Something smells on this land deal in Downtown.....

For the last few weeks, the weekly paper "Downtown Garment and Citizen" has been doing yeoman's work in disclosing Councilwoman Jan Perry's "boondoggle of a land deal".

Some excerpts.

Word that city officials have reduced their offer for the 0.8-acre parcel follows ongoing coverage by the Garment & Citizen, including reports that some community members and real estate professionals have raised concerns ranging from the price of the land to the timing of the deal, as well as the process used by city officials to conduct the transaction.

9th District Los Angeles City Councilmember Jan Perry first announced the proposal to buy the land on Spring Street on January 14, raising questions with the timeline she cited. Perry said at the time that the price of $5.6 million represented a 12.5% discount from the land’s appraised value in September 2008. Perry didn’t mention the economic crisis that began in September and had brought massive job losses, big declines in real estate values, and giant bail-outs of Wall Street institutions by the federal government during the final months of last year. City officials apparently faced no competing bids for the land, either, raising further questions about why
Perry would announce a price in January and indicate that the deal would be completed by sometime in March—a relatively quick timeline that has gone by the wayside.
Perry has declined comment on the deal for the past several weeks.

A number of other concerns raised in the Garment & Citizen’s ongoing reports have surrounded the deal since it first became public, among them a decision by city officials to forego conducting their own appraisal of the land. They instead used an appraisal commissioned by Pasadena-based EastWest Bank, which works with Downtown Properties, a development firm that is selling the parcel to the city.

Other questions about the deal have been prompted by the use in the appraisal of a comparable deal that never went through at a much higher price than the current market commands. The comparable deal listed in the appraisal involved a similar parcel at 9th and Hill streets considered to be “under contract” at the time for $8.75 million. That land remains on the market for an estimated $6.5 million, however, and the current price represents a 25% discount from the total listed in the appraisal. A similar discount would double the price break that city officials claim to have gotten on the parcel on Spring Street, and would bring a savings of $800,000 on the transaction.

Another factor to raise concerns is the role of Reginald Byron Jones-Sawyer, who serves as director of asset management for the city’s Department of General Services and appears to have a key part in transactions such as the deal on Spring Street, based on official responses to inquiries about the proposed acquisition. Jones-Sawyer also serves as secretary of the California Democratic Party and as a member of the political organization’s finance committee. The California Democratic Party counts many local real estate development companies, executives, and representatives as donors.

Editor Jerry Sullivan deserves multiple kudos for his journalistic tenacity in exposing this shady land deal in downtown.

****Link to LA Weekly's story on Councilwoman Jan Perry's "Grand Avenue Conflict".