It Gets Even Better
Posted 16 August 2013 - 08:51 AM
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.baltimore...y#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.
Posted 16 August 2013 - 08:57 AM
Posted 16 August 2013 - 10:28 AM
Posted 16 August 2013 - 10:49 AM
Posted 16 August 2013 - 03:06 PM
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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