Dear Lloyd:
I'm writing to introduce myself and to ask your help with a exciting challenge. You're a busy investment banker so I'll get right to the ask. As you may have read in my blog while riding Amtrak back and forth between New York and Washington, Los Angeles is working hard to secure a bridge loan from the federal government that would let us start building a dozen critical mass transit projects at once rather than over the next thirty years. You know all about bridge loans and other forms of financing don't you?
You see while the Feds and even legislators from both sides of the aisle love our inspired idea they're just not used to acting like an investment bank. Unless of course you consider acting like a bank the investment in the banks themselves, and car and insurance companies, that were too big to fail.
What I'm asking for is some help from some of Goldman Sachs' talent to crunch the numbers and work out a deal that does right by everyone - Angelenos jonesing for a mass transit fix and the US taxpayers who want to see a fair return on their investment.
The 30/10 Initiative, as my incessant blogging has noted, is an innovative plan to get a bunch of mass transit stuff built by borrowing against the revenues from Measure R, a Los Angeles County taxpayer-approved half cent sales tax increase to fund transportation improvements. Passed in 2008, Measure R demonstrated that LA voters are ready to ride the trains and buses like those in New York, Philadelphia and Boston have been doing for years. The problem is, without 30/10 we lack a true transit system, and are stuck with little more than a collection of good and not so good rail and bus lines.
As I believe they still say on the street, 30/10 is a win win for all involved. What do you get out of it? Well let's just say it feels good to give and in waiving your usual fee for structuring the deal you'd be keeping Goldman's PR department busy booking you on the morning news shows to talk about some welcome good news and what Wall Street's done for the country lately.
Meredith Vieira, NBC Today: "Hi Lloyd, it's good to have you on again. What have you been up to since getting back from Washington?"
Lloyd Blankfein: "Well Meredith I'm glad you asked. When was the last time you rode the subway or a bus rapid transit (BRT) line in Los Angeles? You never have, right? Well next trip to LA you'll want to, thanks to what I've been up to. Goldman just helped Los Angeles close a deal with the Feds that will permit LA to start construction on a dozen urgently needed mass transit projects..."
If you ask me that sort of interview feels better than a visit to the Hill.
While these critical transit projects aren't going to mean the end of congestion in Los Angeles, with the 30/10 Initiative likely to pump between $2 billion and $3 billion a year into the LA economy for the next several years it certainly holds the promise of putting a lot of people back to work both building sorely needed transportation infrastructure and feeding and clothing the families of the newly employed. I'm sure the cynics will just see this pro bono work of yours for LA as a PR and marketing opportunity, but who cares what they think. Anyone like you who can sit through the blistering sun of a Congressional hearing on Wall Street without a hat can take the heat.
Lloyd, though municipal government these days gets a bad rap, as you get into this I think you'll agree that a lot of the people working at City Hall are incredibly hard working and smart. They are doing all they can to run what is among the most complicated businesses out there. But since investment banking isn't typically LA's strong suit I hope you'll give this important assignment a shot.
Our guys, including Mayor Villaraigosa, will be back in Washington next week to do what they can to convince the Feds that 30/10 is the real deal and that it's a loan that the government can feel good about making. If you have any ideas for us before then, just shoot me an email and I'll call you right back. Like you, I sleep with the Blackberry so don't wait till morning once you figure things out. We can use the help and you can use a win.
My friends and family tell me I'm tilting at windmills droning on about this mass transit thing and asking Wall Street to do something for nothing. I hope you're up to the challenge and will join me in proving them wrong. Let's get this deal done and I'll gladly pay for your fare on the subway to the sea. From the look of things I bet you could use a little time at the beach.
Yours in transit,
Joel