Quote:
Originally Posted by VivaLFuego
^ It's a much broader issue than just CPS's real estate practice (or lack thereof). It ties into the fundamental distortions of (1) institutions having tax exempt land, gifting us with stuff like private parking lots in high-demand areas with little economic incentive to do otherwise; and (2) the basic incompatibility of normal real estate transactions and the government procurement/ethics process.
In re: disposition of excess land, unlike China (where land sales are the fundamental revenue source for government), it's just a very controversial and time consuming process here, all the moreso when the land is ever more valuable and ends up being steered toward ever more connected private interests (remember the Wilson Yard fiasco). The sale can't occur via a normal market transaction with offers, counteroffers, and the like; rather, it has to go through essentially a reverse procurement process, and all that entails vis-a-vis financial disclosure (which itself deters a lot of potential buyer interest), bidder qualification, and nebulous/subjective "public goals" that may be specified in the RFP due to political pressure. In fact, it can take so long that the owner basically misses a market cycle, and that a potential developer can't adequately manage his risk or make it profitable within the restrictions set by the seller, so at the end of the day it's pretty easy for both sides to deem it not worth the trouble.
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Yeah, I figured there were some regulatory roadblocks. If I ran CPS, this would be one of the first things I would change.
I don't think it necessarily matters if land goes to politically-connected developers; the point is to get money for education. Any actual development that occurs is just a pleasant side effect.
So long as the sale price is reasonably commensurate with the sale prices of nearby properties, then the specific owner of the land isn't the City's concern. It might be smart to restrict the process to 99-year leases instead of fee-simple sales, though... and you could appoint an independent appraiser to manage the process,
a la Inspector General.
Not to make it too complex but if a potential buyer makes a bid below what the independent appraiser deems to be fair market value, then you could require the buyer to build a certain percentage of affordable housing... making it, in the end, less profitable for them to bid low.