[3/12/09 4:00 PM UPDATE: See top comment in the comment section of this post for some good background information on this story.]
Alright folks. You've seen the type of blogging I have done over the past three years. And many of you may recognize, every now and then, ZD's "Rainman" Five Minutes to Wapner feeling kicks in. Peter Parker calls it his "Spidey-senses." Well, ZD has a feeling about this whole Meruelo Maddux story that hit the newswires yesterday.
Meruelo Maddux Announces 2008 Fourth Quarter and Calendar Year Results PR Newswire (press release) - 21 hours agoLOS ANGELES , March 11 /PRNewswire-FirstCall/ -- Meruelo Maddux
Meruelo Maddux says it may file for bankruptcy San Francisco Chronicle - 9 hours agoSouthern California real estate developer Meruelo Maddux Properties Inc. says it has been unable to service much of its debt and may have to file for ...
Big L.A. landlord Meruelo Maddux may file for bankruptcy Los Angeles Times - 17 hours agoThe company reports steep losses in the fourth quarter and says it is unable to meet its debt payments. By Roger Vincent Meruelo Maddux Properties Inc., ...
Meruelo Maddux Warns About Finances Los Angeles Business Journal - 19 hours agoBy DEBORAH CROWE Meruelo Maddux Properties said Wednesday it had stopped making payments on 26 real estate loans totaling $266 million, and that independent ...
And the feeling is based on things I have heard over the past three years, as people tend to like to tell ZD all the shady things that are going down in Downtown. (They keep telling me to see "Chinatown.") So when I saw this story yesterday, a whole bunch of names came to mind and dots were connected in my mind, and here's the post based on it all.
From what I have heard on the streets of Los Angeles and inside Council chambers is that Meruelo Maddux is probably the biggest developer in Downtown Los Angeles. If you check the campaign contributions of Los Angeles Mayor Antonio Villaraigosa (now running for Governor of California), during the campaign when he first got elected mayor, you'll probably see this name near the top of the list of overall contributors. THAT'S A LOT OF CASHOLA!!!
BUT, Zuma Dogg keeps reminding people to read the story of the "Frog and the Scorpion" before they do business with Antonio Villariagosa, because YOU are the frog and HE is the scorpion. So he will always treat YOU the same as he treats everyone, whether you are a member of some small community group he makes a campaign promise to, or one of his biggest campaign contributors. As soon as he got into office, he slammed the door on EVERYONE, including these guys, too.
So Antonio probably doesn't have to be as nervous about this (outside of the fact big contributors aren't real happy when they get "NADA" for the dinero).
BUT NOT SO FAST RICHARD ALARCON AND TONY CARDENAS! If ANY two people at city hall should be nervous as f*ck that the bottom has fallen out on this "front end loaded management/money pilfering/public stock fraud case waiting to happen" it's those two.
About the FIRST thing ZD was pulled over to the side and told about by City Hall insiders frustrated by the situation, is that Alarcon, Cardenas, former L.A. City Councilmember Alex Padilla and ASSemblymember Fuentes have their own little developer power-base going with some HEAVY connections that are more powerful forces than some little councilmember, who is nothing more than a bullet-train stop through town in the long run. (Councilmembers come and go. Powerful, connected developers see 'em all come and go thanks to term limits. (Which aren't so limited anymore.)
AND the power-base that backs the above mentioned elected officials is Jim Aveedo. (Last name changed slightly to protect the innocent, like me.) Jim pushes his little puppets around and has them get sh*t done, for him. And, they get to stay in office and get moved into other offices when they are termed out.
AND, if you look around, like at the CRA, for example, you may find that Meruelo-Maddux is pretty "warm and fuzzy" with Alarcon, Cardenas, Padilla and Fuentes.
So it's like the MM crew vs Antonio's crew. Both side fighting for their piece of your pie.
BUT, as we all know, the economy can no longer sustain all this "front end loaded management contracts" and overall fund cyphoning and pilferage the way we used to be able to sustain it.
So with all that expensive downtown property sitting vacant, sinking in value...now the LA Times reports, "The company reports steep losses in the fourth quarter and says it is unable to meet its debt payments." Well, I wish the Church Lady were here to say, "Well isn't THAT special." Sorry kiddies, all the money disappeard at this PUBLICLY TRADED COMPANY, and the shares are about to be worth about a penny on the dollar.
But less importantly than the Wall Street investors who got burnt...THIS WILL SINK THE CITY OF LOS ANGELES! SO MUCH FOR RETURNING DOWNTOWN TO THE ECONOMIC HUB IT SO FOOLISHLY THOUGHT IT WAS GOING TO DO.
Grand Ave...A BUST! And now, the biggest Downtown developer is going belly-up like Enron and the rest of the flim-flam, scam artists.
AND YOU WILL SEE PEOPLE GOING TO JAIL OVER THIS! So that's why some folks around the city aren't real comfortable, right now.
PEOPLE...this could end up being just some typical news story that comes and goes in the news cycle like the rest of them. BUT, I think this will be the biggest story that will be UN-RAVELING like a cheap sweater bringing down a whole lot of schemes, and I think you'll see at least ONE PERSON take the fall in court. So it's a matter of who else gets caught up in the collatoral damage. AND ZD FEELS THERE WILL BE!