Memo to next mayor: Leave the real estate game to the moguls
Today Miro Cernetig takes the opposite view to that expressed by Pete McMartin on Saturday. He does some sums to show what the City could be on the hook for, if the whole deal goes sideways and the City ends up with the land and the condos. And don’t forget that the City owned the land in the first place and has yet to be paid all of the agreed price for it.
This demonstrates a couple of things. First this story has more “legs” than the transit ticket fine handed to Gregor Robertson – which he has now paid. Secondly that the idea of balance in the newspaper buisness is not entirely dead, which given the generally bleak view I normally espouse here, especially about the canada.com/Canwest Global near monopoly here, almost amounts to an apology. Or maybe I can say that the Aspers do employ a few independent minded journalists and some of them now and again assert that effectively.
Cernetig says we have to do the math so I make it around $313 million that could be gone from the City’s property endowment fund, on that one deal. But since that fund does not pay for operating expenses, the taxpayers should not see a rise in the City’s take from them on that account. And given the current shaky state of the real estate market here, that fund was going to be clipped back a bit anyway. But the City has been in the “real estate game” for a long time, has done really well as prices soared, and should have been expecting that things would turn around – as they will again in the future. Because one thing all of us property owners know is that you should not get into it for the short term, and not just as a way of making some quick profits. Those are the people who are taking a bath right now but most seem to be holding and not folding. Becuase though demand has dropped off a cliff, prices are still holding up, which means that people who have property are not yet ready to “downgrade the selling price … in a recessionary market”. Which is a very prolix way to say “take the loss”.