Redevelopment Disasters courtesy of City Councilmembers Hanna and Machisic (and others)

11/24/09 – If the Banning Community Redevelopment Agency (CRA) was a business enterprise, chances are it would have been bankrupt a long time ago. Many projects that were approved for funding by City Councilmembers  Barbara Hanna and John Machisic have gone sour : due to foreclosure proceedings they have ended up as a total loss  to the taxpayer .  Here are some examples :

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Redevelopment Disaster No. 1

Address : 4th Street and Lincoln , Banning

Amount of ..Redevelopment.Funding  :               $ 500,000.00

Date Funded: 11/28/06

Recipient of Funds : MG Banning

Building Status :  unfinished / vacant

Legal Status :  pending foreclosure

Value of Collateral held by City :  .Zero

Loss to Taxpayer : $ 500,000.00

Voted for by : Barbara Hanna , John Machisic, Art Welsh, Sue Palmer, Brenda Salas ( view )

Notes :  did this redevelopment funding remove “blight” or did it add to it ? – this is an abandoned  unfinished project, approximate building size  150,000 sqft.

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Redevelopment Disaster No. 2

Address : 515 W. Ramsey St. , Banning

Amount of ..Redevelopment.Funding  :               $  100,000.00

Date Funded: 2/28/06 and 5/13/08 (via change order)

Recipient of Funds : Bob & Claudia Keeling

Building Status :  finished / vacant

Legal Status :  foreclosed   (no longer owned by recipient of funds)

Value of Collateral held by City :  .Zero

Loss to Taxpayer : $ 100,000.00

Voted for by : Barbara Hanna , John Machisic, Art Welsh, Sue Palmer, Brenda Salas ( view )

Notes :   recipients gave campaign contribution to Barbara Hanna ( view page 5 here) ; Recipient Bob Keeling is Board Member of Banning Cultural Alliance (view)

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Redevelopment Disaster No. 3

Address : 68 N. First St., Banning

Amount of ..Redevelopment.Funding  :               $ 450,000.00

Date Funded: 04/17/08

Recipient of Funds : DeMario Jackson

Building Status :  unfinished / vacant

Legal Status :  Notice of Default 10/8/09 – pending foreclosure

Value of Collateral held by City :  .Zero

Loss to Taxpayer : $ 450,000.00

Voted for by : Barbara Hanna , John Machisic, Brenda Salas, Debbie Franklin (view minutes on pages 10-12)

Notes : Recipient gave multiple campaign donations to Barbara Hanna (view article )

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Redevelpment Disaster No. 4

Address : 124-144 W. Ramsey St, Banning

Amount of ..Redevelopment.Funding  :               $ 100,000.00

Date Funded: 04/07/08

Recipient of Funds : DeMario Jackson

Building Status :  finished / vacant

Legal Status :  unknown

Value of collateral held by City :  .Zero

Loss to Taxpayer : $ 100,000.00

Voted for by : Barbara Hanna , John Machisic, Brenda Salas, Debbie Franklin

Notes : Recipient gave multiple campaign donations to Barbara Hanna (view article )

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Information posted above was in part retrieved from the following public document produced by the City of Banning : (view)

COULD THESE DISASTERS HAVE BEEN AVOIDED ?

By just applying  prudent business practices the above disasters most likely could have all been avoided . These disasters have very little to do with the economy and have everything to do with the incompetency and unaccountability of the Banning City Council (CRA) who did not do their job when it comes to safeguarding public funds. Here are some of the problems :

• The typical Owner Participation Agreement (view) has no provision for a credit check of the recipient – people with bad credit are not eliminated from participating.
• No 3rd party guarantees are in place ( Letter of Credit etc.)
• There is no provision in the agreement that calls for a dollar for dollar “participation” by the recipient (like there is in Beaumont), leaving  the development risk with the taxpayer, not the owner.
• There is no competitive bidding required (invites shill bidding and kickbacks)
• there is no provision for an  appraisal to be conducted prior to the funding in order to ensure that valuable collateral will be available to the City once the project is funded.

The fact that none of these provisions are either present in the Owner Participation Agreements (OPA) or in the Facade Grant Agreements is evidence of incompetence and ignorance on the part of the City Council (CRA). Our City Council has – once again – failed to protect the citizens of Banning. The list of failures proves that both Councilwoman Barbara Hanna as well as Councilman John Machisic are  incompetent and unqualified to hold public office. Due to the enormous damage they have done to the taxpayer Hanna and Machisic  both should resign.