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Sat Apr 7, 2012, 09:53 AM

Dodgers deal exposes Prop. 13 loophole

4-2-12 / Thomas D. Elias

Amid the euphoria that erupted in much of California when a group led by former basketball great Earvin "Magic" Johnson and financier Mark Walter spent more than $2 billion to buy the Los Angeles Dodgers baseball team and its stadium last month, one question led to some consternation.

Why should Frank McCourt, the notoriously wasteful outgoing owner, remain associated with the team, holding a 50 percent interest in the 200-plus acres of asphalt parking around Dodger Stadium?

SNIP

The answer may have a lot to do with a loophole in Proposition 13, the landmark property tax limitation law passed as a 1978 initiative. That law sets the tax on any property, commercial or residential, at 1 percent of the latest sales price and allows for tax increases of no more than 2 percent per year.

SNIP

All through the negotiation, McCourt kept insisting he would keep control of (the parking lots) even while selling the team and ballpark. But the deal as publicly reported saw the Johnson/Walter team pay McCourt $150 million for half-ownership of the striped pavement. The new owners will control parking prices and policy and pocket all the proceeds. That essentially means the new people will be the actual owners. And yet, McCourt remains a de jure half-owner.

Read more: http://www.appeal-democrat.com/articles/percent-115068-mccourt-tax.html

Bottom line: By retaining McCourt as "half-owner" of the parking lots, Magic Johnson and Company will be saving about $2 million a year in property taxes. As the author points out, that's money that could be going to schools, senior centers, parks, etc.

Mystery solved.


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Arrow 8 replies Author Time Post
Reply Dodgers deal exposes Prop. 13 loophole (Original post)
Auggie Apr 2012 OP
ArcticFox Apr 2012 #1
bemildred Apr 2012 #2
DBoon Apr 2012 #3
bemildred Apr 2012 #4
xxqqqzme Apr 2012 #8
David__77 Apr 2012 #5
KamaAina Apr 2012 #6
KamaAina Apr 2012 #7

Response to Auggie (Original post)

Sat Apr 7, 2012, 10:20 AM

1. I hate rich people who rip off the rest of us

What's two million a year when you own the Dodgers, anyway?

That's like me paying $10 a year.

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Response to Auggie (Original post)

Sat Apr 7, 2012, 10:38 AM

2. Hey , they have to "maximize value" for the "shareholders".

That is: themselves. It is their moral duty to be selfish and greedy, see?

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Response to Auggie (Original post)

Sat Apr 7, 2012, 10:59 AM

3. Prop 13 is a right wing trojan horse

people thought they were voting to allow poor senior citizens to keep their homes.

What they got was crumbling infrastructure and billionaires with $2 million taxes savings.

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Response to DBoon (Reply #3)

Sat Apr 7, 2012, 11:38 AM

4. Correct. And lots of debt. nt

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Response to DBoon (Reply #3)

Mon Apr 9, 2012, 01:23 PM

8. Which

opponents warned would happen if prop 13 was passed. The warnings of failing education and infrastructure were there but ignored!

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Response to Auggie (Original post)

Sat Apr 7, 2012, 01:56 PM

5. It's not an unintended "loophole," it was designed that way on purpose.

And Californians voted for it, so they will have to vote against it to change it, if they so want.

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Response to Auggie (Original post)

Sun Apr 8, 2012, 07:35 PM

6. Stop this now

and put an end to our long statewide budget nightmare!

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Response to Auggie (Original post)

Sun Apr 8, 2012, 07:39 PM

7. This is just the tip of the iceberg

When former state Sen. Martha Escutia, an East Los Angeles Democrat, first proposed closing the post-Proposition 13 loophole, the state's nonpartisan legislative analyst estimated the change could produce between $3 billion and $8 billion in new revenues. That's about as much as the projected take from the tax increase initiative now being pushed by Gov. Jerry Brown.

The writer from the right-wing paper up in the Sacramento Valley goes on to blame Dems for not doing this. So why don't they do it?

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