The city of Racine is finalizing the purchase of two buildings and some land adjacent to the site of the anticipated Metra depot. Many on the JT web site are appluading the action. Not me.
First, the city is overpaying (more than assessed value) for property that will only increase in value if the Metra does come to Racine. So the city of Racine is engaging in risky real estate speculation with our money.
Also, the city of Racine has a recent history of failure when delving into real estate. For example, they have shelled out large amounts of our money to tear down businesses in West Racine, in the hopes of luring a developer to the area. At present, they have failed to do so. Developers know that the city has deep pockets, so they will ask for tax credits, a reduced purchase price, and anything else they can squeeze out of the city. The city recently took a building next to mine in downtown Racine. After losing a court dispute, they had to fork over more cash to the former owner. They then sold the property at a big loss to someone else. The building remains vacant.
Granted these are anacdotal examples of mismanaged real estate ventures, but why should anyone assume that city officials will be better at real estate speculation than the people who do this for a living? The reason why the city, any city, will more likely lose money in these deals is because they are playing with money that doesn't belong to them. It is easy to take risks when others suffer the consequences of your mistakes. Additionally, there is an upside that is visible, while the downside is a largely invisible number on a sheet of paper. Thus the mistakes made by our amature real estate speculators will not become widely known to the public.
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1 comment:
Gee, so the city is run much like our schools? Just when I thought that there was hope. :(
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