Either the LA Times Business Section got it wrong last Sunday (http://articles.latimes.com/2010/apr/24/business/la-fi-himi-worthington-20100424), or I have to figure out how to gross $600 million and still get a government loan.
That's what the article said about Cal Worthington who in 2002 grossed $600 million from his car dealerships. The article also stated that he is doing so well that he is looking to buy another dealership yet he is asking the City of Long Beach to come up with $600,000 in federal funds to keep him here.
I've posted the "analysis" that was just done (ink really isn't even dry) to bolster why the City Council should rush to get the money to Mr. Worthington.
Let's analyze what's going on:
- City management gets a frantic call from the grandson of Cal Worthington that Ford Motor Co (who received a giant federal credit extension) has made a lucrative offer to pack up and relocate Cal Worthington to Orange County. I get calls telling me the City needs to do this or we will lose Worthington to the Ford deal.
- City management is asked by Worthington to come up with a financial package that will compete with Ford or else Worthington will take the Ford offer. (When it was first explained to me the offer was $2 million. I have yet to see anything in writing from Ford about any type of offer. Oh, yeah. And why would Worthington take $600,000 instead of $2 million?)
- City staff puts a loan of $250,000 on the council agenda and then pulls the item.
- City staff puts a loan of $600,000 on the council agenda.
- The funds are federal CDBG funds that normally can only be used in a blighted area -- the 5th is not blighted so while I cannot get funds to fix streets or medians with these funds, they can be used to "retain jobs."
- So I ask, how many people does Cal employ? Answer: 116 -- but only 18% of these jobs (or 20) are actually Long Beach residents.
- Why does he need the money? Doesn't really need it, but he'd like to expand onto the old Chevy dealership property.
- Will he have to pay the $600,000 back --seeing how the City just gave him $200,000 in 2008 ? I can't seem to get a final answer on that one.
- What are we getting as collateral for this loan? The City of Bellflower took an interest in the Don Ellis Ford dealership when it gave Ellis a $600,000 loan --and it required an outside audit of the Ellis financial accounts to see why he needed the money. Why aren't we requiring an audit?
- So why can't we tie this loan to performance? For every Long Beach resident Worthington employs, he gets to keep a portion of the loan?