The pitfalls of government-driven property development reared up this week when Fairfield agreed to sell two properties acquired by the former redevelopment agency.
Fairfield’s agency spent $750,000 around six years ago on two houses in the downtown area. Further money was spent on relocating the residents and tearing down the structures. Wonderful plans that were going to improve the area both aesthetically and financially were used to justify the purchase.
Fast forward to the current day, and the true market value of the two properties hovers around $150,000. Due to redevelopment district liquidation requirements, the properties must be sold.
Those doing quick math realize that we lost $600,000 on the deal, or 80 percent of the “investment.” I say “we,” as in the taxpayers, since those tax dollars, regardless of which fund, account or grant they came from, originally came out of our wallets.
Hindsight is 20/20, and a lively debate can be had as to whether city resources should have been involved in the first place. Even if one feels that projects like these are a wonderful use of resources, one should demand to know what lessons were learned and what corrective action will be taken to prevent another financial bloodbath.
If I, as a project manager or business agent in the private sector, lost 80 percent on a deal, I would certainly get a severe dressing down from my boss and/or banker, but would most likely be demoted or fired; this is a natural result when responsibility and accountability are expected. Are the agencies and personnel involved in this failed business deal being held responsible and accountable? If they are, it would be reassuring to the citizens to see what improvements are being implemented to prevent another disappointing project.
Personally, I hold these groups to a higher standard. Agencies were started and tax dollars were usurped without the citizenry ever opting in to these projects. We were told that their years of experience in real estate property management and navigating the halls of government for funding would bring new economic vitality and civic pride to our communities, and eliminate pesky “blight” from our neighborhoods. Yet, their experience didn’t allow them to foresee the real estate market crash, nor did it prepare them for the dissolution of redevelopment districts. We were left with assorted empty lots pockmarking our community.
As a taxpaying citizen, I am hesitant to trust them in future endeavors.
Those who think this is crying over spilled milk and it is time to move on should think twice . . . the second coming of redevelopment districts is on its way. Senate Bill 1 is making its way through the halls of Sacramento, which theoretically will fill in the gaps associated with Redevelopment 1.0.
At the county level, another redevelopment scheme is brewing at the fairgrounds. Half of the current fairgrounds are underutilized, not vital to the function of government, and could be considered surplus. In the private sector, if an organization has surplus property they usually sell it off and invest the proceeds in vital areas of the organization. The county feels that they should spearhead a retail development project, since, apparently, there is a dearth of retail space in Vallejo.
Why not sell off the surplus property, and take the proceeds to upgrade the fairground facilities that are being kept?
The Solano 360 project is running up a $100 million bill, should proposed bonds go through. Keep in mind that all the politicians and consultants cheerleading these type of projects and funding agreements rarely have any of their own money on the line. Consultants will normally be overwhelmingly chipper on any grandiose project; any consultant giving pessimistic analysis on favored projects will find themselves looking for a new gig.
Years down the road when taxpayers are covering the bills, the cheerleaders will be long gone, working on the next great project.
As I travel around the county, I come across numerous instances of vital infrastructure in various states of disrepair; potholes in our roads, and dangerous cracks in our sidewalks. I think to myself: Can any organization that has trouble maintaining cement and asphalt be proficient at property development? If a contractor that screwed up the pouring of a driveway for your house offered to redo your roof for you, would you accept?
It is easy to be creative and visionary when playing with someone else’s money. As always, we the people should always ask two questions when our government starts a new program or project:
If the answer to either of these questions is no, then we the people should demand they shift their focus to vital and achievable endeavors.
Brian Thiemer is chairman of the Solano County Libertarian Party. He can be reached at email@example.com.