Should the city of Riverside sell off surplus properties? Yes. There, wasn’t that easy?
Not so fast. This notion is loaded with some complicated context.
First, the why. About a year ago, city staff informed the council that three properties – the Fox Entertainment Plaza (which includes Fox Theater), Riverside Municipal Auditorium, and Riverside Convention Center – had a high “liquidation value.” The then-council responded by directing the staff to produce a comprehensive list.
The list came to 20 properties – including the three originally mentioned – and staff recommended against selling some of them (on the big items, the staff said yes on Fox and convention center, no on auditorium). In fact, a July 8 revised list showed staff recommended not selling 10 of the 20, but still urged sale of the Fox and convention center.
A staff memo accompanying the revised list said the purpose of any sale is to generate funds, or reduce operating costs, and use the money to defray part of the city’s unfunded pension obligations.
Admirable goal, right? Well, yes, but the city’s unfunded obligation, which is growing rapidly, is already well over $500 million. The city has floated a pension obligation bond for several hundred million dollars, the better to get lower interest rates on payments, but the debt itself hasn’t gone anywhere.
And the cause of that obligation – agreements with employee unions that promise workers much higher salaries and pensions than Riverside taxpayers can afford – hasn’t gone away.
Even if Riverside sells of all of its surplus property, it won’t stop the pension bleed until the council grows a spine and stops making exorbitant, vote-buying deals with unions. Don’t hold your breath. Most council members, particularly those who took office in December, are union through and through.
Unions are good at protecting union administrators’ jobs, getting goodies for union members who are working, and securing the services of certain elected officials to reliably deliver those two benefits. Everybody else can go pound sand. With these new council members eager to handle those deliveries and bereft of humility, you can see where the city is headed – it boils down to “they win, you lose.”
The pension problem is only the headline-grabbing overlay of a budgetary picture that’s grim in other ways, too. Riverside’s spending has outrun tax receipts repeatedly. The city has used reserves to square up the operating budget. Its chief financial officer last year warned that the city by 2022-23 could become insolvent, and that was before tax receipts crashed due to the government-imposed lockdown. The city also overcharges residents for electricity and water, putting overpayments into operations, and that practice is being challenged in court. If the city loses ….
The memo outlines another complicating context. Last year the Legislature passed AB1486, which is a political attempt to supply “affordable housing.” Under that law, any property a city might sell must first be offered to developers of such housing.
Unaffordable housing is a direct result of the Legislature’s market manipulations, compounded by regulatory restrictions authorized by the Legislature. Housing won’t be plentiful, or affordable, until the politicians quit meddling in that market. Again, don’t hold your breath. Their simplistic, and damaging, response is to impose rent control.
Another law requires a city to post a for-sale to other agencies for 60 days before it can be put on the general market. Meaning, selling a property doesn’t necessarily add it to the tax rolls –small paydown on the pension debt.
So is selling off surplus property a good idea? Sure, that would cut down on costs and bring in some cash. But why would the Fox plaza and convention center be more “surplus” than, say, a few parking lots on the list that are shown as “no” for sale? And some residents feel a pride of ownership of some of the properties listed (especially those two) and are loath to see them sold.For Mayor Rusty Bailey, “It goes back to land, labor and capital.” Civic leaders must focus on “what are essential city services?” Look at the list using that measure and you, too, might think it’s wise to jettison some properties.
But there’s a long ways to go and the outcry over the Fox and convention center could scuttle the idea. Still, as Bailey says, “It’s an important conversation with the public and the council.”
The conversation would be more meaningful for Riverside taxpayers if the council they elected demonstrated anything approaching true leadership. Don’t hold your breath.
Reach Roger Ruvolo at rruvolo@att.net
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