Attorney Lindsay Fischer, who has publicly expressed doubts about the legality of the city’s plan to fund the economic development agreement with the U.S. Olympic Committee, says the city is making last-minute changes to the deal’s funding structure.
The city’s initial plan was to sell certificates of participation secured by a mortgage on the building at 27 S. Tejon St. that is scheduled to become the new USOC headquarters. That proved unworkable because COPs purchasers want their investments to be secured by so-called “essentialities,” buildings and structures that are crucial to municipal function, making default more improbable.
The city then proposed that the COPs be secured by liens on the Police Operations Center and, if necessary, upon one or two fire stations.
However, Fischer argued during a meeting of City Council last Thursday that such securities would be bonds in all but name, and, unlike COPs, would require voter approval.
Fischer said that during a conference call with City Attorney Pat Kelly and bond attorney Bob Hand this morning, he was informed that the city has changed the plan yet again.
According to Fischer, the city now plans to transfer ownership of the POC and the fire stations to the Public Facilities Authority, an entity created and controlled by the city which functions as a pass-through for COPs financings.
The PFA would then issue the COPs, which would be secured by city lease payments on the POC and fire stations in amounts sufficient to service the debt.
Fischer said that Hand and Kelly, who were unavailable for comment early this afternoon, told him that the revised structure would pass legal muster, and be safe from challenge.
Fischer isn’t so sure.
“You can paint the word ‘cow’ on a pig’s back, but it’s still a pig,” he said. “And this last-minute switcheroo is clearly fraudulent.”
Contacted minutes prior to this afternoon’s City Council meeting, Vice Mayor Larry Small said that he hadn’t heard anything about changes to the deal.
“I know that Pat was going to talk to Lindsay Fischer about (his concerns) this morning,” he said, “but I don’t know about any changes.”
Fischer said he hasn’t decided whether to file suit against the city.
“I’m seriously considering filing a lawsuit pro se,” he said. “I’ll represent myself as the plaintiff. I don’t want other plaintiffs with their own different agendas and ideas to dictate how to proceed.”