This Tuesday, when the second reading of the City of Brownsville's proposed $13.06 million Certificates of Obligation comes up for approval of the city commission, there will be several large amounts listed on the issue that are raising eyebrows of local real estate brokers.
Foremost among these is the $2.3 million tabbed for the purchase of the Casa del Nylon on 1304 E. Madison and the adjoining building and property next door at 655 E. 14th Street. The $3.2 million price tag for the 52,586 square feet listed on the CO issue amounts to about $44 a foot, an extravagant amount given real estate prices in the surrounding neighborhood.
Compare that, for example, the $70,000 being offered the Brownsville Independent School District for the old GED building on Madison. Given the downturn in the real-estate values and lack of movement for downtown properties, the amount came as a surprise to local real estate brokers.
"Are they crazy?" asked an incredulous real estate broker when told of the price that the city had agreed to pay for the property. "Not even the properties along the (77-83) Expressway are worth that much. If you look at the appraisal values of neighboring properties I can guarantee you that not one of them comes close to that price."
Even more suspicious is the fact that the negotiator for the seller (Abraham Galonsky) was none other than Horacio Barrera, the mayor of the city of Brownsville. Some city commission members indicated they had no idea of Barrera's involvement in the deal and suggested that there are things being done behind the scenes of which they have been left out.
"For the record: I did not know that Abraham Galonsky was represented by Horacio Barrera," he wrote. "The only reason I voted for the acquisition of the property was because of the location and its proximity to the Multimodal BUS Facility and the fact that in the future Galonsky would probably ask for more than what he is right now. "There are many things going on in this city that had not happened in a very long time," Longoria complained. "Many dealings are going on behind closed doors, contracts are being signed by an elected official without the consent of the City Commission or City Manager," he wrote in response to a local blog.
There are even more suspect items in the CO issue to be considered Tuesday.
Unable to purchase the property next to the city-owned Cueto Building, it agreed to pay $2,500 a month over the next three years, or $90,000 in 36 months. After that, if the seller agrees to sell, he might settle for the appraised value, and pocket the $90,000 which would have the city in effect paying him $90,000 over the appraised value, a sort of subterfuge to get around the law that requires the city to pay only fair market value.In fact, in the last two years under Martinez, the city has gone on a real-estate buying binge totalling some $3.24 million. Martinez has stated in the past that he planned to entice local property owners to sell the city the and as part of a package convince the University System to remain in the downtown area after the UTB-TSC separation. How credible that assumption is is anyone's guess.
But with the UT System's announcement that it was combining its operations with the administration headquarters, that assumption may be mistaken.
Nonetheless, the binge continues. Now, as the decision is to be made by the rest of the city commission on the issuance of the new certificates of obligation, will they follow the direction established by Martinez, or insist that their viewpoints also be taken into consideration?
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