Only in Banning : City Council gives Free Rent on City owned building AND relinquishes $ 192,000  in income belonging to the taxpayer

In mid 2008 the Community Redevelopment Agency (City Council) bought a building on 130 N. San Gorgonio for $ 450,000 specifically for use by the Banning Cultural Alliance as their Art Gallery. The taxpayer was told  that this was a good deal for the City because rental income from the building was going to offset the cost of funds used for the purchase. As it turns out, nothing could be further from the truth.

At the time of purchase, the Banning Cultural Alliance was already occupying this building . One of their alleged members, Paula Hill a.k.a. Paula Glick, owned the property and had allowed it to be used by the Alliance. The purchase by the City was subsequently voted for  by Bob Botts ( a former Vice President of the Alliance and husband to  Alliance Board member Ann Botts ), Barbara Hanna and John Machisic. After the deal went through, Hill (Glick) showed her gratitude to Hanna by making a campaign contribution (view page 8) .

Ever since the building was purchased by the City in mid 2008, the  Cultural Alliance has continuously occupied it. However, a lease between the City and the Alliance was not executed until a full year later, in August of 2009. This means that for the first year the Banning Cultural Alliance was allowed to occupy the building without any legal basis whatsoever and consequently without paying any rent.

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“ SWEETHEART DEAL LEASE” –  FINALLY EXECUTED A FULL YEAR AFTER PURCHASE  – CALLS FOR EVEN MORE FREE RENT

A lease was finally executed in August of 2009 (view) between the City and the Alliance ; this lease makes no mention of the first full year when the Alliance occupied the building for free. The City gave the Alliance an absolute “sweetheart deal” that nobody else would ever be able to get in the real world : the lease provides for the Alliance to be the master tenant AND awards them yet another full year of FREE RENT (see “Rent Schedule”, page 30)  for a total of  2 years FREE RENT.

APARTMENT INCOME

There are  2 leased  apartments upstairs in the building. The rental income is undisclosed but older documents show it should be in excess of $ 1,000 a month to date (view). Unquestionably the income from those apartments belongs to the taxpayer. But to this day the taxpayer has yet to receive a single dime. The rental income has been illegally withheld by the Banning Cultural Alliance during the first year when  it occupied the building without proper legal cause. The lease finally executed in August of 2009 now officially transfers all future rental income to the Alliance  in it’s entirety.

This means the Alliance not only got 2 full years of FREE RENT , they also got to keep the apartment income for those two  years ( at least $ 24,000) that belonged to the taxpayer. They will also keep the apartment income for the next 15 years. This constitutes an (illegal) gift of public funds in the amount of $ 192,000  ( $ 12,000  x 16 years ).

RIDICULOUSLY LOW SECURITY DEPOSIT

In any lease agreement the purpose of a security deposit is to protect the owner (here the taxpayer) from default or damages otherwise caused by the tenant. The  Alliance is required to post an unreasonably low security deposit of just $ 100 ( page 3 ).  How does this protect the taxpayer who just invested $ 450,000 purchasing the building ?  The answer is : it doesn’t.  But  it gets even worse : at this time the Cultural Alliance does not even have to come up with  $ 100.  The security deposit is not due until July of 2010.

WHO’S TO BLAME ?

Once again, Bob Botts and Banning’s “Queen of Taxation”, Barbara Hanna (view) are behind this slick scheme to stick it to the taxpayer. Don Robinson approves silently by not asking any questions (what else would expect from “MINI ME” ?) . Nobody on the City Council has been standing up to protect the taxpayer.