By Gregory B. Hladky
1:10 PM EDT, June 19, 2013
Selling a city street to close a short-term municipal budget gap may seem like a strange idea. But how about a public zoo? Or a parking lot? Or maybe some taxpayer-owned art work, or park land, or a concert hall?
It’s happening folks, or is being talked about, here in Connecticut and all over this municipal-and-state-deficit-plagued nation of ours. And there are those who call these sorts of transactions foolish, morally wrong, and simply stupid.
New Haven just sold pieces of two city streets to Yale University for a tidy $3 million. The school had been leasing those parts of Wall and High Streets under a 20-year deal that cost Yale $1.1 million up front, and payments for fire service that ultimately totaled about $58 million. This sale, however, is total and forever.
The deal drew howls of protests, demonstrations and angry denunciations from local groups and some New Haven aldermen.
“Something that’s forever is priceless,” says Alderman (and mayoral wannabe) Justin Elicker. “You’re selling the public’s ability to travel those portions of the city.”
Another alderman who opposed the street sale was Douglas Hausladen. “This is a trend in government all over the country, and it needs to be looked at,” he argues.
The street sale’s defenders argued that it would help prevent more tax increases and that selling the streets to Yale would increase safety for the university’s students who use them the most. Alderwoman Dolores Colon, who represents that section of New Haven, insisted, “When those streets are sold, no one in [my] ward will miss them.”
This wasn’t the first time New Haven’s longtime mayor, John DeStefano, has offered public asset sales as a way to plug a municipal budget leaking red ink. In 2009, the city sold Yale a parking lot on Washington Avenue for more than $3 million, plus a 99-year lease on “Begonia Island” and “Market Island” in the downtown area.
In 2010, the city parking lot on Broadway was leased to Yale for 97 years, bringing $3 million in up-front cash to New Haven’s government (plus a “lucrative” $1 per year for the remaining 96).
The bottom line on cities and states selling off public assets is, well, the bottom line. It’s all about money, and the increasingly frantic search for it by governments facing growing oceans of red ink and federal aid cutbacks in a down economy.
“There is pressure to [sell off public assets] in bad budget times,” says state Senate Majority Leader Martin M. Looney, a New Haven Democrat, “when you’re desperate for an infusion of onetime revenue.”
“Sometimes it’s justified,” adds Looney, who happens to agree with the sale of those streets to Yale, “but I think it’s something that should be done awfully carefully.”
Chicago city officials have been hammered for selling off the rights to parking revenues — opponents of the move say that’s going to cost the city tens of millions of dollars in the long term. (New Haven did reject a similar plan a couple of years ago.)
The Michigan state Senate just passed a bill to prevent Detroit from selling off any of the masterpieces in the taxpayer-owned Detroit Institute of Arts in the event of bankruptcy. That state’s attorney general also chimed in with an opinion that the city’s art collection can’t be sold to pay off any debts.
Detroit’s emergency manager touched off a firestorm when he suggested he had to look at all Detroit’s assets for possible sale — including the institute’s artworks by Rodin, Matisse, Van Gogh and others. The Michigan state House is expected to give a final OK to the protective legislation soon.
(Detroit’s budget difficulty, by the way, has been estimated at $15 billion.)
In 2010, Newark’s budget deficit was so huge that the city sold 16 public buildings. Like the police and fire headquarters, and the taxpayer-owned Newark Symphony Hall.
There are other times when cities sell something big because they simply can’t afford to keep it up, or don’t want to.
Bridgeport unloaded its popular Beardsley Zoo back during the late-1990s. The deal included a purchase by a non-profit group backed with state funding for zoo operating expenses. The state’s annual tab for keeping up the zoo is something like $280,000.
Of course, governments are always selling off stuff they’ve gotten through foreclosures or as compensation for back taxes or which are simply surplus properties they once thought they needed and now no longer want.
Take, for example, those 13 houses in western Connecticut the state Department of Transportation sold for more than $4.25 million in the last few years. The homes were in Wilton, Redding and Ridgefield. They were originally bought by the state as part of the right-of-way for a “Super 7,” the plan to upgrade the infamously gridlocked Route 7 into a major highway.
Except the proposal is now estimated to cost something like $1 billion, which the state doesn’t have, and there is still opposition from lots of folks. The whole thing has been debated since it was first proposed in 1955, and it looks like it isn’t over yet.
The DOT has all sorts of bits and pieces of properties scattered across the state that it has been selling off. Since 2009, agency officials say, they’ve closed on sales of properties worth $10.96 million.
There are still plenty of lots on offer. The question is, who is going to pay money for slivers of DOT land like that 0.002 acre slice on Branford’s North Chestnut Street?
Gov. Dannel Malloy is getting lots of flack over the $37.6 billion two-year state budget that just got approved, with critics snorting over what they say are massive gimmicks and magical smoke-and-mirrors tricks all through the plan.
Maybe Malloy should have considered taking the New Haven route and selling off some assets to help with his budget-balancing act.
There is, after all, that study by the DOT that’s been hanging fire for years. It suggested the state could bring in millions by selling naming rights to transit facilities like rail stations. How does the “Mohegan Sun Station at Wallingford” sound to you?
Or we do have that Gilbert Stuart portrait of George Washington that belongs to the state. The estimated insurance value on that bad boy is $20 million.
Copyright © 2013, WTXX-TV