Even by Richmond City Council standards, which count controversy as a staple of life, last week's meeting at the Richmond Memorial Auditorium was quite a show.
Mayor Gayle McLaughlin, a crusader who would be lost without a cause, reiterated her support for using eminent domain to seize underwater mortgages at deep discounts and repackage them for distressed homeowners.
Councilman Nat Bates and Vice Mayor Corky Boozé, who instinctively push whenever the mayor pulls, were so troubled by the legal and liability exposure in this scheme that they moved it be dismissed.
Councilman Jim Rogers, carefully straddling the fence, moved that Mortgage Resolution Partners, the partner in the plan, be required to insure the city against legal damages before it takes another step down a blind path.
So the only thing the first four speakers could agree on was that they didn't.
Rogers' motion failed on a 5-2 vote. Ditto for Bates and Boozé. McLaughlin's proposal to establish a Joint Powers Authority in pursuit of her goal narrowly survived, with backing by Jovanka Beckles, Tom Butt and Jael Myrick.
Eminent domain -- by which government entities seize private property for public use -- has never been used in this way, and there's some doubt whether it can. Securing land to build a public roadway is far different from seizing a loan to reduce a borrower's payments.
What further muddies Richmond's plan is that it doesn't even clear the help-the-poor hurdle. Of the 624 home loans it targets, none are in foreclosure, most are up to date and many are for houses in Point Richmond, Brickyard Landing and Marina Bay, whose residents won't soon be passing the hat.
Add to this the curious misconception, shared by supporters in last week's crowd of more than 400, that seizing loans will strike a blow against the evil banks responsible for the mortgage crisis. These loans were long ago bundled as mortgage-backed securities and sold to investors. Richmond resident Joshua Genser tried to explain this to the council.
"These loans are not owned by banks," he said. "They're owned by our pension funds, IRAs, 401(k)s, and if you take value away from them by using eminent domain, it is we who get screwed, not the banks."
Genser is a real estate attorney and perhaps the only voice of reason in Richmond. Council members had to ask him how mortgage trusts worked. He scratched his head afterward.
"There's a lot of ignorance on the City Council about this plan," he said. "Until I raised the issue the other day, Jim Rogers didn't know the city is supposed to get $10,000 from each of these transactions."
Genser said the community risks access to future credit if it enacts this eminent domain plan -- which, by the way, may be unconstitutional. It calls for seizing mortgages at less than market value and repackaging them at 100 percent. When properties are seized by eminent domain, full market value must be paid.
Wall Street, which convulses at uncertainty in the lending market, showed how it felt when $34 million in municipal bonds recently offered by Richmond went unpurchased.
The mayor is undeterred. She told the crowd it takes great fortitude to be a leader.
Some people think wisdom is also helpful.
Contact Tom Barnidge at firstname.lastname@example.org.