“Million Dollar Properties, $1 Deals” was the headline on Patrick Madden’s great WAMU report on apparent sweetheart deals that DC property developers sometimes get when they want to build on city owned land. Julie Patel’s followup was a little less snappy, but “Empty Promises: Developers Often Don’t Deliver” also delivers the goods. These deals often offer sweet discounts on land to property developers in exchange for developers making specific commitments to achieve municipal goals, but real estate development is a highly risky and uncertain industry and often the promises aren’t met in a timely manner.
The always-upbeat David Alpert is correct to respond that things aren’t necessarily all that bad. For example, when the developers of the project at the former Hines School received $44 million worth of land for the low price of $22 million, they also agreed to offer 20 percent of the new housing units at subsidized rates and to build a new plaza on C Street. The city accepted less money for more amenities.
And good for them. But really all this does is highlight the great virtue of simply selling things to the highest bidder.
After all, accepting less money for more amenities could be a good idea. But it also could be a boondoggle. As a citizen, it’s extremely hard for me to tell. What’s more, all citizens can agree that $100,000 is worth $100,000 while our estimates of the value of a plaza or a new library may vary. The right way to handle these things would be to sell the land for the highest possible price, and then have the city directly spend on programs elected officials think are valuable. That’s a much more transparent process in which it would be obvious whether someone was giving a donor a sweetheart deal or not, and in which the value of a new plaza can be easily compared to other uses of funds.