On the menu: cash flow

The new Ritz-Carlton Tower in downtown Portland is symbolic of many things, but good sense is not one of them. I will say this for it, though: It's a monument to milking the taxpayers. It was financed with a generous helping of federal income tax giveaways under the Trump tax law of 2017 – it's in an "opportunity zone," you see, and subsidizing it with obscene tax breaks helps lift the downtrodden out of poverty. Okay, sure.

Now it seems that the food court in the place can't be built without a loan from the city. And so The Agency Formerly Known As The Portland Development Commission is about to cut checks for about $3 million to enable some young guys you never heard of to build the court and try to make a go of it. A 10-year loan at 6.5 percent, with interest only for the first year and a fat balloon payment at the end. The term sheet is here. The kids say they have the tenants all lined up, and it's going to be a big hit, if they can only get it constructed.

I dunno. The whole Ritz project seems like a shaky proposition, even with all the tax goodies. I wouldn't be surprised if somebody lending money into that pit gets shorted in the end. Let's hope it's not the city. The commissioners' report on the loan deal says:

While there is a risk that the Borrower will be unable to repay the loan, staff have reviewed personal financial statements and consumer credit reports and will require a trust deed from several properties sufficient to collateralize the loan.

Famous last words? We shall see. 

One of the reassurances being given for the deal is that the food court operator is supposed to get payments from the landlord as the foodies finish construction and go into operation. But then again, another of the terms is:

Borrower to obtain subordination non disturbance agreement from landlord’s lender to ensure tenant’s lease continues in case of foreclosure.

If the landlord isn't paying its bank, you wonder how it's going to pay the food court guys so that they can pay back the city. No sense worrying about that now, though; the loan's a done deal. Think about the sushi. It's coming, any day now.