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Government and People
October 1, 1997
DC Council to hold unpublicized hearing this morning 10 am
A risky financing plan including the use of "interest rate swaps" or derivatives -- the high-risk investments that bankrupted Orange County, CA -- is being proposed to bailout the troubled financing plan for the proposed new convention center. Without any apparent public notice or voluntary publicity, the D.C. council is to hear testimony on the "Washington Convention Center Financing Amendment Act of 1997, Bill 12-379" today at 10 am at the council's chambers at 441 4th St. NW, lst floor.
The financing scheme also includes an unusual contracting deal between the Washington Convention Center Authority, the Washington Convention Visitors Association and the D.C. Committee to Promote Washington -- as well as a measure to extend debt service on the project from 30 to 40 years. Extending the debt service by 10 years would raise the overall cost of the project by tens of millions of dollars.
"California bailed out Orange County when they got burned by derivatives, so who is going bail out D.C.?" said Advisory Neighborhood Commissioner Leroy Thorpe. "Financial authorities need to wake up and stop this attempt to take advantage of us."
The bill was introduced by Councilmember Charlene Drew Jarvis; it is cosponsored by Councilmembers Thomas, Evans, Allen, Mason and Chairman Cropp.
A new report by the Government Accounting Office released Thursday says the Washington Convention Center Authority does not have the money to build the proposed $650 million convention center. Recent reports indicate that construction costs for the project may be $100 million higher than expected -- over and above the $650 million budget.
For more information, contact: Beth Solomon, Shaw Coalition (202) 789-7864.
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