From the Arizona Daily Star:
A Scottsdale shopping mall developer filed a $112 million claim against Tucson for breach of contract after the city tried to sell nearby land for commercial development, despite restrictions against it.
COMMENTARY: What the Star does not do is put this story in its broader context.
The news that Barclay Group is claiming $112 million in damages is just another example of how spectacularly the City of Tucson has failed to grasp a document called a “development agreement”.
Tucson has been playing at being a real estate developer for years…mostly via Rio Nuevo…but not exclusively so.
What the City has tried to do is promote whatever ideal development its staff believes is good for the city by making special deals with land developers.
Sometimes these deal involve selling land the City owned…such as the Thrifty block on Congress downtown….for $1 so a development would have a head start. That deal resulted in an empty lot.
Often the land owned by the City is significantly discounted like the deal for the Mercado on the west side of the Santa Cruz River at Congress.
Or the deal involves giving a developer a break on development costs like the retail project at Irvington and I-19.
Pile all the development agreements up that Tucson has engaged in for the last 10 years and what you have is probably one of the worst records of any American city in real estate development.
If a private company had done as many of these stupid bad deals, the managers would have all been fired.
I would guess if you polled the top 10 real estate development lawyers in the state (anonymously) …you would find everyone agrees Tucson is terminally stupid.
First off Tucson is a bunch of babes in the wood when it comes to understanding what one can or should get away with.
Barclay should never have gotten an agreement from Tucson putting a covenant restricting development on City owned land north of Irvington. For Tucson to have agreed to that…when it was giving away all sorts of free infrastructure to Barclay….borders on criminal negligence.
Then on top of this to try and sell the land for a Sam’s Club without having disclosed the covenant….this is malpractice straight out.
How does a city government piss away $230 million in Rio Nuevo? It starts with the belief that the gang at 250 West Alameda are some kind of real estate development geniuses.
Over and over they have proven to be screamingly incompetent.
But you don’t see the city council firing the city manager nor do you see the city manager firing anyone and everyone that has gotten Tucson’s body part in the wringer on its failed real estate scams.
Why is that?
I think the answer is simple…the garden variety Tucson city council member (expect Steve Kozachik) has no clue about how real estate development works.
They cannot tell the difference between a really competent real estate development attorney (presumably the ones who represented all the real estate developments who have screwed Tucson) versus their own grossly incompetent staff.
At this point serious change is needed at Tucson City Hall….a wholesale shift of council majority away from the Democrats who have run the show into ther ground.
A new council majority will result in firing the current city manager and really fumigating City Hall to get rid of all the incompent line staff that have run Tucson into the ground over and over again pretending to be developers.