Since Grand Ave Project is a City, County & CRA (State) project on City, County and State public land, and the Royal Family of Dubai just invested in the project, does that mean the City and County of L.A. is doing business on public land with an overseas limited monarchy that is part of the United Arab Emirates? Maybe this is all hunky-dory, but I wonder what voters would have said about this business deal on public land and public trust? And keep in mind, the City, County and CRA bent over backwards to offer all kinds of corporate welfare tax breaks/subsidies, only to now benefit one of the richest oil producing families in the world!!! ONLY IN L.A.!!!
See new story about CalPERS pulling their investment out of Grand Ave Project, to be replaced with money from Royal Family of Dubai. Click here
"They're a huge fund that has invested in real estate all over the U.S.," said Witte. He added, "They're just investors. They don't have any control" over the direction of The Grand.
[EXCUSE ME!!! If they invest in private real estate all over the U.S., that's fine, I'm sure. However, remember, Grand Avenue Project is a joint effort with the City of Los Angeles (City Council is part of the deal) and State of California (CRA). So it sounds like the City of Los Angeles and State of California are in business with the Royal Family of Dubai. Is that a government agency, or what? Did voters of Los Angeles decide that the City should be in business with overseas oil sheiks? This is not like investing in your typical private piece of real estate in the U.S. It is on City, County and State owned property on a City, County and State project. Is this the first example of the U.S. doing a City project with an overseas government?
Related's previous partner, CalPERS, had invested entirely through MacFarlane Partners, which has had a hand in several Downtown projects including complexes Hikari and Block 8 in Little Tokyo (both from Related), and Forest City's Met Lofts in South Park. The firm made a splash last summer when it joined AEG in the $900 million Convention Center hotel.
[I HOPE THESE DOWNTOWN HOUSING PROJECTS TURN OUT TO BE A GOOD INVESTMENT IN THIS HOUSING MARKET. How's the investment going? I heard it tanked as vacant units plummet in property value, and it's only goin' down!]
"With the focus during the last quarter of 2007 on the L.A. Live investment, the firm determined for the moment another major investment in Downtown Los Angeles such as Grand Avenue would not be prudent," said company chairman and CEO Victor MacFarlane in an email last week, while traveling.
[What??? I thought you already committed to Grand Ave fully aware of LA Live??? Perhaps some of these reasons below are the real reasons, along with all the risk involved that I blog about in my article (see link below).]
Bob Safai, a lending expert and principal at real estate brokerage Madison Partners, agrees that securing equity is a challenge in the market reeling from the subprime mortgage crisis. Banks today often require loan seekers to put down about twice as much upfront as was required just a year ago, up to nearly half the total loan amount, he said.
"There's much more stringent requirements on getting a loan done," said Safai. "In this climate, when you're dealing with local banks, often times you have to give a recourse loan, which means you personally guarantee the loan; you're not just risking your equity."
Witte concedes that the climate is tough.
"We are of course in a credit crunch, but we have our equity partner committed so we're going forward," he said. "I'd be lying if I said this is an easy time."
[Oh good! Because the City and County is on the hook in this deal, too. If it tanks, so does the City's stake in this one of a kind in the U.S. business deal where you have the City and County in a speculative business deal with a private company.]
"These are very tough, very large projects in uncertain times, but the people who keep moving are the people like AEG and Related," he said. "We were here before Grand Avenue, and we'll be here after Grand Avenue."
[Great...battle of the luxury, five-star financial black hole CRA fundsucking projects. THIS AIN'T FUNNY FOLKS. READ THE ARTICLES I WROTE ON THIS. THE CITY AND CRA IS ROLLIN' THE DICE WITH A PRETTY BIG BET OF CITY LAND, MONEY, TIME AND TRUST. THESE PROJECTS COULD EASILY BANKRUPT THE CITY IN THESE ECONOMIC CONDITIONS. WHY DO YOU THINK CALPERS PULLED OUT?!?!?]
Now maybe this deal is the best thing since Cool Whip on pumpkin pie, but here are some things I found on a Google search for "Royal Family of Dubai". First of all, this was the first thing that popped up: "United Arab Emirates". Maybe that's good...not so sure about some of this, though?
Wikipedia Gems (I know, Wikipedia sucks! So feel free to dispute.)
* In May 2006, Dubai Investment Group through Dubai Islamic Investment bought 40% stake in Bank Islam, a subsidiary of Malaysia government-controlled BIMB Holdings Bhd.
* Dubai’s police may turn a blind eye to illicit diamond and gold imports, prostitution rings, and shady characters who buy 25 villas at a time in cash, but they are diligent in deporting Pakistani workers who complain about being cheated out of their wages by unscrupulous contractors, or jailing Filipina maids for ‘adultery’ when they report being raped by their employers.
* Dubai, like its neighbours, flouts ilo labour regulations and refuses to adopt the international Migrant Workers Convention. Human Rights Watch in 2003 accused the Emirates of building prosperity on ‘forced labour’. Indeed, as the Independent recently emphasized, ‘the labour market closely resembles the old indentured labour system brought to Dubai by its former colonial master, the British.’ ‘Like their impoverished forefathers’, the London paper continued, ‘today’s Asian workers are forced to sign themselves into virtual slavery for years when they arrive in the United Arab Emirates. Their rights disappear at the airport where recruitment agents confiscate their passports and visas to control them.
* Indeed, since 9/11 a huge investigative literature has explored Dubai’s role as ‘the financial hub for Islamic militant groups’: ‘all roads lead to Dubai when it comes to [terrorist] money’, claims a former high-ranking U.S. Treasury official. Bin Laden reportedly transferred large sums through the government-owned Dubai Islamic Bank, while the Taliban used the city’s unregulated gold markets to transform their opium taxes, paid in gold bullion, into laundered dollars.
* Many of Dubai's 250,000 foreign laborers live in conditions described by Human Rights Watch as being "less than human."
So I don't know if any of this is a factor, but I wonder what the people of Los Angeles would say about the City involved in this public deal with this limited monarchy, especially since the project is being handed tax breaks/subsidies and CRA is betting the farm on this project? I'm sure it must all be no problema, because the powers that be must be well aware of all of this, and know that the public will be raising these questions. So it must be one of those things that doesn't make some people too happy, but there's nothing actually wrong with it, it just might piss some people off.
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