Another smelly city land deal

Some of the 13-acre, city-owned parcel at the corner of Decatur Boulevard and Vegas Drive was purchased back in 2004, when Michael McDonald was still serving on the City Council.

Two recent appraisals valued the land at $9.2 million and $9.6 million.

Mr. McDonald, the former police officer who left office in 2003 following a string of ethics controversies, now wants to acquire that land so his development firm, Alpha Omega Strategies, can build 600 apartments for low-income senior citizens with a loan backed by the federal government.

Mr. McDonald originally offered to pay $8 million for the land back in 2004. But a week ago, the current City Council voted to sell him the land for $6.5 million -- about $3 million less than what it's worth.

Is that because no one else has expressed any interest in buying the land -- for senior citizen housing or anything else? -- Councilman Steve Wolfson asked Scott Adams, director of the city's Office of Business Development.

Mr. Adams admitted city staff had no idea whether anyone else might be willing to pay more to develop the land for that or any other use. They never issued any public request for bids.

Making the deal last Wednesday, Mayor Oscar Goodman admitted, "Only an idiot would say this transaction would not be looked at closely."

There's an understatement.

Mayor Goodman and the other members of the council said they made the deal because there's an urgent need for "affordable" housing for the elderly. But government subsidy schemes don't have the greatest track record for producing attractive, livable domiciles.

If the city wants to do something to help lower rents, it should contract for an economic analysis, by a reputable consultant with free-market leanings, of the impacts of its own zoning codes and tax, licensing and "code enforcement" policies on living costs for poor people, asking how those artificially imposed costs might be lowered while assuring the housing stock remains safe and healthful.

Meantime, while Mr. McDonald can hardly be blamed for taking the best deal he could get, Mayor Goodman and the other members of the City Council should be ashamed.

Mr. McDonald claims he "can pass a lot of those savings" from his lower land costs "on to the seniors." Maybe. But other would-be developers would surely have opened the complex with even lower rents had the city offered them the land for $4 million, or $2 million, or for free. Who decided a 30 percent discount was "just right"?

Will ownership of this property -- and the future profits from any re-sale -- revert to the city if it's eventually used for some other purpose than housing penurious oldsters?

Not likely.

Bolstering the notion that the deals downtown go to those who "know the right folks," this deal stinks. Waiting 60 days to go out for bids and see if anyone would offer a better deal would hardly have delayed this project unreasonably.

The City Council should have done just that, rather than passing this deed to one of the good ol' boys with a wink and a nudge.

Who bought the cigars?