Bazan: Is Houston City Hall haunted by ghost of Lee P. Brown?

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This is another of our occasional series of guest posts/essays on local topics of interest to us and our readers. Feel free to submit topical posts/essays for our consideration to As with our usual blog posts, the views expressed are those of the author.


by Tom Bazan

With regard to the plan being floated to “privatize” certain city facilties: Thank God that the US Congress outlawed the “Defeased Lease” scams in 2005 which were the lump-sum cash vehicles many governmental agencies such as METRO and the City of Chicago exploited to abuse taxpayers! You know that’s what the Ruling Class wants to do again if they could.

Recalling the huge give-a-ways of taxpayer assets, it’s as if the ghost of Lee P. Brown haunts city hall. Taxpayers must ask “Is the 1.8 million square foot, $270 million facility only worth ten cents per square foot per month?”

Mayor Brown, and his brain trust, Jordy Tollett, dumped valuable city-owned assets such as the Compaq Center (f/k/a The Summit), while at the same time acquiring a herd of “white elephants” with taxpayers funds.

One shudders to recall the fiscal nightmare of the Brown administration, which blew through the billions of property and sales tax as well as fines, penalties and fees. Seemingly, that enormous spending was not near enough; they also added over SEVEN BILLION ($7,000,000.00) dollars in crushing bond debt. Mayor Brown, when not out-of-town, gave us the underperforming Convention Center Hotel, the City Emergency Center, the unsafe and unreliable boondoggle urban rail, and he Super-Sized an existing “White Elephant” by expanding the George R. Brown Convention Center.

Now, Houstonians are presented the specter of the #1 Texas Progressive politician spinning off one of the largest remaining city-owned assets, a proposed scheme that is truly unsettling. Is this Rice U graduate succumbing to the same illogical decisions as that of the former Mayor and renowned Rice U professor, Lee. P. Brown?

This proposed scheme may be worse than the Compaq debacle. In the Compaq scheme, the city took an up-front lease payment of about $11.87 million from a church, on terms that seemed contrary to the best interests of the taxpayer. Several years later, when the city was scrounging around for cash, it sold the property to the church for $7.5 million, less than the appraised value. What seems galling: had not the sweetheart lease terms restricted the value of the 606,000 square foot facility, nestled in the Greenway Plaza on a prime 6.945-acre site, the appraised value likely would have been much higher. The total net to the taxpayer was about $19.37 million for the whole kit and caboodle. Here is a copy of that appraisal (pdf).

The taxpayers suffered the disposal of a huge city asset for less than the appraised value of the land! Rubbing salt into the wound, the church won’t be paying any property taxes on this valuable land and building, which is another significant revenue loss to the schools, county, and city totaling well over $1 million every year!

How could a bureaucrat deal be any worse? Try to ignore the reported Bayport debacle, and focus for the moment on the current proposal.

The Houston First scheme doesn’t sound feasible. The Convention Center Hotel never has come close to realizing the “Feasibility” numbers generated by PKF (taxpayers paid $102K for the optimistic document yet the city ignored a request to actually order an appraisal).

Where’s the beef? Where will the start-up cash come from? Is the new venture going to tap the TIRZ and or float even more tax revenue bonds?

The GRB should never have been expanded, and the Convention Center Hotel should only have been built if it would have been profitable to do so. No one cares to hear the snarky “Conservatives tried to warn the public back then” remark.

We should not allow the current Progressive Mayor to merge these two hungry “white elephants” into a questionably-capitalized privatized corporation mischievously named “Houston First.” The lease is priced at ten cents per square foot per month; is that all that this humongous, $270 million facility is worth to the Ruling Class? There is but one word to describe those buying into the scheme…


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Tom Bazan has a degree in real-estate valuation, has been a TREC licensed broker in Texas for over two decades, and has previously been licensed in Alaska, California, and Michigan. He is a property tax arbitrator, a real estate instructor, and is AQB-certified to teach appraisers the USPAP. He is one of a select group of experienced commercial real-estate appraisers who has been hired often by the City of Houston to appraise real property for the City of Houston as well as the Houston Airport system.

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