Feels like home
I see that Don "the Don" Mazziotti, the Goldschmidt protege who ruled the Portland Development Commission through the Vera Katz years, is really ramping his local maneuverings back up. His reappearance comes several years after his unceremonious departure from his PDC gig when the agency went under new management at the hands of Grampy Potter. For a while there, the Don was working for the Harold Schnitzer real estate firm, but that must be over, because now he is sowing his oats in the public sector again. Big time.
Not only is the Don the lead huckster for the Merritt Paulson $85 million* stadium-parking lot scam, but he's also just been named to the board of the Portland Family of Funds (PFF). That's the shadowy private company that was "spun off" from the PDC with public money during the Don's PDC tenure, with ambitions to become a billion-dollar "community investment bank." Lately, it siphons off tax credits for projects like the toney Gerding theater in the Pearl District -- millions of dollars in federal "new markets" tax credits that were meant to rebuild low-income areas of town.
The PFF has always had a funny odor about it. Its first CEO was a guy named Norris Lozano, who, like the Don, was not a well-liked fellow. Lozano had a checkered past when it came to finances, and at one point the state taxing authorities were after him for some serious back taxes. He parted company with the PFF about a year ago, and was last reported running a real estate financing outfit in Santa Monica.
Lozano's replacement as the PFF CEO is Carl Talton, who also happens to be a founder and the current board chairman of the PFF. Talton worked for Portland utility companies for three decades and served as chair of the PDC from 1995 to 1998. He retired from the PDC board, and Katz replaced him with Matt Hennessee, who was chair when the Don was the CEO at PDC. Since then, Talton has been a regular appointee to various state boards; Governor Ted must love him (or fear him, or at least need him).
Joining Talton and the Don on the PFF board are none other than Hank "Convention Center Hotel" Ashforth; Marty Brantley, the Channel 12 exec who among many other board appointments sat on the PDC board with Talton; and Les Fahey, a former CPA and current business consultant.
That's it -- just those five guys, according to the PFF website. Controlling tens of millions in tax dollars, in a private company. And the CEO answering to a board of which he is also the chair. Wow.
Any time I prowl around the internet looking for the lowdown on the PFF, I find something interesting. The latest thing I've noticed is that it's a "mutual benefit corporation," which as I understand it is sort of like a business league. It's a nonprofit organization, in that it doesn't have shareholders, but unlike a public benefit corporation, it does have "members." I wonder who those members are.
The other thing that you never hear discussed is that a lot of the tax credits that the PFF throws around get spent in New York. It crows about its latest allocation of tax credits -- $65 million, awarded last year -- but according to this press release on a deal it closed this past summer, half of the tax credits "are reserved for projects in New York."
The last couple of years of the Don's tenure at the PDC were a laugh riot. That agency single-handedly kept the local blogosphere buzzing for months on end. Expense account abuses, executive coaching excesses, rigged public processes, scathing criticism from the City Club, sex scandals -- it was quite a scene. And the fun appears to be on the verge of resuming. With the Don now on board at the PFF, and Sam the Tram about to take over Vera's old desk and pump the PDC full of his and her real estate buds, it's going to be quite a wild ride.
* Preliminary liars' budget figure.
| Posted at 4:58 AM | Permalink |
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Comments (16)
The "Family" in PFF is used in the Mario Puzo sense.
At a public meeting, I once asked a muckety muck at PFF who the owners were. I asked, "If the company earns a profits, who gets the money?"
The answer: "We all do."
[Thought bubble: Thanks, smart ass.]
Posted by Garage Wine | November 18, 2008 6:37 AM
I guess change in govt only works for Sen Obama. Same re-treads, same self-interest, more streetcars, more potholes, lousier schools, higher water bills and Sellwood bridge is falling down.
The voting population in this town are making G. Bush look like a genius.
Posted by Steve | November 18, 2008 7:32 AM
Total Gangster.
Posted by realdoN | November 18, 2008 8:02 AM
PDC has a tradition of dressing up on Halloween. Each department has a theme and I think there's a competition. I remember a picture of Bruce Warner as the Monopoly banker floating around a couple years back.
During Don's tenure, the executive department decided to go with a Mafia Gangster type theme, with Mazziotti as the "Don".
I don't think that Mr. Lozano nor Mr. Mazziotti ever pretended to be people other than who they are. The powers that be were fine with that and the trains didn't even have to run on-time. Similarly, the internal corrruption at PDC wasn't an issue for the folks that had a piece of the action. It only got sticky when someone's personal trough was taken away. Then there'd be a bunch of public squawking about how "awful" the PDC was.
Good times.
Posted by same you-know-what different day | November 18, 2008 9:28 AM
Goldschmidt cronnies are everywhere.
Governor Kulongoski
Tom Imeson, Public Affairs Port of Portland
John D. Carter Schnitzer CEO and President
Mike Thorne, Chair of the Big Look task force
etc.
Goldschmidt’s Web of Power
http://wweek.com/photos/3118/goldschmidt.pdf
Posted by Ben | November 18, 2008 9:30 AM
I will go out on a limb and defend Don. Developing a city is never pretty, because things don't get built unless someone gets paid. At the end of the day, it is better to evaluate results, not process.
When Don was at PDC, at least he got things built without massive budget shortfalls. He's a developer, unlike the current crowd who think it's fine to spend half of project budgets on soft costs.
Ten years ago, we were all upset about the Pearl, the abatements, the subsidies to WD, etc., but the Pearl turned out to be a good urban renewal investment, years ahead of schedule, even if its creation was smelly. The current load of urban renewal projects are money pits that may never yield a benefit. Compare the Pearl to what urban renewal is now and Don doesn't seem so bad.
Posted by James | November 18, 2008 9:32 AM
but the Pearl turned out to be a good urban renewal investment
No. We would have had the Pearl without a dollar of urban renewal. The first successful projects were in-place well before the URA was formed. And nothing feeds success like success.
Urban renewal: It "works" where it isn't needed, and doesn't work where it is needed.
Posted by Garage Wine | November 18, 2008 10:03 AM
"When Don was at PDC, at least he got things built without massive budget shortfalls"
Hmm?
But what about the massive debt he stacked up to so so?
All of which creates masssive budget shortfalls by diverting basic service revenue from every jurisdiction.
For decades with millions more in interest also being paid with property taxes.
Now I know PDC defenders like to pretend those property tax dollars would not have been available without the "investments", but that is false as 1000s of acres of property unrelated to any of the projects have their property taxes diverted to pay for them.
There is also never any performance audit to determine if the public investment was prudent.
And certainly zero recognition of the tremendous failures the PDC has directed.
Instead they are covered up with public relations campaigns while the next boondoggle is advanced.
Posted by Ben | November 18, 2008 10:29 AM
Garage Wine for the win!
Posted by Arbitrash | November 18, 2008 10:57 AM
"the Don" is back in town...again. Not good!
We should all be very afraid on many levels. The guy is dangerous and revengeful too, I think. If you have crossed him in the past watch your back!
PFF is nothing but a crooked front and we the taxpayers foot the bill.
Posted by portland native | November 18, 2008 11:17 AM
I took a course at PSU where the mucky mucks from the PFF came in and tried for a whole class period to explain how it works. I never did understand it. It's a very shady arrangement to have public funds be involved.
I used to support Urban Renewal in theory. I think in this city it's a giant hustle that keeps tax revenues away from schools and county services. It's just a way for the city to expropriate all of the tax revenue for itself.
I would probably still support it if Urban Renewal areas were restricted to 15 years duration, with absolutely no possibility of extending their life.
I think that the whole Urban Renewal issue is going to come to a head in Portland. You have the huge amounts of money involved, combined with the council seizing more direct control of the PDC, combined with a new spendthrift mayor, combined with the likelihood of rookie mistakes by this new council.
I think it all adds up to some serious over-reach on a big expensive project, and everyone re-evaluating what the PDC is really up to.
And you can't string along the school district, county and other other taxing jurisdictions forever. When the schools start yelping, voters will listen.
Posted by Deeds | November 18, 2008 11:30 AM
"but the Pearl turned out to be a good urban renewal investment, years ahead of schedule, even if its creation was smelly"
BS! The largest credit bubble in industry created the pearl. And we will be paying for those mal-investments for decades. IMO, anyone who tries to give credit to the PDC is either a shill or clueless. Morever, the PDC's TIC model is based on the debt-fueled ponzi scheme that masqueraded as an economy in PDX.
The PDC and the neo-liberal city government make me want to retch.
Posted by squeezed | November 18, 2008 12:02 PM
Compare the Pearl to what urban renewal is now.
The So What fiasco was all Mazziotti and Hennessee's doing. With their puppet strings being pulled by Goldschmidt himself.
Posted by Jack Bog | November 18, 2008 12:32 PM
And you can't string along the school district, county and other other taxing jurisdictions forever. When the schools start yelping, voters will listen.
Not likely. The voters put these jokers in office. And if the voters call them on their crap, the Goldschmidt puppets will bat their eyelashes and make some empty promises, and get re-elected. Again. And again.
"Hope and Change" helped get Obama elected. Maybe someday it will work here. But dont hold your breath.
Unfortunately the local Democratic elite know they can get away with anything because they know the voters will not put anyone else in office.
Posted by Jon | November 18, 2008 12:49 PM
Anyone know where Neil is these days?
Posted by Sam Donley | November 18, 2008 6:59 PM
saw Neil at the Elephant deli. He looked like a Burnside street bum....fat...dirty....beard.. Loser.
Posted by realdoN | November 18, 2008 8:01 PM