Monday, August 29, 2011

How The City of Charlotte Pissed Away 4 Million Dollars On A Bus Stop

According to the Charlotte Observer, the Charlotte City Council unanimously and without discussion approved the purchase of 1.4 acres of land for $771,150, or $479,000 more per acre than the current seller purchased the property for a year ago.

The property is home to a small community bus station, and CATS wanted to stop paying annual land rent of $55,000.

Eastland Bus Stop

The buyer of the property a year ago Andrew Segal said "The city came to me with a reasonable price, we didn't even have to negotiate" the deal.

According to the Observer: "CATS said the higher 2011 sale price is OK because it's a smaller piece of land, which makes it more expensive". In addition, the transit system said the Central Avenue frontage makes it more valuable than other parts of the mall.

In 2006, CATS spent $2 million building the Eastland Community Transit Center on the mall parking lot. The transit center is a nicely landscaped bus stop, with eight shelters and a ticket booth."

This is how government pisses away your tax dollars:

Step One: Build a Class "A" building in an area that has nothing but Class "C" space, and spend 2 Million Dollars for the building that is "single purpose" a building that could have been built for 1/4 the price. For good measure, build it on leased land, at an inflated rate and agree to a 25 year lease that has built in annual 5% rate increases and no provision for downward market adjustments.

Pissed Away Meter: $2,000,000.00

Step Two: Complete the building which becomes a conduit for undesirables to travel to an already at risk Mall. Two years later the Mall's slow death accelerates with the departure of major tenants. Pay property owner $110,000.00 for land lease.

Pissed Away Meter: $2,110,000.00

Step Three: Another two years pass and and while the clock is running talk about doing something, but do nothing and stand by with your collective hands in your pockets as the property is sold for pennies on the dollar and the Mall closes. Pay property owner another $110,000.00 for the land lease.

Pissed Away Meter: $2,220,000.00

Step Four: While the mall remains empty make failed attempts to get the new owner to redevelop the property with tax incentives, promises of low interest loans and grants. Pay another $55,000.00 in rent for the land.

Pissed Away Meter: $2,275,000.00

Step Five: Pay $771,150.00 for the small tract of land that your over priced building was built on. Make sure the price so high that the developer can't say no, in fact the idea is to make the offer so good that he is still rubbing his eyes in disbelief.

Pissed Away Meter: $3,046,150.00

Step Six: At this point the developer has no motivation to fast track the property because his exposure is now nearly 1/2 of what is was at this same time last year. Developer also seeks to have the property "re-valued" which lowers his tax bill from $700,000.00 to less than $100,000.00 of which most of that is attached to the property just sold to the city.

Pissed Away Meter: $3,646,000.00

Not surprisingly the developer is in now in no hurry to develop the property.

Congratulations Charlotte you now own a nearly 4 million dollar bus stop to nowhere.

Cedar Posts Bonus:

Fox News Charlotte's take on the CATS purchase:

Make sure you pick up on Charlotte City Council Member Nancy Carter's clouded thinking.

"I say keep it, invest in this land, and by investing you're sending a message to other investors, 'this is a good place to be,'" said Carter who adds that city council didn't just consider the appraised cost, but the opportunity to buy a unique piece of land.

Extra Credit: The Charlotte Observer's Editorial is here.


Anonymous said...

What do you bet Andrew Segal is still doing his happy dance?

Anonymous said...

Cedar I don't see how you got your numbers. No way the city would pay that much for not even enough space for a free standing Taco Bell.

Are you sure?

DWright1 said...

Cedar, it'll be worth it. When the Powers That Be cut the ribbon on this marvel of modern transportation they promised it would revitalize Eastland and the entire East Side. If I may presume to speak for the East Side, could we maybe see the timetable for that?

Ghoul said...

They had to spend the money, the DNC was waiting to know where Charlotte was going to move the undesirables during the convention. Now we know.

Anonymous said...

Segal is doing more than a happy dance he's having a beer with Councilman Howard and they are both yucking it up.

citynewswatch said...

Cedar-just saw a promo on Fox about what you have covered here on ridiculous land purchase. It'll be interesting to see what they cover on this story at 10.

Wonder if the other stations will even touch it.

citynewswatch said...

Cedar's analysis blows away anyone else's "story" on Main Stream. CO tried to do an editorial claiming some balanced opposition, but it was a joke. They're going to fall in line and will follow the march to Charlotte's continuing demise.

Negotiating a better deal when conditions changed... what a concept that would have been.