How has the stimulus program of President Obama affected California? Have things gotten better?
We can see the answer for the whole state by looking in detail at how stimulus money was spent in Pasadena. City Finance DirectorVic Erganian said the city borrowed money at lower than normal interest rates and the funds opened the door for projects and jobs the city otherwise could not support.
Now winding down, the federal stimulus program pumped $133 million into Pasadena in 10 separate bond issues under the American Recovery and Reinvestment Act.
The renovation of the 89-year old Rose Bowl consumed $114 million of the funding by Build America Bonds at a blended interest rate of 4.8 percent. But the price tag for renovation has now run up to $162 million, leaving the city with a $39 million financing gap. The Rose Bowl is a revenue generator for the local Old Town restaurant district in Pasadena, as well as for tourism and hotels.
The National Football League may consider “temporarily” locating a team in the Rose Bowl until a new stadium can be built elsewhere. Speculation is that the Rose Bowl may well become the permanent stadium for whatever NFL team finds a home in the Los Angeles area.
And $7.4 million of stimulus money went to subsidize a 43-unit low-income senior housing project with a total cost of $17 million. That reflects a whopping cost of $395,000 for each one-bedroom unit, or $296 per square foot of building area. The units now rent at $416 per unit per month. Market rates would be at least $1,200 a month, probably higher.
Other projects funded with stimulus funds include $4.3 million on roads; $2.8 million on employment and training programs; $2.25 million on energy efficient upgrades; $1 million on water and power infrastructure; and $908,000 to homeless housing programs.
Arguably, what the stimulus funded in Pasadena was just more luxury improvements to the Rose Bowl than could have been conventionally financed anyway, a windfall to a low-income housing developer for a financially dubious project, and a smattering of other projects that didn’t do much to generate the local economy on a permanent basis.
