acquisition, preparation and improvement of 15.5 acres of prime
downtown real estate. Since some of the 15.5 acres have not been
purchased, this is an estimate; as with past estimates for the
project, the cost may go higher. The figure is already understated. A
portion of a $48-million bond issue (secured by property taxes) will
be used for land acquisition; bond interest is $25 million. The
$77.1-million figure ignores the portion of the $25 million
attributable to the project. It is clear that the actual costs in
public funds will probably be in the $100-million range.
Of the 15.5 acres acquired with these public funds, 8.5 acres will
be given free to Mr. Caruso. He also gets four acres on a $1-a-year
lease for 95 years (essentially ownership). Finally, he gets free
ownership of the land under our 1.8-acre park for underground
parking; the public retains only the top four feet. Just 1.2
unencumbered acres, improved with public funds for pedestrian access
to Mr. Caruso's project, will be retained by the public.
History tells us that the 8.5 acres and the $1-a-year, 95-year
lease can only dramatically appreciate in value. The audit states the
public will share in the appreciation only if the project is sold
within 20 years. However, before we can take our share, Mr. Caruso
gets 78% of the profits. Next, from the remaining 22%, he is
reimbursed for each annual shortfall he may have experienced in his
preferred return of investment (ROI). (Audit figures for the expected
shortfall are in the Page 21 chart; they project a $1-million
shortfall.) Only then will the city share equally with Mr. Caruso in
the remaining profit, if any.
Finally, the environmental impact report states the city must
annually spend $900,000 for an additional Fire Department emergency
medical unit and the added annual cost for seven more police
positions. The audit fails to mention these yearly expenses.
That is what is coming out of our pockets -- what is Mr. Caruso's
investment? The Feb. 14 staff report indicates it will cost him $133