In early 2009, I wrote a story about the City of Bell's plan to lease 15 acres it had recently purchased to Burlington Northern Santa Fe Railroad for use as a truck yard. An environmental organization had successfully sued to block the project because Bell did not complete an environmental review.
As you no doubt know, Bell has been in the news lately for gross levels of corruption at the elected and staff level. Now, the Los Angeles Times has revealed that Bell is unable to pay back a $35 million debt that was issued for the railroad truck yard project. Standard & Poor's has placed Bell on a credit watch list.
Back in 2007, the Bell Public Financing Authority – an alter ego of the city – issued $35 million in bonds for the ostensible purpose of purchasing 15 acres of former military property near the Long Beach Freeway and funding capital improvements related to the planned truck yard project. The city's stated plan was to pay off the bonds no later than November of this year by issuing new debt secured with monthly lease payments from Burlington Northern Santa Fe. However, the city never received any lease payments because the project died.
I based much of my 2009 story on public documents. No one from Bell – not the city manager, the city attorney or the mayor – would talk to me. The whole deal smelled bad, but I admit I did not recognize just how far out of control things were in Bell. The city had bought 15 acres of industrial land, worked out a lease option with the railroad and began clearing buildings from the site all without environmental review. The city had not claimed the project was exempt from the California Environmental Quality Act or adopted some perfunctory negative declaration. Rather, the city simply ignored CEQA altogether. It suggests that the city was not accustomed to playing by the rules. It also suggests that the city was not accustomed to having anyone look over its shoulder.
A 2008 Los Angeles Superior Court ruling for the environmental justice organization put an end to the railroad truck yard project. In the two years since, Bell's infamous $1.5 million-per-year city manager, Robert Rizzo, apparently did not find a different use for the property or figure out a way to pay back the $35 million debt.
I have to assume that the news from Bell will only get worse as investigators dig deeper into the city's finances and other deals that Rizzo put together.
– Paul Shigley