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I’ve had a worry for a few days about the city’s plan to sell some of its real estate as a way to raise money for the short term.
Mayor Jerry Sanders has said he plans to work with brokers on the sale. In other words, rather than having a public auction, the Sanders administration would hire real estate agents to represent the properties and try to get the best deal for the city.
But I was worried: It seems that local and federal government agencies are interested in buying a few of the properties. For instance, the Centre City Development Corp. is thinking about purchasing the World Trade Center. And the U.S. Border Patrol is interested in purchasing a city-owned property right on the border (the Border Patrol currently rents it).
So would a broker really get into the middle of a deal between governments and pull out a fat commission?
After all, the World Trade Center is appraised at $18.1 million. If a broker charged the city a, let’s say, 5 percent commission to sell it, the broker would walk away with $905,000. If the property was sold to CCDC, that’d basically be like the city selling a piece of property to itself. CCDC is little more than a city department in charge of redeveloping downtown.
Would a broker really get such a fat commission for doing little more than facilitating an interdepartmental exchange of assets?
Probably not, I’m told.
Jim Barwick, the director of the city’s Real Estate Assets Department, said the city would likely not use a broker to facilitate a sale of property to another government agency.
“Most likely, anything sold to a government agency would be a direct sale, meaning only the two parties to the sale would be involved in the transaction,” Barwick said. “If we determined we can sell the property ourselves for the value fixed by an appraisal, we would never bring a broker into the transaction.”
But, he cautioned that nothing has been decided yet and a possibility still exists that the city might use a broker to sell properties.
This is something to keep an eye on. If a broker were to get in on some kind of deal between the city and CCDC to transfer property, it would be a nice helping of gravy for the broker but a big waste of money for the city.