Item 7E regards taking a vote to approve the purchase of 4.25 acres on Schrade Road to construct a radio tower. It's a big tower. It accommodates several cities in our midst. Now, the very astute readers of this blog will say that we have already bought the land, and the construction of the radio tower is well on it's way with construction. Well, they would be kinda right......but only kinda. Yes, a site was purchased for the tower. And, yes, construction is underway. However, construction is underway on the wrong site. That's a little embarrassing. This is kinda a reverse story of the house demolishing company tearing down the wrong house. Item 7E approves paying approximately $480,000 for purchasing the lot next door from the City's lot. You know, the lot with all the construction on it. The 4.25 acres that the city now owns will be used for something else. It becomes an asset on the City's balance sheet. I feel sure that's not exactly what the city had in mind.
Now some poor person is going to become the fall guy. Somebody will get the blame. But let me tell you, this is the fault of many. There are many places where this fault should have been caught.
Who negotiated the contract and didn't ask for a survey? The survey was waived by both seller and buyer. Not very smart. In defense, someone wrote in the City Council Summary that, "There are no buildings or improvements on either lot and no geographical features that would enable ready distinction between the lots. Both lots have the same street address." Folks, that's why you get a survey prior to closing. In addition, if you can read a tape, you go to the site, find a surveyor's stake and tape off some distances. It is a little bit of a pain in the butt, but it ain't hard.
I have built several structures myself. I never set the batter boards myself. I always have the surveyor or a civil engineer set my corners. That way I know all my setbacks are okay and that I'm on the right lot. If a mistake is made, I have the engineer's or surveyor's Errors and Omissions insurance to file a claim against. So, who set the corners? Our engineers? The contractor's enginers?" Whoever it was should have caught the error. Apparently, they just found a spot in an open field and started building.
But, it's really the culture that is at fault. It will sound like I'm ridiculing the City Council or Staff. Well, I know City Council is not going to determine where the corners of the tower are going to go. They're going to rely on staff. Did our City Attorney approve the contract that the mayor signed? Did he approve the waiving of the survey? Did the mayor's lender on his house allow him to close on his house loan without a survey.......anybody on City Council? The Rowlett Fire Marshall is making the presentation and admitting to the mistake on Tuesday night. Was it his job to document the correct lot? Is that in his job description? If someone told him that the wrong lot was the right lot, I'll bet he believed them. It would be easy for him to believe whoever told him where the lot was knew what they were talking about. Oops. Apparently, they didn't.
Who else should have known. Planning and Development? After all, something was being developed. They seem to have their fingers into everything, anyway.
The point I'm trying to make is that the City of Rowlett does not have a culture of real estate development. A developer would. A real estate lender would. A city would not. A city would be more at home running a city, not developing property. Development is not in their culture.......not the skills and disciplines at the itsy bitsy level. However, even a miscue at this level can cost lots of money.
I noticed some other things. I noticed that a survey was once again waived. Of course, this becomes less of a problem, since the city would own all the vacant land between a church and a house. That makes it much easier to get on the right land. Also, I noticed the Rights of Parties in Possession were waived. What if someone signed a lease for this land sometime beyond the knowledge of the current owners? The holders of any lease would survive the contract of sale and would become someone else to contend with. Also, I didn't notice any preliminary title report. What if a contractor did some work for the owner and felt he was not properly compensated? Then, he filed a lien against the property. That lien would survive the contract and would become payable by the new owners. I also noticed the seller was conveying the property with a Special Warranty Deed, not a General Warranty Deed. That makes a difference on who is accountable if a defective title is conveyed.
All the above "nit picky" stuff can cost a whole bunch of money if ignored. This appropriate culture is the world of Title Companies, Real Estate lawyers, developers, and Real Estate Lenders!!
I emphasize Real Estate Lenders, because all the above is definitely in their culture. Real Estate lenders don't pretend to manage Cities. That's someone else's job. I like to tell this story. One of my very best friends was a lawyer. One of the best. Very smart. Very Intelligent. However, as smart as he was, I would never let him take my appendix out. He wasn't trained in that stuff. Our City Council and Staff are pretty smart. I certainly disagree with some things they do, but they are pretty smart. Just because you're smart doesn't mean all your decisions are correct. My very smart lawyer friend would probably start his appendectomy incision in the wrong place.
Some of our elected officials and staff think they know how to run a real estate lending business. They don't. In fact, they don't have a clue. I cite the above as how elementary disciplines are unknown to them. Can you imagine the disaster of such culture as the City of Rowlett, trying to underwrite a $20 million apartment loan or making loans to 200-300 people wanting a mortgage for a house?
If you are a regular reader, you know I have been promoting hard the formation of a Housing Financing Corporation. It is needed to finance good acceptable housing for Seniors and Workforce populations. Read thru some past blogs if you need more info.
I think I have detected that some in Staff and at least one on Council are positioning themselves to set on the Board of any HFC. I am absolutely opposed to that.
I don't want politics even remotely close to running the business of real estate lending. We need the city's permission to form the HFC.........then they need to get out of the way. The experts will say the same thing.
Real estate lenders require surveys. Apparently, cities don't. It is too expensive to allow our "officialdom" to learn the business of real estate lending via "on the job training" (OJT to you military guys).