In the late 1990s the City of Mission Viejo approved an $85 million bond issue, including principal, interest and fees for attorney’s, bond sellers, consultants, and accountants. The money was used in a redevelopment project to build two parking garages as part of the Shops of Mission Viejo renovation in the late 1990s. In a Register article, City Treasurer Cheryl Dyas reported the outstanding debt on the mall bonds was $25.4 million as of June 2011.
But in the article by Register Watchdog staff writer Teri Sforza, Dyas asserts that the debt doesn’t qualify under the legal definition of “outstanding long-term debt for Mission Viejo’s Redevelopment Agency because they were issued by a joint-powers authority formed by the City and its redevelopment agency.
So Mission Viejo’s “outstanding long-term debt” is only $2 million carried specifically by the redevelopment agency. The City’s total indebtedness for all activity of $44.5 million is an “irrelevant” number, she contends. The Register’s Sforza agrees, calling the number “meaningless.” Her original article reporting $2 million was under the column banner of OC Watchdog.
Indeed, redevelopment agencies statewide have been abolished by the California Legislature and Governor Jerry brown, with the concurrence of the California Supreme Court. It ended 60 years of mismanagement and faulty accounting, according to State Controller John Chang after auditing 18 California redevelopment agencies (not including Mission Viejo). Cities cited or designated as blighted mostly affluent commercial areas as well as inner city areas in true decline. Mission Viejo citizen activist Larry Gilbert explores the Mission Viejo Crown Valley corridor in a video to question its designation as blighted.
The City of Mission Viejo may consider the true mall debt as irrelevant, but the two parking garages are real world concrete, rebar and mortar financed by bonds purchased by a private investment entity which will want to get paid. It should be noted Dyas came aboard in 2011, more than a decade after the mall bonding.
Will the private investors be content to write off the debt if the state does not allow continued funding for existing redevelopment and/or other city taxing bodies? I don’t think so.
The City paid for the garages, but turned owner over the Simon Properties, the mall owner. If the city debt is irrelevant, will Simon Properties be required to pay off the bonds. I hope so.
A wife catches her husband in an amorous embrace with another woman.
The husband looks at his wife and says, “The main question is whether you believe what you see or what I am about to tell you.”
I keep this little parable in mind as another citizen activist watch dogging over Mission Viejo City Hall.