Did you wonder why Frank McCourt was given half ownership of the Dodgers' parking lot?
I did. See below (also posted in U.S. Places, California)
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 because McCourt owns enough that it's not considered transferred property. As the author points out, that's money that could be going to California schools, senior centers, parks, etc.
Mystery solved. If you're happy Magic Johnson and company bought the team, think again.
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