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Struds

It Gets Even Better

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Harbor Point developer to buy project's city-issued bonds

City says plan saves money, but critics argue Beatty is 'double-dipping'

 

 

Developer Michael S. Beatty's Harbor Point Development Group LLC plans to purchase about $35 million of the $107 million in bonds and would earn an estimated 6.5 percent interest rate, according to Stephen M. Kraus, the city's chief of treasury management.

 

 

 

Read more: http://www.baltimoresun.com/news/maryland/baltimore-city/bs-md-ci-beatty-bonds-20130815,0,2493794.story#ixzz2c8jPjF4Q

 

 

So the city will not only pay for all the improvements needed to develop the area by issuing bonds, it will also pay interest to the beneficiary of the bond issue. And somehow the politicians who pushed this through will convince themselves it's all for the good of the people of Baltimore.

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I read that this morning, surely this has to be illegal!

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This makes me ill... meanwhile no drop in property taxes for citizens and taxes on everything else are going up... And they wonder why people are still leaving...?? All that's gonna be left is bloodsuckers and illegals...

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is it illegal?

 

It's probably not illegal, just a bit smelly.

 

On has to wonder - When Treasury Notes are in the 2% range and home mortgages in the 3-3.5% range, why does the city need to pay 6.5% on it's bonds? That would seem like a great return for any investor these days.

 

Of course, one has to worry about the city defaulting on its bond payments over the 30 year life. There are municipal bond holders with Detroit bonds on their portfolios right now who could lose their butts thanks to Detroit's bankruptcy. If I had money to invest right now, some sort of municipal bond for any large American city would NOT be my first choice, regardless of how enticing a 6.5% return might appear!

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