Warren Buffett coined the term “skin in the game” when referring to Wall Street investors using their own money to buy stocks in the companies they are running. Meaning, executives can talk all they want about confidence but confidence is putting one’s own money on the line just like outside investors.
Recently the Moreno Valley City Council voted to push through a proposal to improve the value of 200 acres of land owned by developer Iddo Benzeevi by shifting $75 million of the city’s street improvement funds to improve streets for a large medical complex on his undeveloped land. The city, like most cities, is strapped for cash so they are deciding to forgo street repairs or improvements anywhere else in the city until this idea becomes a reality. The reality is uncertain since nothing has been approved and this would be years down the road. Councilman William Batey, II was the only dissenting vote stating that he couldn’t support neglecting other parts of the city to benefit one development. Now the citizens of Moreno Valley can sit by and wait until the potholes become so large on their street or they can complain and address this issue now before the people who are making the decisions by attending the Moreno Valley city council meetings. Chances are if you wait, many of the current city council members will not be there when the large potholes appear in the streets and the current city manager will negotiate a good financial settlement to leave and go to work for the developer. The new council will say we don’t have the money to fix your streets because the other council obligated all of it to improve streets for a medical center that may or may not be built. The new council will also say why didn’t you complain then?
I guess I could contradict myself and say that this developer has put some skin in the game in a way…through his funding of entitles like the “Moreno Valley Taxpayers Association” for hundreds of thousands of dollars to launch negative attacks on council members who are not his advocates and support the races of council members who will be sympathetic to his interests. Now some of these city council members are putting $75 million of taxpayer money into street improvements to benefit this developer’s vacant property for an unapproved medical complex. According to an article in The Press Enterprise project leaders have implied that Kaiser Permanente and UCR School of Medicine are partners in the project. The response from these entities is that they are not in partnership with this project, but they had nothing to say against it either. The mayor and council members are trying to sell this idea by aligning themselves alongside reputable medical institutions but in my opinion it does not pass the smell test.
That is why it is important that the citizens of Moreno Valley go to the next city council meeting and ask the hard questions: How many of you have received money from this developer? Was the developer on the selection committee to hire the city manager? Why would you take all of the street improvement money to improve his property? How much money has he contributed to the development of the land? When will this medical center complex be completed? What is the approval process? Who and what agencies would have to approve such a project? When and how will my streets be improved if all the money is given to improve that area of the city?
One thing is clear to me, the only people with any skin -- $75 million -- in this game are the taxpayers and they are not playing ball. The cities of Bell, San Jacinto, and Vernon could be pale in comparison to what is about to happen in Moreno Valley.
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