Thursday, December 15, 2005

The rate of return on your good intentions is a friendly plug in the London Free Press

If shares were issued by the city of London, the risk on your investment would be shielded by the city's legally unrestrained access to your earnings to the tune of 5.9 and 6.6 per cent property tax rate increases in the past two years. Unfortunately, you'd still only receive warm-and-fuzzy-feeling dividends, compliments of the London Free Press:

London's share of a year's profit from the John Labatt Centre was $151,000.

[…] "I don't know how much better it could be doing," said Vic Cote, the city's finance manager who oversaw development of the JLC.
Mr. Cote ought to be hoping that the JLC would be doing a lot better — the city spends annually about $4.1 million on debt payments for the $42 million it contributed towards land and construction of the $52 million facility.
Revenues totalled $13.8 million against expenses of $12.5 million, producing a profit of $604,394 for the London Civic Centre Corp., the private-sector partnership that leases the facility from the city. Global Spectrum manages the JLC.
This comment by an anonymous reader bears repeating:
Remember the 'original' deal based on conservative estimates estimated the City getting annual profit share of approx $500,000. But a few City staffers in the back pocket of Global Spectrum 'amended' the deal and slipped in wording allowing Global to siphon out all profits as 'management fees' and what ever was left the City got a share of which had to be at least $50,000. Some people would call this FRAUD … but corruption at the very least.

Incidently a City Manager involved in this deal (Clive Matthews) quit the City the day before the JLC opened and he became a Global Spectrum Director … and got his kick back and now is living in his seven figure new house paid for by London taxpayers.
Deputy mayor Tom Gosnell, a critic of the original deal made with Global Spectrum, thinks that it's time to let dead dogs lie, never mind the flies and stench:
"Its overall economic impact to the city is measurable, with the activities and spinoffs you see downtown."
I've no doubt a methodologically vague measurement could be constructed to support the city's position, but it would be a stretch to come up with $42 million. Sounds like a job for some academics looking for grants coming from you know who.

1 Comment:

Anonymous said...

The JLC Fraud deal has zero chance for the City of London to ever get a decent share. You see hidden inside the corrupt agreement are clauses that allow for unlimited "management fees" of $2.5 million to be given to Global Spectrum or Ellis Don with employee salaries to also be unlimited ..... the end result is the more the JLC brings in then the more money is stolen by these players. Whatever is left is divided between the LCCC & The City of London. When Council approved this agreement their were no less than 8 variations of agreements and the cost analysis suggested the City's share would annually in the $500,000+ range and with the actual revenues the City's share should be over $1 million/year. This was the deceptive conspiracy because Clive Matthews & Global Spectrum knew they had hidden clauses that let them siphon off and profit before the City's share is tabulated. Did you know Clive took and massive buyout from the City 1 day before the JLC opened ? Duh .. seems like a little bit of municipal corruption going here and a serious conflict of interest. If Global Spectrum's 'books' could be looked at I'd bet you'd find a least one $2.5 million 'management fee' had been stuck in Clive's back pocket. This is common knowledge in the corridors of City Hall ... but nobody wants to tarnish the image of the JLC with a corruption scandal. The projected 40 year PROFITS for the JLC are $250 million .. pretty sad considering the City of London essentially gave away a $42 million investment. Global Spectrum is in the business of siphoning of taxpayer $$ into their pockets. Even the LFP has all the facts of this scandal .... but LFP higher ups won't let the story break.