Letters: Reckless spending by council

EDITOR,
Given current commercial real estate market conditions, the City Council’s Suburban Propane property purchase raises red flags. What was the City Council’s justification for the $1,900,000 price for this parcel?
Vice Mayor Dene Bustichi commented that real estate values haven’t changed much since the May 2008 appraisal. Mr. Bustichi and council majority are wrong.
The nearly 2-year-old appraisal provided as justification represents values near the peak of the commercial real estate market, as calculated by the MIT Center for Real Estate. And, according to the Jan. 13 Federal Reserve report for the 12th District encompassing California, “demand for commercial real estate continued to deteriorate.”
In the midst of the most severe real estate depression in decades, property values are off by more than 30 percent — and commercial property is off even more. A 30 percent discount from the appraisal would have saved taxpayers more than $622,500. Combined with the $600,000 move subsidy, the city effectively paid 20 percent more than the appraised property value at the peak of the commercial real estate market! A good deal is one that is good for both parties.
This transaction sets bad precedent. A deal for the Amerigas property has yet to be negotiated. Recent transactions by this City Council have set arbitrarily high prices, far in excess of currently appraised values for commercial property. Also, the City Council has yet to negotiate the purchase of a large City of Santa Cruz–owned parcel. How will the city fund this purchase?
The City Council is spending taxpayer money recklessly and needlessly. The same objectives could be accomplished with fair prices. Lessons should be learned from city history of two decades ago, with the Borland site. We had hoped for more transparency by this City Council in 2010, not backdated real estate transactions.