I’m kind of proud of myself. I don’t want to bore y’all with another article on fiscal mismanagement in Richmond, Virginia, but I’ve had a mini-brainstorm. I am sure your city, like mine has a council of ignoramuses who always fall for the latest pie in the sky idea for the taxpayers to fund what should be solely private initiatives. As stated in my ARTICLE last week, Richmond wants to put taxpayers on the hook for $170 million in bond funding (requiring a $280 million payout) for a Double A Minor league baseball stadium. None of the lemmings in the City administration or on City Council have ever built anything. None know anything about finance, loan covenants, large operating concerns, etc. Yet, almost all council members are telling the taxpayers that the project poses “No Risk” for the City. If that’s the case, then why shouldn’t these officials who have a fiduciary obligation to taxpayers guarantee the debt and indemnify the taxpayers for any losses? Isn’t this the political tool taxpayers need to bludgeon these spenders into submission. I’ve borrowed $100 million for various projects over the years. I can’t imagine telling any of bankers how great my project is, but not being man enough to stand behind it by personally guaranteeing the loan, nor can I imagine any of my banks lending the money without any skin in the game. Shouldn’t we expect the same standards from government officials borrowing money from taxpayers, especially for non-essential services?
Below please find my recent letter and indemnification and guaranty agreement. I will zap you the word document if you’d like, but why shouldn’t taxpayers put every local official on the spot. “Will you sign this agreement?” And maybe, city charters and state legislatures can enact legislation demanding that the folks who vote for public funding for what essentially are private businesses have to guarantee the debt.
Dear City of Richmond Officials:
Pursuant to my last letter to you and the concerns I wrote about in the following nationally published article , I suggest that all of you who plan to vote for the Diamond District proposal “put your money where your mouth is” and indemnify taxpayers for any losses, and personally guarantee the debt of the proposal. You have a fiduciary obligation to the taxpayers of Richmond; you’re “playing” with other peoples’ money.
You have done a classic bait and switch, stating for years that the City will have no liabilities and suddenly wanting to obligate the City to a massive amount of debt right before the vote to approve the project. Taxpayers are told that there will be “no risk.” If that is true, certainly each of you will have no problem executing the attached INDEMNIFICATION AND GUARANTY AGREEMENT. It would be a good faith gesture that you are fully confident in the numbers that you are obligated to understand in detail. Should you not be willing to sign it, then clearly, you are approving a plan that you know is fundamentally flawed.
Respectfully,
Robert C. Smith
INDEMNIFICATION AND GUARANTY AGREEMENT
This AGREEMENT is between the City of Richmond, as representative of its taxpayers and Promoters of the Diamond District development plan and covenants and warrants as follows:
WHEREAS, elected representatives and various employees of the City of Richmond (hereafter “Promoters”) are promoting that the City of Richmond obligate itself to the development proposals of the Diamond District which include the City issuing over $170 million in bond funding; and
WHEREAS, these promoters have publicly stated that the Diamond District proposal poses no financial risk to the City; and
WHEREAS, the Diamond District proposal includes a 40% minority contractor provision and a 40% labor union provision, both of which are likely to be challenged in Court; and
WHEREAS, the Diamond District proposal demands that up to 20% of the residential construction be “rent controlled,” by the City and thus jeopardizing the success of the project; and,
WHEREAS, the City has a long history of interfering in the private sector to publicly fund real estate and other initiatives that become complete and utter failures, and
WHEREAS, the City has proven itself completely incapable of administering the simplest of tasks, such as cutting grass, sending out accurate utility bills, fixing potholes and sidewalks, removing graffiti, etc., all of which makes the likelihood of the Diamond District happening as proposed by Promoters near 0%; and
IN SO FAR as these promoters are fiduciaries of the City’s finances have made representations to the City and its taxpayers, that these promoters joint and severally guarantee all of the City’s obligations under the Diamond District proposal; and that the Promoters indemnify the City for any losses or expenditures that exceed the budgets as stated in the Diamond District proposals represented to taxpayers,
NOW, THEREFORE, FOR and IN CONSIDERATION, of the mutual promises and undertakings of the parties hereto, Promoters and the City of Richmond agree as follows:
That should the Diamond District proposal be approved by City Counsel, that the Promoters
1. guarantee all City obligations, joint and severally, including but not limited to all bond funding, and that,
2. the Promoters indemnify the City, joint and severally for any expenditures that exceed the budget of the Diamond District, and for any and all losses the City incurs in relation to the Diamond District, and that,
3. when the City is sued due to malfeasance, incompetence, breach of fiduciary duties and intentionally violating civil rights by voting on and administering blatantly unconstitutional provisions, that the Promoters pay the City of Richmond its legal costs (to include the salaries and wages of City employees and the costs of outside counsel), its costs and all damages awarded to such plaintiffs including any amounts of compensation that become the subject of a settlement agreement, and that,
4. for every housing unit that is subsidized by the development, each promoter pay on a pro-rata basis the difference between the rent subsidized and the market rate of rent for that unit, and that,
5. each Promoter warrant that it will not receive any financial favor, whether in cash, in kind or in the form of any compensation, remuneration, gift, grant or any other means to himself, associate(s) or any family member from any party associated with the Diamond District or any agent, employee or subsidiary of any such party.
Dated this _____ day of ______________, 2024.
PROMOTER CITY OF RICHMOND
_______________________ _________________________
By: Levar Stoney, as individual By:
PROMOTER
_______________________
By: Lincoln Saunders, as individual
PROMOTER
_______________________
By: Andreas D. Addison, as individual
PROMOTER
_______________________
By: Katherine Jordan, as individual
PROMOTER
_______________________
By: Ann-Frances Lambert, as individual
PROMOTER
_______________________
By: Kristen M. Nye, as individual
PROMOTER
_______________________
By: Stephanie A. Lynch, as individual
PROMOTER
_______________________
By: Ellen F. Robertson, as individual
PROMOTER
_______________________
By: Cynthia I. Newbille, as individual
PROMOTER
_______________________
By: Reva M. Trammell, as individual
PROMOTER
_______________________
By: Nicole Jones, as individual
