Mayor Villaraigosa's Brilliant Plan To "Invest" Pension Funds
What a great idea! Let's take money we've set aside for employees' retirement, and bet it all on red 19 -- er, I mean, "invest" it in construction projects that the private sector is unwilling to back!What could POSSIBLY go wrong? After all, bureaucrats are REALLY GOOD at managing money and picking profitable investments.
I mean, it's practically inconceivable that the "investments" -- and the interest for the bonds thereon -- will simply eat up all the pension money, thereby requiring taxpayers to replace those pension funds later. Let us engage in a mass "leap of faith" that the mayor, given his long and successful career in investment banking, will make this "investment" pay off. Only a coward would be discouraged by the City's past miscalculations (e.g., the parking lot at Hollywood and Highland that costs taxpayers a fortune every year).
One of the first cases I handled when I was a shiny new lawyer was an ERISA case against the trustees of a pension fund. They had "invested" all the employees' life savings in second trust deeds secured by houses all over Southern California. It worked out great, except the houses weren't worth as much as they thought, and the market went south, so all the life savings went "poof" when banks foreclosed on the houses.
Gosh, maybe pension funds shouldn't be used for speculative ventures after all. Nyah. It's okay. I'm sure all the developers and underwriters will really enjoy getting the use of our tax dollars now, and heck, when those City employees start retiring in numbers, we'll simply put a bond measure on the ballot to force the five remaining homeowners in L.A. to pick up the tab.
[To read the press release -- you can pretend you're an L.A. Times reporter -- go here: http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20061114006167&newsLang=en ]
Posted by Walter Moore @ 11/14/2006 07:04:00 PM
17 Comments:
>>(from article) Investments will target housing affordable to Los Angeles’ middle-income workforce, including teachers, firefighters, and nurses.
Funny, Aren't those the same groups that routinely show up in campaign commercials?
Walter,
Would you consider giving our Mayor and staff classes on ethics and investment.
The Mayor and staff neglect taxpayer's input on the decision. Why is the Mayor making these decisions without taking the employees and taxpayers input?
747
Yup. Oh Dear. 10-4, I repeat 10-4 Roger that. Roger.
This group donated to AV's coffer.
Who's ass did Mayor Midget slurp and dip into a public employee pension fund for 65 million dollars when his proposed plan H failed?
What will happen if he can't replace the funds back to employee retirement fund? Do we pay for it?
TAXES TAXES TAXES AND MAYOR WORKING HARD TO TAX THE SHIT OUT YOU.
MAYOR PLEDGES? PLEDGES?
WAS THIS OUT OF HIS OWN POCKET.
TITLE OF ABC7.COM NEWS TOPIC SHOULD HAVE BEEN
MAYOR DIPS INTO PENSION WITHOUT MAJORITY EMPLOYEE APPROVAL
Mayor Villaraigosa Addresses Narrow Measure H Defeat with Announcement of $65 Million Pension Fund Investment in Workforce Housing Fund
LOS ANGELES--(BUSINESS WIRE)--Following the narrow defeat of Measure H, Mayor Antonio Villaraigosa will announce an important public-private commitment to create workforce housing developments in the Los Angeles area, tomorrow, Tuesday, November 14, 11:00 AM at Puerta del Sol condominiums, 360 West Avenue 26, Lincoln Heights, CA 90031.
Mayor Villaraigosa will be joined by executives from LA’s largest public pension funds - Los Angeles City Employees Retirement System (LACERS); Los Angeles County Employee Retirement Association (LACERA); Los Angeles Department of Fire and Police Pensions (LAFPP) - to announce the commitment of a combined $65 million in Genesis Workforce Housing Fund II, a private equity real estate fund managed by Phoenix Realty Group that will create workforce housing developments in the LA area.
The press conference will be held at Puerta del Sol, a workforce housing community that is the fastest-selling new housing development in Los Angeles County and represents the type of development that will be funded with city and county pension investments. Phoenix Realty Group financed Puerta del Sol through the first private equity real estate fund solely targeting workforce housing development in greater Los Angeles.
Investments will target housing affordable to LA’s middle-income workforce, including teachers, firefighters, and nurses.
The Genesis II fund’s projects will be built by private developers throughout greater Los Angeles and are expected to provide 2,250 units of housing to the market over the next four years.
WHEN TUESDAY, NOVEMBER 14, 2006
11:00 AM
WHAT PRESS CONFERENCE ANNOUNCING $65 MILLION
PENSION FUND INVESTMENT IN WORKFORCE HOUSING
WHERE PUERTA DEL SOL CONDOMINIUMS
360 WEST AVENUE 26
(LINCOLN HEIGHTS)
LOS ANGELES, CA 90031
WHO MAYOR ANTONIO VILLARAIGOSA
PENSION FUND REPRESENTATIVES
PHOENIX REALTY GROUP CEO J. MICHAEL FRIED
PHOENIX REALTY GROUP SVP XAVIER A. GUTIERREZ
CHIEF PARKER A REPUBLICAN? WASN'T HE A DEMOCRAT? READ ON.
Today I Chief Parker officially endorse Jose Huizar for City Council.
When Huizar was first running for elected office he was the only school board candidate to get the endorsement of the UTLA and (then) Mayor Richard Riordan. He has shown a willingness to listen to both sides and that's why both sides support him. As a republican junkie, i've always had a soft spot for Dick Riordan, while he is a RINO, his heart was always in the right place. And his heart is with Jose, as is mine.
Working as President of LAUSD Mr Huizar has pushed and prodded the district into measurable reform initiatives to strengthen the classroom and the students experience in school.
While he did support Mr Pacheco during his council reelection I think a fresh start is needed for council District 14 -- Pacheco represents the divisive past.
To Mr Huizar -- while i don't know the direction Mayor Sam will go -- this law and order chief is with you -- and i don't even know if you've declared yet.
I wanted to be the first blogger to let my feelings known.
Now to all your CD 14 tinhorns -
Blog Away!
posted by Chief Parker @ 5/19/2005 12:22:00 PM 102 comments
IS THE ANGELENO JOEL KOTKIN?
From what I'm hearing a lot of employees don't have a clue this gangster mayor is gambling their life savings (pensions) for his own agenda. Everyone pay attention!!!! THIS IS A MAN WHO COULDN'T PASS THE BAR 4 TIMES... Hellloooo Did you read that??? And now he wants to GAMBLE YOUR MONEY. There's no out cry cause they don't know. Should the employees have to vote on something like this????
Can you hear me now?
Can you hear me now?
Walter...
Too scared to post something that is true?
LACERS, CalPERS, CalSTRS and MANY other public retirement funds invest. There are boards for all the major pension funds to make crucial investments.
There was even a bill this year calling for divestment from Sudanese companies that are indirectly helping the genocide in Darfur.
$65 million out of $35 billion in pension funds isn't that much. And, if it works, it's a great strategy to invest in the community where the pensions are based.
To 8:59:
No, I would not. Their decisions have nothing to do with misunderstanding ethics or sound investment principles. Rather, they chose to use others' money to accomplish their aims, regardless of ethics. But thanks for asking.
To 11:26:
You seem to have missed the point. What's noteworthy is not the idea of a pension investing funds. What's noteworthy is that this so-called "investment" is: unduly risky in view of the objectives of a pension fund; made by a mayor to reward cronies rather than to protect the trust corpus; and made to circumvent the electorate's recent decision on Measure H.
Furthermore, though I haven't seen the numbers, I suspect this represents an undue concentration of the trust fund in a single investment. Fiduciary principles require diversification. Simply stated, one shouldn't put all the eggs in one basket, or even 65 million of the eggs.
Also, as previously stated, for best results in getting your comments posted, you'll want to keep them civil.
Only a staffer could seriously believe that $65 million "isn't that much." Really? Go out and try to earn one-tenth of that -- or even one-hundredth.
And why you're doing it, explain why no one in the private sector is willing to invest that same $65 million. Ponder why City Hall is "investing" OUR money in a venture in which people are unwilling to invest their OWN money.
Wow Walter. WAY OFF.
65m is Alot for these funds? Ahhh.. read the release again, this is a COMBINED investment of LACERA (30Billion) LACERS (10Billion) and LA PandF (2Billion) in fact the County is the largest investor of the 65m. Are there privite investors in Pheonix/Genesis fund (s)? YES - lots of privite dollars, trust fund, endowment, Taft Hartley pension, Mutual fund and corporate dollars - trust me on this one.
Yes Walter 65m is tiny, teeny, miniscule for these systems who ALL have 5-7% of their fund in real estate.
Risky venture? Sure, its higher risk than most (but not all) real estate deals in the portfolio. But this is a profit generator, you diversify your portfolio with commercial buildings in Syracuse and bland REITS so you can use deals like this to earn pensioners money to pay benefits.
Will this make money? Youbetcha. This is a solid investment group who made many pension systems a Ton of money with Genesis 1, your characteristic of them as "cronies" is way, way off base. This is a very solid real estate fund that concentrates on loft/multihousing spaces that are actually affordable, unlike the foofoo loft properties that are losing money downtown.
Feel free to criticise the mayor for grandstanding on a pension deal that he had nothing to do with, or whatever else helps your case, but your posts on this topic have been way off base. "go out and earn a 10th of that" please - these systems have over 200,000 members combined - skip the drama dude.
This is a good deal, it makes the pension system money and helps people afford good housing. Deals like this do not deserved to be trashed by superficial, unresearched posts designed to scuttle AV.
Yes Walter 65m is tiny, teeny, miniscule for these systems who ALL have 5-7% of their fund in real estate.
Tiny, Teeny, Miniscule? Well, if so, why didn't Pheonix leave pension funds alone and fund this little tiny, teeny, miniscule on their own?
So tiny they won't take the risk you moron.
WHAT YOU ACTUALLY MEANT TO SAY WAS:
This is a bad deal, it breaks the pension system money and deceits people into thinking it's affordable housing. Deals like this deserve the public and county employees and expose AV.
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