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,
Grim