Tuesday, May 25, 2010
Politics Wamp Hits Haslam as Unethical for Movie Theater Investment
Posted by Jeff Woods on Tue, May 25, 2010 at 1:40 PM
- It's opening night at the Regal Riviera!
A little Googling reveals that, indeed, Haslam, his daddy Jim and his brother Jimmy all tossed cash into the redevelopment project—specifically, they invested in Knoxville’s fancy new $15 million downtown Regal Riviera movie theater. But there were few ethical worries raised at the time. In fact, the city’s law director signed off on the deal, and the Haslams were hailed as “angel investors.” Apparently, no one else would risk their money, so the Haslams wrote checks to jump-start the deal for the good of Knoxville. Thanks to their generosity, there’s now a place where the downtrodden citizens of their little scruffy Smoky Mountain town can sit back, munch popcorn and imagine they are vacationing in the South of France.
On their roughly $4 million investment, the private investors stand to make a 5 percent, tax-free annual return on 40-year notes, should the downtown project succeed, according to the Knoxville News Sentinel. The Wamp campaign says the deal included $4 million in taxpayer funds from the city of Knoxville and another $3 million in government grants and tax credits to underwrite the development.
“If there were a bunch of people out there clamoring to buy the bonds and the mayor took them, that would be another deal,” said Culver Schmid of the city’s Industrial Development Board. But “the folks who bought these bonds really performed a public service.”“It’s a hugely high-risk deal and these were the only people willing to do it,” Schmid said. “They’re kind of angel investors. If it’s truly a conflict (for the mayor), who’s being hurt here?”
Haslam is quoted as saying the city would never subsidize the theater’s operations, should business fall off.
“My thought process was, is there ever going to be a situation where I have to make a decision (as mayor), from which I could personally benefit. The last thing I want to do is create a sticky situation for myself.”
In a big surprise, the Wamp campaign isn’t as unquestioning about this deal as the Knoxville media. Wamp campaign flack Sam Edelen:
“The mixing of personal investment funds with the taxpayer money you oversee for your own gain or profit represents a serious breach of ethics. Yet that’s exactly what Mayor Haslam did when he co-mingled his own personal money, as well as investments from family members, with funding from the City of Knoxville on a private real estate development he now owns.”“That’s an insider deal few people get, and it raises questions about how Mayor Haslam would attempt to manipulate state government to benefit himself and his company, Pilot Oil, were he to be elected governor. It’s another reason why Haslam should agree to the Tennessee Newspaper Network’s request for full transparency and release his income taxes with support schedules and a detailed financial statement so the public’s fully aware of his business dealings.”
Update: Haslam campaign flack David Smith responds.
"The Knoxville Industrial Development Board owns the cinema, and Mayor Haslam's involvement in the funding of the project was as a buyer of last resort. The bonds were publicly bid, no one else would purchase them, and Mayor Haslam helped save a project that was important to the community. This is a family that has given very generously to the community, and this is another example. The Congressman is either intentionally trying to mislead voters or hasn't done his homework - neither are good characteristics for a governor."
Comments (2)
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You want to see unethical? How about rigging the number of signatures required for ballot referendum so that 2.3 times the number of people who voted have to sign petitions? Ever see that? Haslam did just that last week.
Haslam is Boss Hog in a better suit. The law means nothing to him.
http://www.knoxnews.com/news/2010/may/22/p…
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I just read that entire article and the comments several times. Please do tell where in the article it says that Haslam changed anything to do with the number of signatures required to get any referendum on the ballot? If what you say is true everyone should be aware of it but without real hard proof it will just be written off as more political mud slinging by supporters of a campaign that has nothing positive to run it's platform on.
