California's Latest Deadbeat Property Owner: The City of Stockton

How broke is California's 13th largest city? This broke: It's about to get its city hall repossessed. Some pertinent details from The Record in Stockton:

City government never moved into the building, which it bought in 2007 by issuing $40.7 million in bonds. […]

City officials had hoped to trade in their historic clunker at 425 N. El Dorado St., fill several floors of the WaMu building with all staffers from the old City Hall and from the adjacent city permit center and save around $250,000 a year.

But the crash dried up the $1.5 million in moving money.

Facing a $15 million shortfall this fiscal year, the council voted Feb. 28 to default on several lease-revenue bonds. […]

The city hoped to pay for the building with lease revenue. But the building is only 41 percent occupied. […]

Simultaneously, variable interest rates on the bonds, initially low, rose dramatically. The city projects the building will lose $3 million in fiscal 2012-13.

As if that weren't enough, the building's value has nosedived far below the $35 million purchase price, which the city paid at the peak of the boom.

Reason has been on the muni-bankruptcy beat for a long time. Some highlights from the archive, in reverse chronological order:

* "Detroit's Slow Fiscal Death March," by Shikha Dalmia

* "Coming to a Municipality Near You: Bankruptcy," by Shikha Dalmia

* "Rhode Island Cities Run Out of Other People's Money," by Matt Welch

* "Is Your Town About to Go Bankrupt?", by Tim Cavanaugh

* "Farewell, My Lovely: How Public Pensions Killed Progressive California," by Tim Cavanaugh

* "The Municipal Debt Bubble," by Veronique de Rugy

* "Sweet Smell of Bankruptcy: Bay Area City Manager Looks at Life After Default," by Tim Cavanaugh

* "'Even bankruptcy may not be enough to break the grip that unions have on the public purse,'" by Matt Welch

* "We Are So Totally Out of Money," by Matt Welch

* "My City Was Gone," by Jesse Walker

And here's reason.tv asking the question, "Is Harrisburg's Nightmare America's Future?"

Comments

[ChrisO]

20 years ago, I remember driving over Stockton on I-5 and thinking, "thank God I don't live there." Apparently, nothing's changed.

[Drake]

That is how I think of CA in general these days.

[DJF]

What they need is a professional hockey stadium and possibly a monorail.

[Jerry]

Railroad station!

[cw]

Railroad stadium

[RBS]

There's nothing on earth like a genuine, bona fide, electrified, six car monorail.

[R C Dean]

So, why don't they just eminent domain the WaMu building?

[sarcasmic]

I was thinking the same thing. Just steal it. Who are they going to call? The cops?

[cw]

I hear reneging on bondholder agreements is all the rage in Europe.

[ChrisO]

They'd have to write a check to the new owner if they used eminent domain following the repossession.

Here's an idea, maybe they should make the city's workforce conform to the size of their existing city hall. That would solve multiple problems.

[Red Rocks Rockin]

Maybe they should rent some dollies from Uhaul and cart everything over there themselves.

[ChrisO]

Apparently, you've never dealt with unions before.

[cw]

Wow, I hadn't seen that video until now. Even central planning at the local level is an outright disaster. Why isn't Harrisburg's former mayor in jail?

And yet, the clueless Occupiers stand at street corners demanding more taxpayer money for themselves. Guess what, Harrisburg Occutards: your favorite Democratic central planners spent other people's money into oblivion! There's none left for you, parasites.

Simply amazing, if not downright depressing.

[Mr. Soul]

Can't the Barclay's just lend Stockton the money. I hear they got plenty on that spread outside-a-town.

[Mr. Soul]

I suceeded if you're humming the Big Valley theme now.

[Stefan]

What they need is a skilled dance shoes athletic field and perhaps a monorail.Atlanta escorts