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Started By
Message
re: New Orleans council approves payday loan for cash strapped city
Posted on 5/7/26 at 4:33 pm to BPTiger
Posted on 5/7/26 at 4:33 pm to BPTiger
quote:
So $100 million today instead of $212 million over the standard term.
Reminds me of the city of Chicago and one of the most lopsided deals in the history of politics...when they sold the city's parking meters for 75 years to private equity.
quote:
In 2008, Mayor Richard M. Daley leased the city’s meters for 75 years for $1.15 billion to address a short-term budget crisis.
quote:Keep in mind here that the deal was for 75 YEARS
It took the private investor group roughly 10 to 15 years to recoup their initial $1.15 billion investment.
quote:
The deal is widely regarded as one of the worst privatizations in U.S. history, as all upfront funds were spent, leaving the city with decades of lost revenue and high consumer prices.
And so many people want to give government more power and have them take more of yours and my money. Wild stuff.
This post was edited on 5/7/26 at 4:34 pm
1
Posted on 5/7/26 at 4:36 pm to Major Dutch Schaefer
Just glad Latoya got to travel first class…
Posted on 5/7/26 at 5:08 pm to BPTiger
quote:
So $100 million today instead of $212 million over the standard term.
I read it was 103 to 146. That's about 7.3%.
Posted on 5/7/26 at 5:22 pm to Chucktown_Badger
quote:
Reminds me of the city of Chicago and one of the most lopsided deals in the history of politics...when they sold the city's parking meters for 75 years to private equity.
Besides being nothing like that deal you are right.
Posted on 5/7/26 at 7:23 pm to fightin tigers
If they really keep it in the bank and let it accrue interest it’s not horrible. It should lower the interest they have to pay on bonds so while on paper looks bad it actually may be OK.
Posted on 5/7/26 at 7:31 pm to Optimism
It is a decent chunk of money, but around 2% of the budget during that period.
Remains to be seen how this all shakes out. Maybe those holding the purse strings are a little more sensible. The CAO seems to be fiscally intelligent so we can hold out a glimmer of hope.
Remains to be seen how this all shakes out. Maybe those holding the purse strings are a little more sensible. The CAO seems to be fiscally intelligent so we can hold out a glimmer of hope.
This post was edited on 5/7/26 at 7:32 pm
Posted on 5/7/26 at 7:34 pm to Major Dutch Schaefer
Less than five years before the city will have to file for bankruptcy.
Posted on 5/7/26 at 7:37 pm to TigerTatorTots
quote:
If they are passing on $212 mil over 9 years for the $103 mil lump some today, its not as bad as it looks. Its a time value of money thing. With a 10% hurdle rate, $212 mil over 9 years is break even to $136mil today. So yea, the $212mm over 9 years is better, but they aren't cutting the value in half like it looks on paper
You're assuming that New Orleans will use that properly. They will just waste it. It is a terrible idea
Posted on 5/7/26 at 8:10 pm to TheOcean
quote:
You're assuming that New Orleans will use that properly.
Not sure how you define properly, but I have high expectations for the team Helena put together. Most are legit professionals with success in both private and public sector.
Posted on 5/7/26 at 8:39 pm to TheOcean
quote:Sure, but they'd also probably waste it if they kept the annual payments too
You're assuming that New Orleans will use that properly. They will just waste it. It is a terrible idea
Posted on 5/7/26 at 9:06 pm to BayouBandit24
This will cost the city at least 60m in revenue and will cause a budget shortfall for the next 9 years.
Posted on 5/7/26 at 9:10 pm to Napoleon
All else equal? And if so, what benchmark?
Eta
Mike Waguespack seems to approve of the move.
Eta
Mike Waguespack seems to approve of the move.
This post was edited on 5/7/26 at 9:11 pm
Posted on 5/7/26 at 9:12 pm to RunninReb
quote:
Absolte tards.
Perhaps more desperate than tard?
Posted on 5/7/26 at 9:15 pm to Napoleon
quote:
This will cost the city at least 60m in revenue and will cause a budget shortfall for the next 9 years.
$60MM short against what will likely be over $15B in budget expenditures
Posted on 5/8/26 at 9:33 am to fightin tigers
democrats taking out a pay day loan who would have guessed
Posted on 5/8/26 at 10:09 am to RunninReb
quote:
Sure they got $100mil but they had to take an 8.25% discount on those rent payments, which is the equivalent to junk bond status.
To be fair, Teedy ran the city's credit rating so far into the shitter, I doubt they could even sell bonds at 8.25%.
Posted on 5/8/26 at 10:29 am to MMauler
Giant private equity firm with armies of smart lawyers and finance folks that do this every day
vs.
the big brains of New Orleans politics
I wonder who got the better end of the deal?!
vs.
the big brains of New Orleans politics
I wonder who got the better end of the deal?!
Posted on 5/8/26 at 11:14 am to Texas Tea 123
exactly
Posted on 5/8/26 at 11:50 am to Major Dutch Schaefer
quote:
Council members approved the deal on the condition that the city uses the funds exclusively for emergency reserves
Posted on 5/8/26 at 3:26 pm to fightin tigers
quote:
Besides being nothing like that deal you are right.
So a city selling rights to future revenue for a lump sum now is nothing like a city selling rights to future revenue for a lump sum now...got it.
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