May 12, 2012

The History of Stockton: Chapter Nine

It never rains in California, but…

Wells Fargo is taking steps toward repossessing Stockton's new City Hall, an eight-story high rise at 400 E. Main Street. City government never moved into the ($40.7m) building, which it bought in 2007…

Fortunately, there are still some sources of revenue for the politicians in Foreclosureville, USA. The city takes in over $50,000 in processing and various other fees on each new home built, for example, and has been fining homeowners, "many of them underwater and unemployed", for "not painting their yellowing lawns green." And on the quality of life side of the equation, there's all that local stimulus-spending coming from the 94 retired city union employees who make pensions of over $100,000 a year, and the free healthcare for life after retirement for people who worked for the city for more than one month. Plus, you've got your Health and Safety Fair, with its Teddy Bear clinic and sensory maze, and a high-end downtown arena, and a half-million dollar Asparagus Festival, and…

You see, high-spending local officials in America's most miserable city aren't the bad guys, the real villains are the ones who loaned them the money:

City officials called Wells Fargo a vulture. "Having Wells Fargo file this claim on that building is just another stab in the heart of a city that is already down on the ground," Mayor Ann Johnston said. "They are kicking us again and again."

Just for the feeling it gives them, apparently:

"It's unfortunate that they felt they had to do this. I'm not sure what good they hope to get from that."
Posted by EBD at May 12, 2012 2:22 PM

Some people never learn, if you don't pay for it someone will come and take it away from you.

Posted by: a@c at May 12, 2012 2:50 PM

"It's unfortunate that they felt they had to do this. I'm not sure what good they hope to get from that."

Taking the heroin away from city council

Posted by: Revnant Dream at May 12, 2012 5:36 PM

I live in Stockton. When I moved here in 1953 it was a tough blue collar working class city but it had (and still has) a symphony that is in the black and plays a full concert program every year. And a small but world class museum of art, history and natural history. The schools were good and there were nice homes in good neighborhoods. In the late 50's the city outgrew the one high school and built three new ones. Then because housing patterns were segregated we had "Busing". In the 1970's the then City Council decided to make all the developers put "Low Income Housing" in every new development. Some of us tried to tell them this was not a good idea. Now there are vacant houses everywhere, The city is hiring bankruptcy specialists. You've read all about us in Forbes and the Times. We are so desperate for jobs that we have 6 (soon to be 7) state prisons here. The other cities and counties dump their garbage here, then they point their finger and make fun of our crime rate. The department of corrections dumps it's sex offenders here, classifies them as transient and tells us they don't know where they are. There are 150 halfway houses and coming soon a new prison hospital so convicted felons can get medical care unavailable to the law abiding citizens who used to work in all the factories here. At one time we were the second largest industrial city in the state. Global companies started here. Equipment built here is still earning money all over the world. I worked for 40 years in a company that would be 101 this year if it still existed. The state took away our raw material because of environmental concerns. I just saw a product the company I worked for made on television. Happens all the time. The city is on it's way to a new murder record this year. People get mugged in the best shopping center. And it all happened in 40 years. OK, Fed up, done here. Just one thing. Don't let it happen to you.

Posted by: f1guyus at May 12, 2012 7:12 PM

f1guyus ...

Sounds just like Winnipeg .... only with a bank willing to step in and do their job...........
And nobody cares enough to build prisons here....

But we do have a Museum of Human Rights !! .... well sort of..........and we MIGHT be building a water slide park on the taxpayer dime .... maybe.

But we have a NHL hockey team! At least we had one until the playoffs started ... and they`ll be back next season ... at least in body.

But we do have one heck of a murder rate!

Posted by: OMMAG at May 12, 2012 7:26 PM

30years ago Winnipeg looked like it had seen better days. The look of socialism is very similar to the look of poverty.

Posted by: Scar at May 12, 2012 8:57 PM

Good news everyone ! ....... and then things get weird .

Posted by: Bill D. Cat at May 12, 2012 9:02 PM

Thanks for stopping by, f1guyus, and for providing some valuable first-hand context about what went wrong.

I've heard (read) other similarly positive descriptions of (old) Stockton. A cautionary tale, to be sure.

Keep us posted.

Posted by: EBD at May 12, 2012 10:15 PM

I live in St. Louis. Sounds like what we've fone through with our idiot City Fathers.

Posted by: Jeffersonian at May 12, 2012 10:39 PM

Just don't expect the rest of the country to pick up the tab. The rest of the States need to to take steps to prevent the Federal Government from deciding to bail out California and its cities.

Posted by: Texan at May 12, 2012 11:28 PM

"In the 1970's the then City Council decided to make all the developers put "Low Income Housing" in every new development. Some of us tried to tell them this was not a good idea."

I hear ya. In Nanaimo they're going to build another 'wet house' - taxpayer provided homes for the 'hard to house'. Residents have no restrictions regarding what they do within their four walls. Drugs and alcohol are permitted, because hey, you and I can drink or do drugs in our homes, so why should they be treated differently?

Other than the fact that we are responsible for our own mortgages, nothing I guess.

The wet house is within two blocks of a high school and three blocks of an elementary school. Oh, and it's immediately adjacent to a three story complex for seniors.

The social theory is that the 'hard to house' should be distributed throughout the city, with the established neighbours setting a fine example for the residents to emulate. Kind of like Jack and Olivia in their earlier days, I guess.

The city fathers in their wisdom, have tried to sell it as a benefit. A similar wet house on the city's south side has lowered incidences of B&E's, car thefts, assaults and drug offences. What they avoid discussing is that those anti-social behaviors aren't a part of the north end to begin with. Addicts aren't likely to hitch-hike or take public transit all the way downtown, or so the theory goes. And surely no dealers are going to go where their old and valued customers now happen to be.

What makes a bad situation better on the south end can only make a good situation in the north even better!

Social engineering. At it's logical best.

Posted by: No Guff at May 13, 2012 3:33 AM

I'm not sure what good they hope to get from that.

Uh, the money that they loaned you?

I have taught financial mathematics. One of the things that I do is explain that a lease is really debt, and that the characteristic of a lease that makes that clear is that people will come and repossess the property if you don't make the payments.

Posted by: Iowa Jim at May 13, 2012 7:59 AM

Please don't blame the current Stockton City Council for Stockton's problems. They took 40 years to create. And whatever is happening here is a preview of what's coming for all the cities in California that depended on manufacturing and agriculture for their livelihood.

Posted by: f1guyus at May 13, 2012 9:17 AM

Stockton: population 391,707

"Crime has skyrocketed, with an all-time high of 58 murders last year, landing Stockton on the FBI's top-ten list of most dangerous cities in the country."

The racial makeup of Stockton was 108,044 (37.0%) White, 35,548 (12.2%) African American, 3,086 (1.1%) Native American, 62,716 (21.5%) Asian, 1,822 (0.6%) Pacific Islander, 60,332 (20.7%) from other races, and 20,159 (6.9%) from two or more races. Hispanic or Latino of any race were 117,590 persons (40.3%).

Posted by: Knight 99 at May 13, 2012 11:53 AM

F1guyus, I understand that the current City Council is not entirely responsible for Stockton's problems, including the fact that it's close to being bankrupt, but by the same token the mayor shouldn't blame Wells Fargo for requiring that the money they loaned to the city to be repaid. "Banker" may be a pejorative in the current climate - hence the councillor's "vulture" characterization - but many of the people who keep their money in Wells Fargo (and other banks) aren't wealthy by any stretch, and have an interest in the company remaining viable, which includes the practice of ensuring that people who borrow money repay that money.

BTW - and this may or may not be relevant - the Obama DOJ is considering seeking damages and penalties against Wells Fargo for not providing enough loans to minorities.

Posted by: EBD at May 13, 2012 1:10 PM

Hello No Guff- was off the Internet, gardening this weekend. Interesting about the "wet house" proposed for Nanaimo and placing it in middle-class neighbourhoods. This is NOT going to work out well.
City of Toronto did that with the neighbourhood which I lived in - Fairmont Park after house expropriations were started in the late 1970's in order to build the Scarborough Freeway. It was voted out when David Crombie was elected mayor. What to do with the approx. 12 houses expropriated - why let's put low income families in so that they will see how middle class people live and so will learn to improve their lives in the process. All the neighbourhood ended up with were "families" in which the males (not husbands) were drug dealers and the females (not wives) but both mother/daughters were crack whores. None of the middle class families would let their children play with the low-income families because of the lifestyle and swearing which the low income children used. The rent charged on the houses was $ 395/month which might have been market value in the late 70's, but did not even pay the monthly property taxes. We all hoped that a bomb would drop on the houses. BTW, the lawns were never mowed, the walks were never shovelled, and always lots of garbage blowing around - just great for property values.

Posted by: |Big Momma at May 13, 2012 2:09 PM

If you're watching in complete awe and disbelief as the various government bodies and officers in California continue to attempt to find more tax revenue while making no effort to slow the growth of spending - as they continue to act as if they simply cannot see where they are, and where they're going to end up - consider that this very well could be a workable, rational strategy for California's future.

The rest of the country has been saying, over and over, for about ten years, that Californians should feel free to drive their own state into the ground and beyond, but they should not expect to ever see a federal bailout of their insurmountable debt.

Face it: at some point, when California suddenly has NO money to pay police and fire and pensions and employee pay and . . . whatever . . . and it begins the inevitable descent into warlord-controlled chaos, all of the current group of politicians and about 50.% of the voters are surely going to insist that California is Too Big To Fail, and we'll see a bailout bill passed almost before the first headline ever gets written about it.

But, this won't happen if the state appears to be making progress in fixing itself. There will be a bailout only if the state continues to self-destruct.

So you'll not be seeing any fixes designed by or voted on by or implemented from within California
by any California government workers.

No, they only hit the bailout jackpot if they continue the death spiral.

And, watch. They will continue that deathj spiral. And then we'll bail them out.

Posted by: bobby b at May 13, 2012 2:19 PM

Don't get the idea that I agree with or support the city in this deal. It's the second time in a month that Well Fargo management has met it's responsibilities. Last time it was one of the downtown parking garages that they repoed. And the same crybabies that are crying about their "City Hall" cried about that. My guess is anyone who uses that building or seeks to renew operating permits for the garages is going to have some "Problems". The public sector in Stockton delights in putting up roadblocks. The business permits manager told a friend of mine who expressed surprise at the fees he'd have to pay for a modest business "You don't understand, we have to charge those fees because so many businesses have left." I think the school district has a class in being pigheaded. And officious.

Posted by: f1guyus at May 14, 2012 2:10 PM

"We have to charge those fees because so many businesses have left…"

That seems to be the M.O. of cash-strapped failing governments everywhere: when revenue goes down as a result of them making private-sector business (i.e. job) creation increasingly onerous through excessive regulations, taxes, red tape, and "fees", they try to generate more revenue by increasing these constraints on the private sector.

Mayor Ann Johnston thinks that she can mandate economic success through regulations: Listen to her argue -- as mayor of a devastated city bordering on bankruptcy, no less -- for the financial benefit to the local "we" and "us" in keeping public sector wages high:

"We pay prevailing wages, we sometimes get criticized for doing that by folks who think they can save money, but the reality is that we believe in prevailing wages, we believe that it's important…..we want, you know, the professionalism that comes with paying a decent wage, we want to put the money back into our city, into our community, and we want to raise the level of economic benefit to our citizens…"

She thinks she can generate private-sector profits (i.e. create a taxable private sector cash cow) by making her economically-illiterate feelings an official local-governmental policy.

A female political commentator (I forget who it was) once said that women shouldn't be allowed to vote because they know how to spend money, but they don't know how to make money. She was joking, of course, but Ann Johnston proves that there's more than a kernel of truth in that.

"When you make the case (to private business) we're keeping our money in town, when you make the case that we're reinvesting in our city, and this is how we do business, and "no, you don't get an exemption on this", they come along because they want the work….they take their pencils and they start, you know, figuring out how they can do it…and they come through for us. So, you know, the business community has come around, we don't get arguments about it, our city staff is very good…"

Well, yeah, the city staff is doing just fine.

Posted by: EBD at May 14, 2012 4:50 PM