I have lived in Tucson for almost 30 years, and repeatedly, I have seen the City of Tucson-- and the taxpayers-- get screwed on real estate development.
I am not a high-powered lawyer, but I have written and signed a few contracts in my day. My multiple life experiences lead me to ponder one question: Who writes the real estate development contracts for the City of Tucson? Why do I ask? Because-- regardless of the deal-- it seems as if the city (AKA "we") end up with the short straw.
The latest example of this-- the Vista Sierra Apartments in midtown-- was featured in the local section of Sunday's Arizona Daily Star.
The article is a bit confusing about ownership of the now-closed, low-rent apartment complex saying, "For now, at least, Vista Sierra belongs to the Metropolitan Housing Corp., an independent nonprofit created by the city's Metropolitan Housing Commission. It bought the complex in 1996 from the original developer."
So, is this owned by the city or not?
The problem is the Vista Sierra apartments were purchased 14 years ago with the same basic cooling system problem that closed it down this summer.
This is a very expensive problem, since, according to the Star, "The chiller's pipes are in the building's foundation. [yikes!] They're hard to get to, expensive to repair. The fix will cost a million dollars - nearly half what the assessor estimates the place is worth."
When I bought my historic house in 2004, I paid for a home inspection, so I knew-- in great detail-- that I was buying a very cute 1933 house with problems (AKA an adorable, old dump).
Did the city commission a "home inspection" on the Vista Sierra Apartments? If they did, why the heck did they buy it? Really, this sounds like a sweetheart deal for the original developer.
"The [Metropolitan Housing] corporation is almost entirely government dependent, from subsidized rents to federal and local grants, including two recent city grants totaling $133,000. And it's the city - which boarded the windows and helped residents move [emphasis added] - that will probably ride to the rescue to clean up this mess one day. The city is broke, but it's HUD's preferred buyer," the Star reports.
Maybe I'm a dunce, but if the city owns this dump, how can the city be the preferred buyer? This sounds like a scam to me.
This article says that Metropolitan Housing Corp. defaulted on the mortgage for this property, but it also says the apartments are "almost entirely government dependent."
"'We don't have a pot of funds ready to buy this property, so that's clearly a challenge,' said Albert Elias, Tucson's housing and community development director. 'I think the only way that this could work is if we worked in partnership with some other (agencies),'" again quoting the Star.
So, why would we re-buy this dump that we shouldn't have purchased in the first place?
Again, I ask: "Who writes the real estate development contracts for the City of Tucson?"
Watch for more articles in this series...