Thursday, June 08, 2006

Hoboken Garage Flip

Just an update on a story posted a few weeks ago on the Hoboken garage deal on the verge of backfiring. Apparently, even local government thinks that they can flip properties for huge profits..

From the Jersey Journal:
Hoboken's finance tricks backfire

If the past decade of real estate sales is any indication, what hotter place is there than Hoboken to acquire property and then develop it for a small fortune?

This must have been on the minds of city officials when they decided to buy the garage back from the Hudson County Improvement Authority and then sell it to a developer at a substantial profit to fill a $5 million budget shortfall in the 2006 municipal budget.

City officials said they expected bids of about $30 million for the new redevelopment zone approved in March. Those hopes were seriously dashed when the property attracted only two underwhelming bids. Of interest to some political watchers were the identities of the bidders.

A group calling themselves Metro-Ran Garage Stop LLC offered $22.1 million as a bid. This is a partnership consisting of former city Councilman Robert Ranieri Jr., New York-based developer Dean Geibel, who is familiar to Sixth Street Embankment advocates in Jersey City, who see Geibel as thwarting their open-space hopes, and Louis Picardo, who is Hoboken's tax collector.

Unfortunately, or fortunately if you are the high bidder, Hoboken needs to come up with $5 million by June 30, the last day of the fiscal year, or the city will have to refinance the debt with the county at a much higher rate.

Development groups made up of politicians? Reeks of corruption to me...

Caveat Emptor,


Anonymous Anonymous said...

Corruption in Hoboken municipal politics? Never.

6/08/2006 09:38:00 AM  
Blogger chicagofinance said...

I love the financing deal from a few yers ago. They refi'ed with a HIGHER interest rate that was above market. In exchange the bank gave them cash, but the face amount of debt didn't change. It made the City's balance sheet look better, by increasing net assets, but it was smoke and mirrors at its Hudson County finest.

6/08/2006 09:45:00 AM  
Anonymous Anonymous said...

A Bit off the topic here.

I change my train everyday at Hoboken station.

Yesterday for the first time I saw realtors handing out Condo advertisments in the evening rush hour at Hoboken station.

Most of them "Prices Reduced !!"

Realtors are DESPERATE !!

6/08/2006 12:14:00 PM  
Blogger chicagofinance said...

a bunch of us have been following this one....

6/08/2006 01:18:00 PM  
Anonymous Anonymous said...

Yes, I have been watching that one too. I believe it started at $505k in January, now down to $479k. A couple of weeks ago they said it was the final offer, if they didn't sell that weekend, they were going to rent. I see the same ad on today's Craigs List.

6/08/2006 10:29:00 PM  

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