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".

Editorials on Mayor Villaraigosa's $5 Billion Housing Plan

Mayor Antonio Villaraigosa's ambitious 5 year, $5,000,000,000 Housing Plan has garner some interesting responses in print publications big and small.

From the big soon to be small LA Times, "A foundation, at least".

It is easy -- too easy -- to be underwhelmed by the housing plan released this week by Mayor Antonio Villaraigosa. Much of it we have seen before: streamline the development process, encourage denser housing near transit stops, build permanent supportive housing to get the chronically homeless off the streets. Great ideas, if only they would be fully implemented. **Even controversial elements such as "mixed-income housing" -- a mandate that all new developments include "affordable" units -- come with few particulars and leave the nuts-and-bolts discussions for later.(**Nice of the Times to point out Ed Reyes's contribution to the Mayor's plan).

Jumping over the Santa Monica Mountains, we get this from Ron Kaye's old stomping grounds at the Daily News, "The mayor's plan for affordable housing has curious timing".

WHILE a worried nation waited for Congress to save the mortgage-mangled U.S. economy with $700 billion in Wall Street relief this week, Los Angeles Mayor Antonio Villaraigosa was already moving on with his five-year, $5 billion answer to the city's affordable-housing woes.

This interesting timing raises one important question: Is Antonio crazy-smart, or just crazy? (Ahh, crazy and smart??)

Back in Downtown LA we have the news story and editorial, "Mixed-Income Ordinance Needs Work" from the Downtown News.

From the editorial,

It is too early for this page to take a stance on whether to support or oppose the Mixed-Income Ordinance, as what the Council will ultimately vote on - if it even gets that far - will almost certainly be far different from what has been presented to date (the basics calls for requiring 12.5%-22.5% of units in large projects to be set aside for low- to moderate-income households, or developers could pay to have the units constructed elsewhere). What we do urge, however, is that Villaraigosa and those pushing the proposal proceed very carefully and consult with all sides. We also urge that they keep a keen focus on the happenings and situation in Downtown Los Angeles. This community has seen far more residential development than any other part of the city in the past decade, and there are still dozens of housing projects proposed for the area. Thus, any ordinance requiring affordable units would have a particularly heavy impact in Downtown. (One should also take into consideration that the current administration at City Hall has issues with developing a "END GAME" on a vast variety of initiatives, can one remember the Million Tree Initiative??)

Then we finish with this from the "Downtown Garment and Citizen", "Villaraigosa Housing Proposal: Billions of Dollars and Too Little Sense".

The Garment & Citizen appreciates Villaraigosa’s willingness to step up to a challenge. We like politicians who want the spotlight when the going gets tough. We also appreciate Villaraigosa’s political instincts, which are usually well-honed.

We must, however, respectfully inform the mayor that he has gone tone deaf on this one.

Our nation is currently amid a crisis wrought by a lot of folks who talked in vague terms about the financial aspects of housing, and a bunch more who didn’t listen closely enough. We have a bunch of elected officials trying to figure out what to do about our problems, and it’s a safe bet that many of them still can’t explain how Wall Street’s exotic financial instruments figure into the misery. We have a big chunk of our corporate class that used to revel in the sharp edges of the free market but now await government rescue.

Now is not the time to launch a $5 billion proposal that relies on “tax-credit equity” for even a single bit of its funding. Not unless you are willing and able to explain the meaning of tax-credit equity, and how it benefits taxpayers. Nor is this the proper climate for putting 20% down on a $5 billion proposal and “leveraging” the rest of the funding. (Sounds right on to me...)

Your comments greatly appreciated.........