest Sweetheart Deal for Giant Developer

Oh, To Be Madison Marquette!

$6.8 Million Giveaway

With the end of Redevelopment Agencies throughout California, Emeryville residents might have assumed that the days of giant giveaways and massive subsidies to developers by our City Council had come to an end.  Not so!  Our resourceful City Council has found a new way to give millions of dollars to one of its favorite recipients of public funds: Madison Marquette Corporation, owner/developer of Emeryville’s Bay Street Mall.

On the agenda this coming Tuesday, May 21st, the City Council will consider allowing the Washington DC based Madison Marquette to pay back just $11.5 million on a promissory note owed to the former Redevelopment Agency where the principal amount, as of May 1, 2013, was $18.345 million, a giveaway to the billion-dollar company of $6,845,000.

This write-down is justified in an April 16th memo prepared by Emeryville’s Director of Economic Development and Housing, Helen Bean, in which Ms. Bean states that the present value of the principal balance at a 7% capitalization rate equals the proposed payoff amount.

Madison Marquette's Bay Street Mall:
Initially they received a $47 million Redevelopment
Agency subsidy.  Now they're getting $6.8 million.
But we're getting a mall Emeryville residents
don't use and an expensive drain on our police services.

The City would not see the entirety of the $11.5 million payoff. Like any debt owed to the former Redevelopment Agency, the money would be sent to the County Auditor to be distributed to the relevant taxing entities, with the City receiving 22% of the payoff, or just over $2.5 million.  The Oversight Board and the state Department of Finance would also have to sign off on the deal.

This promissory note is complex and full of legalese, but when our former City Manager, Patrick O’Keeffe, goes out of his way to sign a non-binding letter of intent to enter into this deal on his very last day of work, something smells funny to the Tattler.  Furthermore, while a payoff amount that eliminated the interest owed could make sense, it boggles the mind to imagine the response from Wells Fargo if you called them up to offer to pay off your home mortgage by paying just 62% of the principal owed on your home.  That kind of thing doesn’t happen for the 99%.  Those kinds of sweetheart deals are only doled out by Congress to their Wall Street cronies or our own City Council to its 1% developer friends.

Pat O'Keeffe To Step Down As Emeryville City Manager

Congratulations To Emeryville's New 
City Manager, Helen Bean

Opinion
At tonight's council meeting, Emeryville City Manager, Pat O'Keeffe announced he plans on retiring in March, surprising meeting attendees and forcing a "search" for a replacement to be conducted by the city council, probably in January.  We'd like to take this opportunity to congratulate Helen Bean, currently Emeryville's Director of Economic Development and Housing, on being selected as Emeryville's new City Manager.

As Emeryville's current second in command at City Hall, Ms Bean will be selected by the council after a nation-wide executive "search", paid for by Emeryville taxpayers, probably in February.

Welcome Aboard!
Emeryville's current Economic Director and
future City Manager, Helen Bean

The "search" will be contracted out to an executive head hunter firm and will likely cost some $30,000, the same amount charged to "find" Mr O'Keeffe in 2007.
After an exhaustive nation-wide "search", the city council selected Pat, bringing him up from his former position as Emeryville's Economic Director.
The council, later on selected another city employee, Maurice Kaufman, to be Emeryville's Director of Public Works after another nation-wide executive "search", this one costing some $7000.  Mr Kaufman had previously been second in command at the Public Works Department before the taxpayer funded "search".

We wish Ms Bean all the best in her new position and we give a nod to the city council for their unswerving tenacity in making sure nothing is left to chance as they soldier on with their program of reliability and predictability in public policy.  The way the council selects managers here helps contribute to our reputation for being extremely business friendly.  We should acknowledge this reputation is earned, cemented really by Emeryville's reliable and predictable environment creating an ongoing laser-like focus on keeping businesses happy.