Threat to torpedo Richmond's plan to help home owners through eminent domain dodged, for now

|
(28)
Early yet
Photo by Joe Fitzgerald Rodriguez
The crowd gathers at the Richmond city council meeting a full hour before it starts. By the time of the meeting all the seats on the floor were filled, and then some.

Last night, Richmond’s controversial plan for preventing home foreclosures using eminent domain was almost torpedoed. The stage was the regular Richmond City Council meeting, where its members fought a drag out, bare-knuckle fight with at least three hundred Richmond residents in both corners of the issue crowding the auditorium.

Last night, advocates for city intervention against the banks won.

The Richmond City Council voted 5-2 against a resolution to rescind the city’s offer to purchase 624 underwater mortgages and halt any effort by the city to seize those mortgages through eminent domain

A separate resolution by Mayor Gayle McLaughlin to establish a joint powers authority, uniting cities to battle litigation against the eminent domain plan, also passed. 

The resolution against the plan was called for by Vice Mayor Courtland “Corky” Boozé and Councilmember Nathaniel Bates, who were the only two votes supporting it. With 51 percent of Richmond’s houses saddled with underwater mortgages, the city is facing a cascade of issues: blight, increased crime, and a lower tax base that is crippling their government. This led McLaughlin to partner with an outside firm to potentially seize mortgages with eminent domain, allowing homeowners to pay off their mortgages to the city at lower rates and avoid foreclosure.

Boozé and Bates said that with Wells Fargo suing the city to halt the plan, the city risks bankruptcy. The effort to seize mortgages through eminent domain, they said, puts nothing less than Richmond’s financial solvency on the line. 

Nobody disagreed with them. 

“My vote is not supposed to be if (Wall Street investors) are a bunch of jerks and I want to stick it to them,” Councilmember Jim Rogers said to the audience. “What I am going to say is that a 1 percent chance of bankruptcy from this program is a deal breaker for me.”

After laying off a third of the government’s workforce in lean economic years, Rogers has reason to worry. And at the meeting the main concern was Mortgage Resolution Partners, the group that partnered with Richmond to hatch the eminent domain plan in the first place. Could MRP financially back the city if Richmond lost a lawsuit worth hundreds of millions?

The city’s manager, Bill Lindsay, laid out the risks for those in the auditorium.

First of all because no city has ever tried this before, he said, no liability insurance exists for this kind of work, which MRP has acknowledged. “If you believe the potential loss (of a lawsuit) is catastrophic, its important to acknowledge thats an issue,” he said.

He also said it was tough for the city go it alone as a single entity, explaining the need for a joint powers authority, which would build a coalition of cities against Wells Fargo and other litigants. 

State law requires a supermajority of the council, five members, to back any eminent domain action and only at the time that it would take place, he said. 

Hours of back and forth passed between the city manager and Boozé who, after some arguing, frustratedly asked the audience, “Are 110,000 people worth fighting Wall Street for?”

The crowd roared their answer immediately: “YES!” 

The ideological split of the audience was clear as day: Eminent domain supporters wore yellow shirts with a logo of the activist group Alliance of Californians for Community Empowerment, and those against wore red shirts branded “Stop Investor Greed.”

They divided the gym like bitter parties of a political bride and groom. 

Those sporting the red shirts were mostly from the real estate industry, and in public comment they generally expressed that if someone were to lose their home, well, “so what?”

Lisa Johnson, clad in red, said, “My house is an investment, not a right.” 

A representative from Richmond’s Council of Industries asked the mayor to reconsider the eminent domain plan, and to rescind the initiative. 

Jerry Feagley, whose Feagley Realtors has sold homes since 1966, said the plan risks damaging all of Richmond’s ability to get credit. He was a seemingly mild-mannered man who is exactly who you’d picture if you think of a businessman from the ‘50s, grey suit and all.  “If this would go into effect, this would change loans in the entire country,” he said, passionately. 

Well, that’s kind of the idea, the supporters countered. 

“I was at the March on Washington with Martin Luther King 50 years ago, yes, I’m that old” said one woman. She was bent over with age but spoke with volume. “That’s exactly what we have to do. We’re going to have to met power with power and challenge the status quo.”

Well over 50 supporters came to speak at the podium. The meeting started at 7pm, and stretched on well past one in the morning. If there was one central theme to their sentiments, it was this: Richmond has hit rock bottom, and now is the time to fight back.

Councilmember Butt put it in plain terms. “What we’re voting for is a giant game of chicken, and it’s clear two of my colleagues have blinked,” he said, referring to Boozé and Bates. 

“I’m not blinking,” he said.

The council voted, and amid the turmoil and arguing and anger, the Boozé and Bates measure to scuttle the eminent domain plan was scrapped.

Having already lost once that night, Bates did not fare well when time came to vote on forming a coalition of cities to battle litigation, called a joint powers authority. El Monte may be the first to join, Mayor McLaughlin said, which would help homeowners in need who are often people of color.

Bates countered that McLaughlin should look out for “her people” and not try to use “his people” as a front for her legislation. “You don’t speak for my community,” he said, referring to African Americans.

When another black council member, Jovanka Beckles, spoke up to thank her “white brothers and sisters” for joining in a fight for justice, Bates was uncompromising.

“You are not African American,” he told her. 

Boozé also had words for the other dissenting African American Councilmember Jael Myrick. “One day you’ll have to stand up and be black,” he said.

Mayor McLaughlin’s measure to form a joint power authority then passed 4-3, with council members Boozé, Bates and Rogers dissenting. 

The last remaining supporters waved their yellow flags and the dwindling crowd clad in yellow shirts left victorious, for now.

Comments

Richmond would be better off if the courts issue an injunction banning this as unconstitutional.

Worse would be that Richmond goes ahead and then gets sued by every investor in every mortgae-backed bond containing a Richmond mortgage.

Is it worth saving a few deadbeat homeowners and then have to lay off half your cops? What would that do to home values?

Posted by anon on Sep. 11, 2013 @ 2:20 pm

you should be ashamed of yourself for calling people willing to risk so much, dead beats. this is a battle of ideology. you are clearly on the losing side with your aggression coupled with ignorance

Posted by Guest on Oct. 14, 2013 @ 3:15 pm

this is simply a barrier against trolls

it is a signpost to indicate to the reader that other anonymous posters on this thread are beginning to purposely diminish the conversation into repetitive reactionary hyperbole, and/or petty, mean spirited personal attacks and irrelevant bickering

the barrier is put in place to signal that there is probably little point in reading more replies in the thread past this point

proceed at your own risk

Posted by wall on Oct. 14, 2013 @ 3:45 pm

this is simply a simpleton's simple simplicity

Posted by no troll on the waterfront on Oct. 14, 2013 @ 4:15 pm

i have to admit, your sarcastic post made me laugh uproariously at both myself and the nutball situation that has caused me to believe that these barriers must be put up no matter how irritating

however, though your post was really funny

it won't stop me from doing this brother

i am going carpet bomb as many troll comments on this site as i can with barriers until the editors face the reality that they have to institute a registration policy

Posted by racer x on Oct. 14, 2013 @ 4:29 pm

And, as usual with the left, it involves non-democratic bullying to try and achieve a goal.

Funny thing is, I am fine with registration, because I know how to work it. You'll be the one this rebounds on.

Posted by Guest on Oct. 14, 2013 @ 5:04 pm

then I would make a point of not capitulating to his bullying and hijacking of this forum, on principle.

And send a message to trolls like racer that their perverse dishonest tactics will never prevail.

Posted by anon on Oct. 14, 2013 @ 5:13 pm
Posted by Guest on Oct. 14, 2013 @ 5:23 pm

Yeah, this is nothing more than a low-level, inept, DDOS attack.

Posted by LOL barrier! on Oct. 14, 2013 @ 5:29 pm

to get a bunch of trolls to leap on a post like a pack of hyena onto a solitary small piece of meat

do you idiots ever get tired of being trolled yourselves?

or is it, instead, that you are just too stupid to realize it is happening to you?

;)

Posted by racer x on Oct. 14, 2013 @ 6:04 pm

this is simply a barrier against trolls

it is a signpost to indicate to the reader that other anonymous posters on this thread are beginning to purposely diminish the conversation into repetitive reactionary hyperbole, and/or petty, mean spirited personal attacks and irrelevant bickering

the barrier is put in place to signal that there is probably little point in reading more replies in the thread past this point

proceed at your own risk

Posted by wally on Oct. 14, 2013 @ 6:11 pm

Anyone else notice that Lilli is hardly posting under his mic, once the avalanche of "troll barriers", "troll bumps", "preventative troll wall barriers", etc. really got going?

"i am going carpet bomb as many troll comments on this site as i can with barriers"

The Koch brothers thank you for helping to shut down this left-wing site down.

Posted by LOL barrier! on Oct. 14, 2013 @ 5:15 pm

Especially since Lilli has a track record of trolling and being banned, at SFGate, by his own admission.

Lilli also has no job and no life, so clearly has the time to be erecting barriers 24/7.

And both racer and lilli have demonstrated that they have very little knowledge about tech.

And yes, the irony is that while they claim to be trying to save this site, they are actually destroying it. If the forum cannot be the exact way they want it, they'd rather it didn't exist at all.

It's called throwing the baby out with the bathwater.

Posted by Guest on Oct. 14, 2013 @ 5:22 pm

to get a bunch of trolls to leap on a post like a pack of hyena onto a solitary small piece of meat

do you idiots ever get tired of being trolled yourselves?

or is it, instead, that you are just too stupid to realize it is happening to you?

;)

Posted by racer x on Oct. 14, 2013 @ 6:07 pm

I'm just playing you like a fiddle.

Posted by Guest on Oct. 14, 2013 @ 6:14 pm

to the grapes....

once you get done looking up that reference (as you are clearly too much of an ass and too poorly educated to recognize or remember it) we'll see what your next brilliant show of troll deftness shall be

Posted by racer x on Oct. 14, 2013 @ 6:30 pm
Posted by wally on Oct. 14, 2013 @ 6:15 pm

without bearing any risk, which of course falls at the feet of the city and it's taxpayers.

If I lived in Richmond and was not one of the few hundred (less than 1%) of Richmond's population who will not directly benefit from this, then I would be scared shitless of what these ideologs are trying to do.

You fight authority from a position of strength, not weakness.

Posted by Guest on Sep. 11, 2013 @ 2:26 pm
Posted by accident claims on Sep. 13, 2013 @ 7:25 am
Posted by wally on Oct. 14, 2013 @ 4:31 pm

their strength comes from building a coalition and resisting together. we have always had the strength, in numbers, in the masses. fear breeds aggression and your comments show what you are feeling

Posted by Guest on Oct. 14, 2013 @ 3:16 pm

this is simply a barrier against trolls

it is a signpost to indicate to the reader that other anonymous posters on this thread are beginning to purposely diminish the conversation into repetitive reactionary hyperbole, and/or petty, mean spirited personal attacks and irrelevant bickering

the barrier is put in place to signal that there is probably little point in reading more replies in the thread past this point

proceed at your own risk

Posted by wall on Oct. 14, 2013 @ 3:50 pm

they should pay off the remaining debt on those loans and then issue new mortgages at a lower rate to the homeowner.

Lowballing the current noteholders and using ED just isn't going to fly and isn't worth the risk that they are taking (IMHO)

Posted by GuestD on Sep. 11, 2013 @ 3:24 pm

then EM could be used to justify just about anything that a city official claims is in the public interest.

Richmond will get sued up the wazoo on this.

Posted by Guest on Sep. 11, 2013 @ 3:37 pm

Wanna buy a house in Richmond?

Bring cash!

You don't think you'll be able to get a new mortgage in Richmond after this, do you?

Posted by A New Cash-Only Business! on Sep. 12, 2013 @ 10:04 am

Mortgages will be harder to find and more expensive in any event, but the FHA have already asked Fannie and Freddie to review procedures in any city that does this. Those agencies are under no obligation to purchase and securitize mortgages, so Richmond borrowers could find themselves out in the cold here.

Richmond will also find it harder to float muni bonds as well. And of course may face multi-million dollar lawsuits from mortgage bondholders.

Posted by Guest on Sep. 12, 2013 @ 10:22 am
Posted by wally on Oct. 14, 2013 @ 4:22 pm

Home insurance is very necessary for the Home Owners. It will help them to recover their homes whenever damages due to Natural disasters. If you have your Insurance policy for your house, then you can claim for your insurance money.

Posted by Christan on Dec. 13, 2013 @ 5:13 am

Post new comment

The content of this field is kept private and will not be shown publicly.