Eye On Modesto

Thoughts and observations about Modesto and Stanislaus County

An email sent to the Modesto City Council

By D. Minighini

I would like to express my public comment (via email) as I am not able to personally attend tonight’s meeting.  I would
English: Author: Carl Skaggs This image was ta...

like this comment to be part of the formal record:

Of great concern is the deception of this City as it oftentimes conducts its business – important land development sales involving overpayment of millions of dollars (exceeding market value….see overpayment of Archway Commons low income housing units with same Centerra Capital) as recently informing the public and featured in “The Bee” newwpaper.  And of newest concern, negotiations with the Courthouse land deal involving Centerra Capital have apparently been going on behind closed doors without the public’s input or comment via public meeting!  Such an important and major public property acquistion should reasonably support “public involvement”before the land purchase is finalized.
Of additional concern is the business players the City chooses to engage with.  Land deals appear to involve the same consultants and developers who make millions of dollars in excess of what should be a fair and reasonable profit.  Why is this happening?
Per the Modesto Bee article in today’s paper, Centerra Capital has already been involved with negotiations to sell this land to the City for this courthouse land deal!  And tonight the City is supposed to, “after the fact”, going to publically approve Centerra Capital “to help the city in negotiations with the landowners.”  In real estate law, representing both buyer and seller is known as “dual agency.”  Every real estate professional knows there is no such “impartiality” possible with dual agency.
The public’s interest (as the ultimate benefactor buyer) would be best served in this land deal-  with its own separate real estate agent – not with Centerra Capital who gains to receive commission fees from both buyer and seller and who will compromise the interests of each to get the deal done.
The City has conducted the public’s business negliently like this before.  In addition to a poorly constructed land purchase with the low income Archway Commons in which millions of dollars were overspent by the City in the land purchase and construction costs, other backdoor city actions included one of the the city attorneys having filed a lawsuit –  even before she received City Council approval to do so!
It is becoming very clear from the public’s view of what kind of business ethics does our City government really have and are their decisions in the best interests of the public?  Have they repeatedly shown a lack of understanding of economic principles and financial mismanagement?
The Courthouse land purchase should not mirror the real estate purchase incompetency and negligent financial mismanagement which is on record in the “Archway Commons” low income housing units land purchase (which also involves excessive development “per unit” costs).
City government should NOT pay more than “market value” for any property, and individuals with such power to purchase land and make these decisions  have a responsibility and due diligence (to the public) as a “buyer” in such transaction to perform all “inspections” before ratifying the real estate deal – to make sure the condition of the property and land is in proper condition and financially worth it, and that the public’s money is properly and wisely spent.
Paying excessively above “market value” constitutes “financial blackmail” by the seller.  A city government that agrees to pay well over market value is one that is NOT protecting and wisely spending the public’s money.  If the Courthouse acquisition turns into the same purchase situation as the Archway Commons –  the City and its representatives should abandon its buyer position and seek another property more reasonably priced.
The real estate principle that “property can be purchased for what a buyer is willing to pay” does not apply to government purchases in a time of economic depression, a city government which is not financially strong, and is an example of negligent financial management.
A government’s duty in use of the public’s money for purchase of land for development should be prudent, reasonable, and financially conservative so as NOT to misspend or extravagently misuse public funds, which would ultimately negatively impact a city to operate, or negatively impact its reserves which could lead to financial inability to operate with basic services.  The City has put the residents in this position already from several past incidents of financial mismanagement with overspending on contracts and services and land deals.  Such decisions have brought forth the need of a 1% sales tax increase (ballot initiative) to be forced upon residents.  The sales tax deception to residents started out saying it was for additonal police and fire safety, when in fact there are no guarantees of additional officers, and the money can be spent on whatever the City decides to spend it on:  more mismanagement.
D. Minighini
Concerned Modesto citizen
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