Expert Told Grand Jury That City’s Method of Calculating Repayment Utterly Unheard Of The Alameda County Civil Grand Jury investigating Emeryville’s attempt to discount a loan given to the developer of the Bay Street Mall said the city “did not perform adequate due diligence, did not retain experts … and lacked the expertise” to approve such a deal. The deal, originally proposed by developer Madison Marquette and based on prepayment of the loan in full, would have let the developer repay only $12 million of an $18 million loan. “It is troubling to the Grand Jury that the city would commit to such a significant financial decision based upon insufficient research into best practices and accepted industry standards. In determining their options, decision-makers were seemingly blinded by the opportunity to generate immediate cash,” the Grand Jury said in its final report, released today. The Jury heard testimony from an expert on valuing such transactions. When asked if he had ever seen a loan prepayment calculated in such a way, “the expert responded emphatically, ‘Never,’” the Jury report said. Luckily, according to the Grand Jury, Emeryville’s Oversight Board refused to approve the loan. The county-level Board is charged with monitoring the city’s transition
