Friday, April 6, 2007
A sweetheart deal in the making
Houston TX - At taxpayer expense, the Houston Metropolitan Transit Authority (Metro) is spending $7.2 million of taxpayer dollars to buy 2 blocks of land along it's light rail line according to the Houston Chronicle. This land was bought from a developer and will be sold back to the same developer at the same price at a later date.
In short what is happening is that the Metro is holding land, tax free, for a developer that just isn't ready to start building anything yet. The purchase of the property back by the developer will be for the same price and literally amounts to a tax break of millions of dollars to the developer as well as a free loan of taxpayer dollars. The developer will also earn interest on the $7.2 million received from the Metro. Metro will make absolutely no profit from this transaction and millions in lost real estate tax revenue will have to be made up for by the taxpayer.
These types of shady transactions are all too commonplace when it comes to development associated with a transit project. They are never mentioned by the pro-rail crowd either since it makes one question the true cost of having rail. Usually the city does these shady deals but now we're seeing the transit systems themselves getting involved directly.
Transit systems should not be involved in this type of activity. This is not what they were set up to do. It is a waste of taxpayer money that should be stopped immediately. Cities should not be involved in these deals either but I'll save that rant for another day.
This story shows well how public transit systems have lost their focus on what they should be doing, moving people from point A to point B. Millions of tax dollars are spent each year by Metro just to have a real estate department. And guess what, the money to staff and run the office comes out of operating funds.
As I have said many times before, the management in the public transit industry is on a mission to find new ways to spend the taxpayer's money on anything and everything except providing good service and Houston's Metro is proving my theory is factual. As a reward for proving my theory as a fact, the Houston Metropolitan Transit Authority earns itself a well deserved Lance.