At Tuesday night's city council meeting
, Councilmember Robbie Perkins
proposed that the city purchase the infamous partially-burned apartment complex on Cedar Street currently owned by Bill Agapion. While Robbie's proposal is backed with a lot of good intentions, there are a lot of hard-to-swallow implications attached to it.
Why would the city even consider this, and what's the big rush? This rundown complex has been consistently cited for housing code violations and is deemed by most people to be a blight on the surrounding area.The owner is asking $1.65 million for the property, seemingly well above the appraised value. He has set a deadline of December 31 to close on the property or else the offer is off the table and he will proceed with his own plans.
Originally, the nonprofit
Community Foundation of Greater Greensboro had been working on a plan to acquire this property and sell it to private developers to improve it. At least five local developers were working on proposals on how they would best redevelop the property. Unfortunately, the Foundation was advised that this transaction would damage their nonprofit status, and they had to drop their well-intentioned plan.
That's why Robbie began working with the city's
Housing and Community Development department to see if the city could get involved and salvage that plan. The proposal is to purchase the property for $1.65 million, add in an adjacent tract of land already owned by the city, and resell it to a private developer for an estimated $1.4 million. That leaves a net monetary loss to city taxpayers of "
only" $200,000 - 300,000.
Supporting arguments say this loss will be recouped by the increased tax value of the property once it is properly redeveloped, there will probably be less demand for costly city services (
code enforcement, police, etc.), and surrounding properties may become more valuable once the blight is removed (
generating more property tax revenue). This sort of loss is typical of many of the city's redevelopment projects where more tax money is spent than is immediately recouped, but the net effects on the surrounding community are deemed worth that expense. An example of this is the sale and rehabilitation of older houses in College Hill and the Martin Luther King Drive area - quite often the value of the renovated house is much less than the cost of the improvements - but the neighborhoods benefit from the upgrades that occurred.
Opposing arguments say taxpayers are being gouged by paying significantly more than the property is worth and a landlord with a poor reputation gets rewarded. Opponents are saying the city should not be involved in such efforts and let the private sector shoulder the financial risk. Here are some excerpts from emails I have received on this topic.
"Have you no shame. How in the world can you even begin to consider spending above market price to buy the property on Cedar street from such a disreputable character. The only way I could conceive of this action being palatable would be if the city required Agapion to put the proceeds into a special account monitored by the city to repair as many of the firetraps that he owns as possible. Otherwise, let the real estate market take care of the problem. If Robbie Perkins wants to see the land developed then he should put together a group to buy the land and develop it, not have the city be the middleman. We citizens of Greensboro are tired of seeing our tax dollars dumped into dubious ventures without sufficient oversite such as the Project Homestead debacle and the Civil Rights museum. I think the argument that the city will see improved tax revenue is not sufficient justification for the purchase, and while I can see some advantages to cleaning up a blighted area, I don't think the city should be gouged by the likes of Bill Agapion. If five developers are interested in the site, let them negotiate the purchase and take the risk. That is not the City's job..."
"I oppose Greensboro's purchase of the property on the corner of Cedar and W. Friendly Ave. I do not see why the city has to get involved with this property at all. Let the private developer buy the property and then the city can sell the piece it owns to the developer as well. I don't see why the city should take a loss to gain a profit in taxes later. Who comes out ahead in the short term? One of Greensboro's nicest landlords? Someone who has inhabited the property in recent times? No, one of Greensboro's landlords who has had many violations cited on his properties. You know we and others do read the newspaper. This appears like rewarding code violations and blight to us. Let the current owner and his representative do the negotiating in selling the property to those developers who want it. What will the market bear?"
In his presentation, Robbie outlined three scenarios:
* The city can pay the asking price and purchases the property for resale to private developers and likely absorb a net loss in order to improve the area.
* The city can exercise its right of eminent domain and condemn the property with just cause, reselling it to private developers. (
Sound like a recent controversial Supreme Court case?) I do not believe we councilmembers (
or the community at large) have the stomach to proceed down this treacherous path. Plus, I would anticipate a lengthy lawsuit to ensue since the property owner would likely fight this action.
* Do nothing and leave it up to the current owner to repair and upgrade the property. Given his past record.... Enough said.
In my opinion, NONE of these scenarios are very palatable so we find ourselves in that proverbial "
between a rock and a hard place" situation.
This item is on the
agenda of Tuesday's briefing session for additional information, discussion, and possible directions to staff to proceed or not. The main information I'm looking for is the following:
* What is the current tax value, what does an independent appraisal says the property is worth?
* How would the city finance the purchase? Can we afford to do so?
* Will private developers get involved in the project without the city being the middleman?
* What would be the realistic price a developer would pay the city for the property?
* Will the private developer be seeking additional city funding support in the actual construction and redevelopment of the property?
* What is the estimated value of the property once it is redeveloped?
My final decision will be based on the responses to these questions. My heart says "
let's do it" and take care of a recurring problem once and for all, but my brain says "
this is fiscal foolishness."
What do you say? I need your thoughts, reactions, and advice on how to best deal with this situation. Your turn!