By Heatscore
In a recent visit to London’s downtown core, I was somewhat surprised by the sight of the Galleria Mall, flush from its recent $25 million face-lift. The new renovations, auspiciously geared towards reinforcing the building’s image as a combination workplace/shopping environment came complete with a new corporate moniker, prominently featured on the building’s fancy new glass facade: Citi Plaza.
The rebranding effort was part of an agreement between the Canadian Commercial Workers Industry Pension Plan (CCWIPP), which owns the building, and its monolithic new corporate tenant, Citi Cards Canada (a subsidiary of Citigroup Inc). As part of the lease agreement on its new 800 employee, 114,000 sq. ft. call centre facility, Citigroup demanded that the building be renamed in its image.
For those who don’t know, Citigroup is America’s largest bank. In addition to being a massive international banking conglomerate, it is also heavily implicated in the roots of the current worldwide financial debacle. Using a convoluted maze of speculative financial instruments, Citigroup heavily inflated their earning reports by lending out billions of dollars in the form of sub-prime mortgages before bundling them together and selling them to hedge funds and foreign banks as a toxic mess of debt-riddled securities. When the shit hit the fan in 2008, Citi was left holding the bag on billions of dollars of worthless assets, and the United States taxpayer was called in to bail them out.
To date, Citigroup has been bailed out on three separate occasions by the US Treasury Department. This includes $45 billion in capital injections, nearly $300 billion in federal guarantees on outstanding loans and the conversion of $25 billion in preferred stock into common shares. The company posted a record loss of $27.7 billion in 2008, and with further losses expected in 2009, some analysts are predicting that the financial goliath might need to be restructured in order to maintain some semblance of solvency. When a group of ten major U.S. banks was recently cleared by the Obama administration to begin paying back the $68 billion lent to them under the TARP bailout (in order to escape government caps on executive salaries), Citigroup was ostensibly absent from the list. The credit rating scores of Citigroup’s various subsidiaries have been dropping steadily for months, with its various Citibank divisions recording mounting credit card losses as more and more Americans find themselves unable to pay their credit card bills. In fact, Citigroup’s main interest in its new London incarnation stems from its use as a location to house call centre agents for its ever-growing credit collection needs.
Perhaps the cheerleaders of the downtown revitalization effort that applaud the shrewd maneuvering of Citi Plaza GM Lucas Blois are right when they point to the many employees Citi has brought into the Galleria, and the ripple effect that such an increase can have on local merchants – on the plus side, since many of these jobs center around debt collection, they are likely much more secure than those found in other less viable Citi subsidiaries. Be that as it may, the accompanying reality of the situation is that what is being billed by our mayor as a “positive step toward fulfilling our downtown revitalization plan for a thriving, bustling and attractive downtown streetscape” is really nothing more than the rebranding of the Galleria into the shiny new mascot of an internationally reviled financial black hole.
