Pig in a poke
A while back an alert reader pointed me to the Portland City Council's then-impending "emergency" action to spend $1 million of scarce parks acquisition money to chip in with the Portland Development Commission as they rushed to buy the Public Storage property in the SoWhat district for future use as a public park. (I believe this is the property in question on a map -- and here's the Google satellite image.) With all the capital needs our parks have these days, this seemed like foolishness to me, but then again, the whole SoWhat development seems the ultimate in foolishness, so it's not a huge surprise.
I blogged about it, and Commissioner Saltzman's office (in charge of parks) got all huffy and defensive, but the resolution apparently sailed through the council, 4-0, despite a cautionary speech by Saltzman's upcoming challenger, Amanda Fritz, who knows a thing or two about parks.
The same reader who threw the light of day on the rush-rush money resolution keeps whispering sweet nothings in my ear. Now he or she's asking me how the city and the PDC can justify the price that they're paying for the property, in light of the fact that by the PDC's own admission, the property is environmentally contaminated.
According to news accounts, the purchase price of the property is $7 million -- $1 million up front out of parks money, another $800,000 out of future parks funds, and the other $5.2 million paid by the PDC (which has a $200,000 EPA grant to abate some of the hazardous materials on the site). Our reader asks whether the price was lowered appropriately to reflect the environmental problems.
Indeed, how was the price arrived at? The buildings are going to be knocked down; all that the taxpayers get for $7 million is the land (burdened by demolition and cleanup costs). It's 2.1 acres. And so that works out to $3.33 million per acre for contaminated land, in Portland, Oregon, with buildings on it that are going to be razed, at additional public expense, ASAP. "It's a good deal, and we should be celebrating this acquisition," said Saltzman. This despite the fact that the property is on the county rolls at the following values:
Market Value Year: 2004
Market Land Value: $ 1,446,920
Market Improvement Value: $ 3,134,330
Total Market Value: $ 4,581,250
Land Use: MOORAGE ACCOUNTS; Zoning: CXD
Assessment Year: 2004
Total Assessed Value: $ 2,229,790
The total market value on the county tax records in the years 2001-2003 appears to have been $4,674,750.
According to the county, the seller is a Glendale, California-based company called PS Partners VII Ltd. PS Partners appears to be affiliated with the large, publicly traded personal storage empire known as Public Storage. On that company's latest quarterly report filed with the SEC, it reports that it will book a $5 million profit on the Portland property (see page 13). Apparently, part of the "emergency" was that Public Storage had told its investors back in August that it expected to get its money by September 30.
The $7 million contaminated park block -- $3.3 million an acre. I can hear the boys down in Glendale laughing, all the way up here.