Former Monroe councilman Chad Minnick tells an insider's tale of how Monroe Mayor Donnetta Walser has cost the city taxpayers hundreds of thousands of dollars, and perhaps a lot more, through "incompetent" planning.
This is an important question. Minnick served at least one term on the Monroe City Council. He was elected in 2003 (if not earlier), and defeated in 2007. The land was purchased in 2005, and the city council (on which Minnick was sitting at the time) would have had to approve the purchase.
Apparently, the city government wanted to make a profit from buying and selling the real estate. They borrowed $16.1 million, which is apparently a pretty large sum for a city the size of Monroe, to buy the land from Snohomish County in 2005.
The City of Monroe apparently entered into a purchase-sale agreement for a developer to buy the land for a shopping center. During the option period of the agreement, the City of Monroe will apparently incur $275,000 in interest charges. However, the developer will forfeit $425,000 in earnest money if they don't buy the land (and they are indicating that they likely will not buy the land).
Minnick says it was unwise for the City of Monroe to enter into the purchase-sale agreement with the developer, because of the $275,000 interest that has accrued (or will accrue) during the option period. I would tend to disagree, since the city will be more than adequately compensated by forfeiture of a larger sum of earnest money, if the sale falls through.
Posted by: Richard Pope on February 26, 2008 05:18 PMRichard, what do you care? You're a Democrat, after all. You seem to be saying that governments should not engage in that sort of business, but you can get thrown out of the Democratic Party for that sort of heresy.
Minnick says it was unwise for the City of Monroe to enter into the purchase-sale agreement with the developer, because of the $275,000 interest that has accrued (or will accrue) during the option period. I would tend to disagree, since the city will be more than adequately compensated by forfeiture of a larger sum of earnest money, if the sale falls through.
Yes, they COULD keep that earnest money (although they could also lose it, or pay out significant legal fees to keep it).
But that is beside the point: he is not saying they should not have tried to sell the land, but that they should have hedged their bets by subdividing it, so they could sell off smaller pieces if this deal fell through. They still have that option, of course, but it is a lengthy process, and interest will continue to accrue in the meantime.
So they could have potentially saved on hundreds of thousands in interest payments AND kept the earnest money.
Posted by: pudge on February 26, 2008 05:45 PMAnd I, as the poster of this entry, will feel free to delete said off-topic comment.
Use the public blog. Knock yourself out. Don't post off-topic comments here.
Posted by: pudge on February 26, 2008 06:25 PMGregoire's hiring of 6600 new state employees is eating up a whopping 145 Million
And she isn't through yet!
She eats through public funds faster than a pac man game!
Posted by: GS on February 26, 2008 07:26 PMNo way and no how should they be in the real estate development business. That goes for ports as well as school districts or even development districts.
These organizations usually end up with properties they are going to "lease" to venture capitalists or real estate developers (read contributors to the electeds campaigns and befefitters of cheap leases or land). The governments have the advantage of offering cheap financing to the developer, but still, the land is taken off the tax rolls.
Horrible, horrible system as corruption is rampant in the deals I have seen and analyzed.
Posted by: swatter on February 27, 2008 07:09 AMWhy not just delete my comment and then straighten me out offline?
Posted by: Bart Cannon on February 27, 2008 07:44 AMIt's easy to take pot-shots, Richard, but sometimes things are pretty simple (as in how terribly screwed up Monroe is today) and sometimes there is a lot more going on than it at first appears.
At the risk of inviting even more questions and criticism, I'll explain a bit of the background.
Here's the back story: the City had been developing their "North Kelsey" plan for quite a few years before I was elected. The plan called for a village green, an outdoor theater, and pretty much an urban park space surrounded by a commercial center. The City already owned half the property (and had for decades) and the County owned the other half.
The County's public works fund was the actual owner and they were waiting to sell until we finalized the plan and there was some degree of predictability for potential buyers.
The County Public Works planned to use the proceeds from the sale of the property to build a facility near Snohomish. At the time, they were in a temporary facility which was located on prime real estate that Snohomish needed for economic development. In other words, the quicker the County sold the Monroe property, the quicker the City of Snohomish could move forward with their own economic development plans.
Since the City of Monroe had this concept for an urban park, with a town center feel, it was a natural to purchase the land from the County and sell the entire project to a developer who could build our park, as well as their own shopping center.
The key to remember is this wasn't some "land investment" deal where the government tied up land from the private sector. This was one layer of government (the County) transferring ownership to another layer of government (the City). As far as the taxpayers were concerned it wasn't a big deal, as long as the Council and Mayor paid attention and made the right decisions.
The City quickly procurred a buyer and planning began immediately. Lowes purchased their portion for $10 million, effectively reducing the debt load by two-thirds. The other buyer recently fell through because of the ineptitude of the Mayor and a few Council members.
The situation is getting worse. The Council and Mayor seem to be spinning this to make it seem like less of a problem. http://www.chadminnick.com/main/?p=124
This is not really a philosophical question, it's always been a question of good management and wise decisions. You just can't count on liberals to provide either.
Posted by: Chad Minnick on February 27, 2008 05:56 PMIf the land isn't going to be used for municipal purposes (i.e. park, fire station), it should be in the private sector collecting taxes.
As seen here, government once again goes into the land development business and screws it up. They need to concentrate on what they do best- provide municipal services.
Posted by: swatter on February 28, 2008 06:33 AMThe private sector should do what it does, government should do what it does - when either does the work of the other they screw up.
That isn't liberal or conservative - and for Minnick to think it is shows a rather shallow world view.
Posted by: BA on February 28, 2008 11:22 AMThat isn't liberal or conservative ...
Yes, it is. Liberals are MUCH more likely to ask government to do things it shouldn't be doing.
Posted by: pudge on February 28, 2008 12:04 PMThe reason to purchase the land from the County was two-fold. First, to ensure the afformentioned urban park was constructed. Second, to get the land back into the private sector and developed, allowing the market to do what it does best.
The County was simply sitting on the property and was doing NOTHING with it. Neither was the City with theirs. The City of Monroe, prior to my election, had run completely out of land zoned commercial, except for these government-owned parcels. Our local economy was stagnant because our Council had refused to allow any commercial development to occur and was sitting on the most prime real estate in the community.
This was the primary argument of my campaign in 2003. I said we needed to get that land back into the private sector and functioning for our economy.
That's why I am so critical of our Mayor and current Council for mishandling the transaction the way they have. The property remains in the hands of a stagnant government rather than in the private sector where it belongs.
Posted by: Chad Minnick on February 28, 2008 12:06 PMI was referring to my good buddies Swatter and BA. They just stepped out a little bit into ground they didn't know anything about for a moment.
But it is understandable why folks would assume our North Kelsey project was a prime example of the government getting into areas it should not. I would probably think the same myself, except I am quite aware of the local backstory that most others are not privvy to.
Posted by: Chad Minnick on February 28, 2008 12:11 PMYour crude response is that you disagree.
So, you believe then that government should be in the business of real estate development? Really?
If so, do you have any good examples of where this has been done? Not in Monroe it would appear.
You are right about my knowledge of this particular circumstance - I only had the newspaper article and your blog post as information sources - neither of which provided much in the way of background.
Posted by: BA on February 28, 2008 05:22 PMThe entire property was on the government roles. I wanted to sell it and get it into the private sector so it could be used. They messed up the sale and that's the bottom line.
The purchase of the County's property by the City was a good move because it was a huge chunk of property right in the middle of our commericial zone that needed to be developed.
In addition to this, we have some great community plans for a village green, water features for the kids, a performing arts stage, a terraced amphitheater, etc. All that will be owned by the City. That's why the City wanted a developer who IS good at real estate to come in and develop the whole thing.
Are we clear? I want the property SOLD and back into the private sector.
Posted by: Chad Minnick on February 28, 2008 08:27 PMOh well, this isn't very interesting stuff to anyone outside Monroe...unless you care about the fact that our mayor is married to the Democrat candidate for Senate against Val Stevens.
Posted by: Chad Minnick on February 28, 2008 08:30 PMI don't know how, even with your best intentions, you continue to deny you were involved in a real estate development deal that went south. It always does whether it was the County or the City of Monroe or any other municipal corporation.
And no, I don't find it boring. I always get upset when I see government dabbling in this type of business.
Posted by: swatter on February 29, 2008 02:07 PMAnd, you definitely don't spend 16 million to buy more land around what you already have.
And it seems you and Minnick seem obsessed with arguing the notion Minnick didn't do anything wrong in the deal, and in fact, probably did his best to make a bad situation better.
You're preaching to the choir if that is what you are arguing. My point is and will continue to be- government shouldn't be in the land development or speculation business. Monroe was and is getting burned.
Monroe is not the only municipal corporation getting burned by bad land deals is another point I am making.
Posted by: swatter on February 29, 2008 03:25 PMWe're on the same page, good buddy.
Posted by: Chad Minnick on March 1, 2008 12:15 AMIt's clear to me that Dems are just using global climate as a propaganda tool to achieve their enviro-fascist/socialist ends, it's eye-poppingly clear to me.
The fascist left knows they don't have the truth on their side via Al Gore and the United Nations -- they know -- but not surprisingly, they don't care, nor would you expect any fascist or fascist movement to care about the truth. To the contrary, deception is how they win their power and control over people, by any means necessary.
--Independent, anti-scialist, pro-truth, free-thinker in Seattle
Posted by: David Wolbeck on March 2, 2008 03:00 AM
[I have now exceeded my USDA daily allowance of sarcasm. I'll have to wait until tomorrow to post again.]
Posted by: Chad Minnick on March 3, 2008 09:20 AM