Anti-Social Investment Watch: Half Moon Bay Mulls Issue of 'Vampire Bonds'

So-called social investing — where soft-edged sharpies stay out of tobacco, blood diamonds, and the like — has come under fire for producing substandard returns. Such critiques of do-well-by-doing-good investment-picking carry the implicit moral that one might do better by doing bad.

Into the the promising field of anti-social investment offerings steps the city of Half Moon Bay, a municipality 30 miles south of here. The city's manager recently told the publication Bond Buyer that it has obtained approval to sell $18 million worth of municipal debt — which we term vampire bonds — designed to pay off an apparently bloodsucking Woodside land speculator who has crippled a small town by simply purchasing land nearby, then going to court. The speculator, Charles Keenan, bought a piece of land outside town in 1993 for $1 million, and subsequently claimed Half Moon Bay had nine years earlier harmed the land's value by constructing storm drain improvements. The drain work created swampy conditions on part of the land, meaning it qualified as a “wetlands” — so environmental laws kept Keenan from building a subdivision there.

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