Sunday, November 2, 2014

Michael Krieger: Welcome to Arcadia – The California Suburb Where Wealthy Chinese Criminals are Building Mansions to Stash Cash

"An all cash purchase."
(Mod: Michael Krieger is the kind of muckraking investigative blogger that gets a ridiculous amount of reposts on his articles. They are literally everywhere on the Internet. It is some pretty good stuff, especially if you prefer your on-line news reading material to be more on that "alternative media" tip. Which, as you know, I most certainly do. Mainstream news having pretty much become an oxymoron these days. Lately Krieger has written about an issue near and dear to many Sierra Madre residents, and that is the molten international real estate market just down the hill from us in a place known simply as Arcadia. Here are excerpts from four Krieger articles, all closely related to this topic of great local interest.)

Oct 16, 2014 - Welcome to Arcadia – The California Suburb Where Wealthy Chinese Criminals are Building Mansions to Stash Cash (link):

The city, population 57,600, projects that about 150 older homes—53 percent more than normal—will be torn down this year and replaced with mansions. The deals happen fast and are rarely listed publicly. Often, the first indication that a megahouse is coming next door is when the lawn turns brown. That means the neighbor has stopped watering and green construction netting is about to go up … Arcadia is a concentrated version of what’s happening across the U.S. The Hurun Report, a magazine in Shanghai about China’s wealthy elite, estimates that almost two-thirds of the country’s millionaires have already emigrated or plan to do so. – From the Bloomberg article: Why Are Chinese Millionaires Buying Mansions in an L.A. Suburb?

The surge in foreigners buying up U.S. real estate has been well documented in recent years. Of all this buying, no nation has demonstrated a bigger increase in purchases than China. In fact, it is estimated that 24% of all foreign purchases of domestic real estate this year have come from China, up 72% from last year. In my post from July, Chinese Purchases of U.S. Real Estate hit $22 Billion as The Bank of China Facilitates Money Laundering, I noted that:

In some California communities, 90% of real estate buyers are from China. Yes, 90%. Naturally, many of them are buying multi-million dollar homes in “all cash” transactions.

Well it appears that one of those communities is the 57,000 person Los Angeles suburb known as Arcadia. The suburb had a relatively insignificant Asian population of 4% in 1980, but it is now 59%. Of course, I could care less what the ethnic mix of any particular suburb is, but what does concern me is that a lot of the recent money coming in seems to be from questionable characters. The buyers are getting access to U.S. real estate via the EB-5 visa program, and of the 10,000 of these given away this year, 85% went to the Chinese. Oh, and it’s estimated some 20% of these homes sit vacant. A great use of resources.

Jul 9, 2014 - Chinese Purchases of U.S. Real Estate Jump 72% as The Bank of China Facilitates Money Laundering (link):

American citizens already have a hard enough time affording a home. Squeezed out by financial oligarchs buying tens of thousands of properties for rental income, and faced with real wages that haven’t budged since the mid-1970s, the demographic of U.S. citizens that historically dominated the new home market has been forced to live in their parents’ basements. Just to kick em’ when they’re down, Americans now face the impossible task of competing with laundered Chinese money.

Of course, this isn’t a new trend. I first covered it in January 2013 in the post: Corrupt Chinese Politicians are Buying Billions in U.S. Real Estate. This was then followed up a couple of months ago in the piece: Zillow Opens the Floodgates to Chinese Buyers in Order to Keep Housing Bubble 2.0 Inflated.

While this trend may not be new, it is certainly accelerating. According to the National Association of Realtors in its annual report on foreign home purchases, transactions from Greater China (includes Hong Kong and Taiwan) were up 72% in the past year to $22 billion. In some California communities, 90% of real estate buyers are from China. Yes, 90%. Naturally, many of them are buying multi-million dollar homes in “all cash” transactions.

Apr 2, 2014 - Zillow Opens the Floodgates to Chinese Buyers in Order to Keep Housing Bubble 2.0 Inflated (link):

Earlier this week, Michael Snyder made quite a splash in the alternative media world with his article: The Chinese Are Acquiring Large Chunks Of Land In Communities All Over America.

Meanwhile, just last year I covered how corrupt Chinese are laundering their money through U.S. real estate in my post: Corrupt Chinese Politicians are Buying Billions in U.S. Real Estate.

This is a very important trend that we must keep our eyes on in the years ahead. Particularly since private equity buyers and hedge funds can no longer make a return on buy-to-rent, the real estate industry will become increasingly desperate to pitch American property to anyone willing to keep Housing Bubble 2.0 inflated.

From Bloomberg:

Zillow Inc. agreed to make its U.S. property listings available to Chinese consumers through a partnership with a Beijing-based website.

E-House Holdings Ltd.’s Leju real estate site will carry Zillow listings that include homes for sale by agent and owner, units in projects under construction and foreclosures and short-sale properties, Seattle-based Zillow said today in a statement.

Chinese buyers spent more than $11 billion on U.S. real estate last year, with an average $425,000 purchase, Zillow said. The Leju-Zillow site, to be operated by the U.S. company, will be ready around midyear, according to the statement.

“Brokers and agents with listings on Zillow are now able to reach Chinese home shoppers who are ready to invest in the U.S. market, with no additional cost or effort,” Errol Samuelson, Zillow’s chief industry development officer, said in the statement.

Have fun being a peasant under your Wall Street and Chinese feudal lords.

Jan 22, 2013 - Corrupt Chinese Politicians are Buying Billions in U.S. Real Estate (link):

Many of us spent much of 2012 confused about how the U.S. real estate market was improving within the context of a broke and unemployed citizenry.  Well as time has passed the answers to our questions have been revealed.  The criminals are piling in.  I first explained a couple of weeks ago how the financial oligarchs in the United States are currently in a bidding war to become America’s slumlords in my post: America Meet Your New Slumlord: Wall Street.

Now we also discover that part of the bid to U.S. real estate has come from another criminal class. In this case, we are talking about corrupt Chinese officials who are pulling their ill gotten gains from their homeland and desperately placing it in real estate all over the globe. From The Telegraph:

China's Communist party cadres launch property fire sale (link)As China’s new leaders intensify a campaign to root out corruption, thousands of Communist party officials have been panicked into a fire sale of their illicit properties while billions of pounds have been smuggled overseas.

It said the volume of deals had intensified by “a hundred times” after Xi Jinping, the incoming Chinese president, warned that corruption could kill the Party and put one of the country’s most vigorous and resolute politicians, Wang Qishan, in charge of stamping out graft.

It also claimed that an astonishing $1 trillion (£630 billion), equivalent to 40 per cent of Britain’s annual GDP, had been smuggled out of China illegally in 2012.

Marco Pearman-Parish at Corporation China, a company in Beijing that helps clients find properties abroad, said there had been a strong rise in clients looking for homes in the Cayman Islands.

In the United States, the National Association of Realtors said that more than $7 billion of properties had been bought by Chinese in the US last year. Some high-end homes are now specifically built for rich Chinese with ponds for koi carp and a second kitchen for pungent cooking.

I guess word has gone out globally that the U.S. is open for business as far as the global criminal class is concerned. They can rest assured knowing they will never face repercussions in this lawless land.

At least that is what they think.  What we must do is never forget who is buying all of these properties and when the time comes they should all be seized and these crooks sent back to the place they came from.

(Mod: In light of all of this, I wonder if Sierra Madre's City Council might consider getting that new General Plan in place sooner rather than later. You know, while there is still a Sierra Madre left to plan?)

http://sierramadretattler.blogspot.com

75 comments:

  1. Shouldn't the FBI get involved? Why has Arcadia's City Hall caved in so completely to these corrupt people?

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  2. The interesting wrinkle is that these Chinese buyers with all cash that has been smuggled out of China, in many cases, but not all, are squeezing out native born buyers who just can't compete with that kind of money. Much of it is ill-gotten gains made by being connected to the communist party over there. If you're not "connected", you're not making any money. They are trying to get that money out as fast as they can because they see the writing on the wall - i.e. China may implode because of the inherent conflict between its semi-capitalist economic model and its totalitarian political structure. Real Estate agents will tell you that, in San Marino, Arcadia, and South Pasadean, you can get twenty offers on a property with 90% of them having Chinese surnames. That's simply a fact. Its also a fact that for many of these buyers - not all - they like big two-story homes with big chandaliers, lots of marble, pillars and statues of lions - so they are tearing down the older homes. Homes are a status symbol for the new rich. How did the Chinese get rich? Not because they are brilliant businessmen. Its because in the name of increasing profit, out country shifted its entire manufacturing base to China. That combined with being connected to the party over there and you're going to have alot of millionaires. What are they doing with their new-found wealth? They are asserting themselves militarily and threatening alot of their neighbors in the South China Sea and they are buying up our real estate. We have indeed sold the rope that hangs ourselves. Make no mistake, Sierra Madre's days are numbered. All it takes is for a few real estate "spotters" to say that's the place to buy and then you can have 10 million people wanting to buy in a town of 11,000 thousand. It can all happen very fast. Look at Valley Blve, then head north to Las Tunas, keeping going to Huntington Drive. We are witnessing the most massive and rapid demographic shift this country has ever seen. The only appropriate analogy would be the Indians seeing the wagon trains pouring west. This time we are in the position of being the Indians. They saw there entire way of life turned upside down in a span of about thirty years.

    ReplyDelete
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    1. Yup it's called karma...............

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    2. China is a slave labor state. This money was obtained through the ruthless exploitation of their own countrymen and women.

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    3. That's write 7:08. A few million people over their made alot of money on the backs of the slave labor. I hate to say it but many of our corporatoins loved the lower costs and shifted the manufacturing over there and turned a blind eye to the exploitation of the labor force. Its a sad commentary on how captitalism which is a good thing and has brought more people and more countries out of poverty can be perverted into the chase only for profits. That's when naked greed sets in.

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  3. Without an airtight General Plan in place and a Municipal Code that reflects the letter and sprit of that document, its over. Sierra Maddre will be just like Arcadia. City Hall and people like Dereck and formerly Danny will always allow and promote development to the extent they can under those documents. The documents have to reflect what we want. In Arcadia's case, it can't be done any more because you have a new majority that likes the changes taking place over there.

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    1. The only solution, and I mean the only solution, is to prohibit what we don't want via the General Plan and Municipal Code. Its within our power. The only question is whether we have the will.

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    2. A lot of this is a direct consequence of misrule by the likes of Buchanan, Doyle, Mosca, Moran and Walsh. Adequate protections could have been put in place years ago, but were not. This was deliberate. These rats were always in the pockets of the developers and real-estate interests. Look at where it has gotten us now.

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    3. 9:02m those rats aren't just in the pockets of the developers and real-estate interests, they actually work for real estate and development interests. Mosca and Buchanan work(d) for utility companies, Moran sells home mortgages and Doyle was a building industry lobbyist.

      Don't forget we elected a commercial lending banker and a construction company owner.

      Not sure about Walsh - she always had me puzzled on why she ran and why her entire 4 years was trying to add storage to the Senior Hall by closing the Memorial Park bathroom and using the space.

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  4. The trend outlined above will only accelerate over time as owners in Sierra Madre see the writing on the wall and want to take advantage of the high prices offered by the Chinese buyers and cash out. I have talked to so many people who are planning an "exit" strategy to leave the area where they grew up. Its very sad actually. All this development, traffic congestion, 210 freeway is now bad, tearing down homes, its the opposite of everything that is wanted by the old guard which favors smaller homes, sustainable, likes the funky architecture of Sierra Madre. Its all going to go out the window and it will happen one house at a time and one development at a time until you wake up and you say, wow, Sierra Madre is not what it used to be. Sad, Sad , Sad. What's worse, it that we hve the power to stop it. But despite the vast majority of the town wanting a different future, its always the same 10 or 15 people who are yelling "Stop".

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    1. The plan is ready to go. It needs to be cleared by city council and then be looked over by the environmentalists. Elaine is dragging her feet on that one.

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    2. Why is she dragging her feet? There needs to be an investigation. She is putting our entire community in danger.

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    3. If Elaine continues here in her present capacity then it is the City Council that is dragging their feet. She needs to go.

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    4. The General Plan was completed over a year ago. It is Elaine who is delaying it just like she did when it was being worked on.

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    5. Instead of investigating the General Plan and why/why not things are being done as a way to put Elaine in her place and serving us instead of herself and developers

      Investigate her for charging the Mt Wilson Trail Race over $18,000 for 200 staff hours which was complete fraud

      She needs to go and she can hide behind smoke and mirrors with the General plan but she can't and won't explain why she charged events like the race and the 4th of july parade obvious cooked invoices

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  5. This needs to be a part of the discussion at the November 25th City Council meeting. Should everything Sierra Madre has been about for the last 100 years be sold to foreign criminal elements looking for ways to launder smuggled money? Can we update the General Plan quick enough to stop this?

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  6. We have to keep one thing in mind. Its not the fault of the Chinese. This is a great place to live. I don't blame them for wanting to live here. I don't blame them for wanting to get their money out of China as fast as they can. I don't blame them for building homes that are in compliance with the building standards of a given city.I don't blame them for putting Chinese characters on all their building signs so that Chinese can patronize thier businesses. We're the idiots that shifted our manufacturing base to China and turned a backward communist country into an economic powerhouse that competes with the United States on a global level. We helped to create the monster that is now a military threat to Taiwan, Japan, Vietnam and, yes, the United States. We say we care about Sierra Madre and its quaint village-like atmosphere and architecture and yet we do nothing to stop let splits, teardowns and the creating of McMansions and monstrosities like Camillo and One Carter. Sorry folks but we get what we deserve for being not only stupid but also apathetic.

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    1. The General Plan could have been approved and in place years ago. City Hall dragged its feet and complained the entire way. Yet this is the one document that could stop all this. Coincidence? I doubt it.

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    2. I don't have faith in the general plan anymore.
      It seems like it's violated at will, and there are no consequences.

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    3. That is why the City Council meeting on the 25th is so important. That is where they can put some backbone into the General Plan and enforce it.

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    4. The General Plan is not the panacea to this problem. Its a very important step. But the General Plan can be open to interpretation particular by the pro-development mentality at City Hall that will always try to find a way to allow things that nobody wants. The second step is to make the Municipal Code reflect the General Plan and contain the specifics of what is and is not allowed. The General Plan by itself is worthless. The teeth need to be put into the Municipal Code.

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    5. City Hall needs to be rebuilt from the ground up.

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  7. Government has been nonexistent in all of this. How many state and national elected legislators are beholden to these people do you think? Has cash changed hands? Is this part of what it means to be a debtor nation?

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  8. This is one of the problems with the truth. It can be so politically incorrect.

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  9. Foreign investment is good for the economy. It's capitalism at its finest and purest form.

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    1. You equate capitalism with criminal activity? Hmm.

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    2. Capitalism has been a good thing but, like everything else, if divorced from responsibility and morality, can quickly degenrate into pure greed which is a bad thing..

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  10. The laws of PRC are not the laws of the USA yet! Foreign investment is welcome in our country

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    1. Right. But you didn't answer the question. Do you equate capitalism with criminal activity, Watchman?

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    2. To answer(if mod so desires) your question directly yes. The "tycoons" we have had here in the rise of this great nation all built their empires on the backs of poor working people,selling illegal substances,graft, and tax evasion.

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    3. You should get a job at the Politburo in Beijing. The economic reforms and show trials that are just around the corner could use someone of your ideological persuasion.

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    4. Well if I were so fortunate I would get richer,invest my Yen here, and build a Mcmansion next door to you and live in splendor above the squalor.

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    5. This comment has been removed by a blog administrator.

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    6. Squalor.
      https://farm8.staticflickr.com/7451/11449155136_2cdcd77e12_c.jpg

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    7. May you drown in one of your 7 toilets, 7:41. Which I understand are suitably large.

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    8. Preserve Sierra Madre has helped also. They need more help. Please go their website. Get your bumper sticker, volunteer, etc. we need you.

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    9. I agree. Preserve Sierra Madre is pivotal in the fight to save our community. It is the one vital organization we have.

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  11. Great collection of articles Tattler. Thanks.

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  12. More and more people seem to be waking up ot what is happening right under our noses. We can just sit back and let the teardowns and overdevelopment take place or do something about it. Talk is cheap. Thanks to the Tattler for helping to bring this isse to the forefront. If we do nothing, Sierra Madre becomes unrecognizable in 10 years.

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  13. November 25th could be one of the most important city council meetings ever held here.

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  14. This general plan is not the issue!
    1) I do not have faith in Elaine and cousin Bruce I.,
    2) all things can change for the better, but we must hire better city management!

    When is this going to happen?

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  15. Better have all your p's and q's ready for the Carter One house review. Just because it will be reviewed, doesn't mean the Council can overturn it. They have to listen to all the arguments (from us And sleezy attorney,, consider the facts, and then vote. You can bet that the city attorney will have briefed them prior to the meeting just like she did the planning commission. As independent as the planning commission members are, they still caved.

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    1. Any city councilmember who wants to be known as one who caved into McMansions is free to try their luck. It is not what the vast majority of people living here want, and in a democracy that sort of thing occasionally counts.

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    2. Right you are 12:11.
      Highsmith will no doubt educate the council on their peril and assure them that MacDonald and CETT will win no matter what.

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    3. I'm sure they chat often.

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    4. The Colantuono law firm has used the "we must avoid lawsuits" defense of developers before. It makes perfect sense that Highsmith would be flogging that old donkey around the track one more time.

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  16. any billionaire criminals looking to shelter their money in a useless property in a waterless town with no soul, please submit offer.

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    Replies
    1. We do have unicorns. And really civil people.

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    2. Can't you hide money just as well in Irwindale?

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    3. Dang. Someone always has to point out the positives.

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    4. Irwindale exists to make Azusa feel good about itself.

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  17. I don't know if you saw the article in the Sierra Madre Weekly, but they equate opposition to McMansion development with Japanese internment camps in California during World War II.

    "Can’t independently verify if that is true or not in our Chamber archives that do not go that deep into recording such initiatives 80 years ago. If it is true, it is certainly sad and unfortunate. It would also not be surprising, given the era — this would have been nearly a decade before the federal government rounded up American citizens of Japanese descent and even housed some of them against their will right here in Arcadia at Santa Anita Park race track – another brief period of our history for which we are embarrassed to be associated."

    It is amazing (and somewhat disgusting) what some publications will do for real estate advertising.

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    1. It is also quite an oafish historical insensitivity when you consider that during their war with Japan the Chinese lost 14 million people.
      http://www.psmag.com/navigation/politics-and-law/china-lost-14-million-people-world-war-ii-forgotten-66482/

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  18. We live in a republic we follow laws 12:33. It does not matter what the majority of people want it is what the majority of people have made law as defined in our constitution.
    The US is a Republic. It is governed by rule of law. The elected is supposed to be bound by oath to the written governing limits (ie constitution) yet vote "together" and create laws to address concerns of the represented in a democratic way

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    1. And who makes the laws if not the people? Zeus?

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    2. Read the post. We are bound by law that we the people "make" as bound by our constitution and case law. The laws must be "constitutional" The majority cannot just make laws they want, example if the majority of the people prevailed I would not have the right to marry.

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    3. A lot of people supported your right to marry. If they hadn't the law wouldn't have changed. In Sierra Madre a lot of people want this community to maintain its small village charm. Why does that bother you so much?

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    4. It is sad that some people, so concerned about their own rights, can care so little about the rights of others.

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    5. You have to do it properly so it stands up in court. You can't just makeup laws about anything you want. Wait are you speaking about the rights of property owners or "concerned" citizens?

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    6. Whatever you say.

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  19. Xi Jinping: no leniency in Chinese corruption fight
    http://www.telegraph.co.uk/news/worldnews/asia/china/9818351/Xi-Jinping-no-leniency-in-Chinese-corruption-fight.html

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  20. If it can be proven that the money to e used to build One Carter is from illegal sources (aka laundered $), can the city refuse to allow the development? after all, if the city knows the money is illegal and allows the project, itn't that aiding and abetting a crime?

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    1. AMERICA REVEALED AS TOP SPOT FOR CHINA'S 'NAKED OFFICIALS'
      http://www.icij.org/blog/2014/08/america-revealed-top-spot-chinas-naked-officials

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  21. The city council meeting from last Tuesday still isn't up on KGEM.

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    Replies
    1. There's still a lot of public comment that needs editing.

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  22. Posters beware, this is the ONLY location in the area where a poster can post their honest feelings and not be 'stopped or restricted' or in other words censored or stopped. Take Topic.com - these is a phony web site if there is ever one to be exposed for their false pretense of open government. This site must be controlled by very insecure people?

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  23. What happens in the real world: http://www.complaintsboard.com/complaints/topixcom-palo-alto-california-c348887.html

    ReplyDelete
  24. This is what you get when you are censored from topix.com We're sorry, there was an error serving your request

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    ReplyDelete
  25. You bet: http://www.topix.com/forum/news/topix/TTPB2O60V4TG0RV0V

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  26. Write Elaine and ask her why.

    ReplyDelete
    Replies
    1. It is just another way of keeping public comment off of peoples TV screens.

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  27. China and the US have no extradition treaties. It is one of the prime reasons why Chinese money smuggler come to the United States.

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  28. Our home was built in 1988. It is on a very large lot. It was too big to take care of and we decided to sell. We originally paid less than $300k. We were approached by a Chinese businesswoman willing to give us just under $1.4 million cash. Her husband, a jovial man was an admiral in the People's Liberation Navy. They said they wanted to have a home in the US to send their kids to USC. Our home was worth about $950k. We held an open house limited to cash buyers We had seven cash offers for our house, all near the selling price. One was so bold that he had already gone to City Hall to find out what he had to do to tear down our 2800 square foot house and replace it with an 8000 square foot house

    We sold that day. Escrow was two days. After we moved out we learned that the house is full of several families, including pregnant women having their babies in the US. The property is overrun with people.

    Our old neighbors have mostly sold in the last year. All of the sales were for cash. We felt bad what happened. Instead our old neighbors thanked us for starting the run on property on our street.

    People just cannot fathom what is happening to the San Gabriel Valley. Go to Monterey Park at Atlantic Blvd and the San Bernardino Freeway to see the hundreds of thousands of square foot monstrosities they are building.

    We moved 70 miles away. We live in a gate guarded community near the beach in a house twice as nice as our old one, costing $300k less. Guess what? Our new next door neighbor paid cash for her house. She comes once a year to see it. She lives in China. Our house just went up $300K in value. Sales are for cash and take one day to complete.

    There is a trend developing..............

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