City department sells unusable parcel to cut losses

December 5, 2011
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The business adage that it’s better to cut a loss than to throw good money after bad came into play last week at City Hall.

The city’s Parking Services Department decided to sell one of two small parcels it had purchased for its lot in the West Fulton Business District last year, despite having to take a bath on the sale. The reason for the purchase was to provide space for a communications tower that was initially planned to be part of the citywide WiMax wireless Internet provider system that Clearwire was building at the time.

But after Parking Services purchased the parcels along West Fulton near Straight Avenue NW, Clearwire decided the tower wasn’t needed. The department didn’t reveal how much it spent on the parcel it is selling, but the two properties cost $55,000. Both are vacant.

The city is selling the 25-by-46-foot parcel at the north edge of the lot to a nearby resident who bid $500 for it. “He was the only one interested in it,” said Kara Wood, city economic development director. “We didn’t have an appraisal done on it.”

Although the offer is below the city’s minimum-price provision, Parking Services wants to sell the parcel because the department said it’s legally inaccessible to anyone except the homeowners who live directly north of the lot. The department also said the property is unbuildable, it doesn’t have a use for the site, and getting rid of it would cut its ongoing maintenance cost and end its liability issues with the property. Commissioners approved the transaction last week.

The department still owns the other parcel, a vacant corner piece adjacent to the lot, and had planned to use that space to expand the lot. The expansion project, which was estimated at costing $103,300, was to have been paid for by the revenue Parking Services would receive from the lease payments made by Clearwire, estimated at between $60,000 and $80,000 a year. The Clearwire 4G system was unveiled in August 2010.

In another transaction last week, commissioners agreed to buy a strip of land that contains a railroad track used by Padnos Iron and Metal from the estate of James Converse. They then designated the site as a public right-of-way for the reconstruction of Lexington Avenue NW and the improvement of Seward Avenue NW, which is being extended south to Butterworth Street SW. Although the property was appraised at $20,000, the city bought it from the estate for $10,000.

The transaction now goes back to probate court for its consideration. If the court approves the deal, the city will take ownership of the property. The Economic Development Office will manage the property.

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