Poseidon’s Latest Corporate Welfare Demand


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From our friends at R4RD (“Residents For Responsible Desalination” which further translates, “Desalination Maybe Someday if Necessary But Responsibly and Never With Poseidon”)

Folks:

Probably one of Poseidon’s bigger lies was that its HB project would have “100% private financing.” Instead Poseidon has been pursuing a 100% PUBLIC financing strategy all along. Please read the attached coalition letter co-signed by R4RD in opposition of CDLAC bond subsidies for the project. It’s a quick read.

Stay safe, you all.
-Dave Hamilton, R4RD

Fiona Ma, California State Treasurer,
Chair State Treasurer’s Office 915 Capitol Mall, Suite 110
Sacramento, CA 95814

Governor Gavin Newsom
California Governor’s Office
1303 10th Street, Suite 1173
Sacramento, CA 95814

Betty Yee, State Controller
State Controller’s Office
300 Capitol Mall, Suite 1850
Sacramento, California 95814

January 8, 2020

Dear Chair Ma and Members of the California Debt Limit Allocation Committee;

On behalf of the undersigned organizations and individuals, we write to express our strong objection to the requested allocation by Poseidon Water of $1.1 billion in California Debt Limit Allocation Committee (CDLAC) Private Activity Bonds (PABs).

Poseidon Water is a subsidiary of Brookfield Asset Management, a Canadian corporation with in excess of $335 billion in global assets under its control. This $1.1 billion request was approved in an initial resolution in December 2019 by the California Pollution Control Financing Authority staff (CPCFA) who stated that a final vote from the CPCFA Board on the allocation recommendation for Poseidon could occur in December 2020.

The anticipated pool of CDLAC Private Activity Bonds for 2021 is believed to be somewhere in the range of $4 billion and Poseidon’s request would reduce the total pool available for affordable housing projects across multiple categories by roughly 28%.

CDLAC tax-exempt debt is supposed to be used primarily to finance affordable housing developments for low-income Californians, build solid waste disposal and waste recycling facilities, and finance direct loans used by in-need college students and their parents. Given that CA is facing an affordable housing crisis where available funds to build projects to meet the needs of California’s lower-income working families and the unhoused are increasingly difficult to obtain, the diversion of these funds is in direct conflict with CDLAC’s legislative priorities to:

  • Promote housing for lower income families and individuals;
  • Preserve and rehabilitate existing governmental assisted housing for lower income families and individuals; and
  • Provide mortgage tax credits or reduced interest rate mortgages to assist teachers, principals, vice principals, assistant principals, and classified employees who are willing to serve in high priority schools to purchase a home.

This is not the first time Poseidon has applied for a significant CDLAC allocation. In 2012, on the heels of the economic downturn, Poseidon’s Carlsbad Desalination Project received an allocation for $733 million in private activity bonds that it used to finance the bulk of the construction of the Poseidon Carlsbad Seawater Desalination Plant now owned by a British-based private equity firm, Aberdeen Standard. The structure and intent of the Carlsbad financing deal was the subject of a detailed case study published in the academic journal Urban Studies in 2019. The authors’ over-arching conclusion was that the deal was designed to extract a local infrastructure project’s value to be guaranteed by local California ratepayers and then exported globally to Poseidon’s investors and financiers.

Poseidon is relying on other public and rate-payer subsidized dollars as well to build this plant including a Trump administration approved $585 million low interest WIFIA loan, while it also seeks a $400 million subsidy from the Metropolitan Water District that would reduce the pool of dollars available for more environmentally sound and cost effective water supply alternatives.

We urge you to deny $1.1 billion allocation requested by Poseidon Water and put hard-working Californians first. The pandemic has increased the already onerous burdens faced by vulnerable environmental justice communities who struggle every day to make ends meet. This project would not only increase water rates and rents but deplete much needed funds to build affordable housing.

Sincerely,

Susan Jordan, Executive Director, California Coastal Protection Network
Sean Bothwell, Executive Director, California Coastkeeper Alliance
Melissa Romero, Legislative Affairs Manager, California League of Conservation Voters
Andria Ventura, Legislative and Policy Director, Clean Water Action
Anna Cummins, Executive Director, 5 Gyres
Annelisa Moe, Water Quality Scientist, Heal the Bay
Elizabeth Lambe, Executive Director, Los Cerritos Wetlands Land Trust
Neal Desai, Senior Program Director, Pacific Region National Parks Conservation Association
Garry Brown, Founding Director, Orange County Coastkeeper
Jonas Minton, Senior Water Policy Advisor, Planning and Conservation League
Dave Hamilton, President, Residents for Responsible Desalination (R4RD)
Brandon Dawson, Policy Advocate, Sierra Club California
Mandy Sackett, California Policy Coordinator, Surfrider Foundation
Dr. Elizabeth Dougherty, Director, Wholly H2O

Just SOME of our Previous Coverage of Poseidon:


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"Admin" is just editors Vern Nelson, Greg Diamond, or Ryan Cantor sharing something that they mostly didn't write themselves, but think you should see. Before December 2010, "Admin" may have been former blog owner Art Pedroza.