This is why you never buy a house on land you don't own

wapiticountry wrote:
I would be shocked if the City wasn't required by law to maximize the proceeds in any sale. Usually this is accomplished by requiring sealed bids in any sale of publicly owned property. It is possible that the parks have the right of first refusal in such a sale, but I really can't see any way they could just negotiate a sales price without competitive bidding. A negotiated sale without bidding would be ripe for all sorts of fraud and malfeasance. Selling the land for $30 Million when it is worth $50 million would be ripping off the taxpayers, but might be very attractive to the City staffer whose uncle owned one of the parks or if there was a million dollars of unmarked bills suddenly left on the seat of his car. Obviously we don't have all the information, so it will be very interesting to see how it plays out.

The article talks about this issue by indicating they had independent appraisals done...While it's possible it could be manipulated, it's not likely and it's a defendable option if they followed a reasonable process.

I think the bigger complication was the ancillary benefits to the local economy. The campgrounds represent a high density of short term guests who likely spend a lot on a per person basis at other businesses. So doing a high bid option may have killed the RV parks only to be replaced by lower density, lower per capita spending condos. The rest of the business community would not be happy about that kind of action. This creates a conflict of interest within the city and is a good reason why they aren't well suited to playing landlord.

A state, county or city selling recreational land to private enterprise bothers me. Not sure this is what the Federal government intended when they gave the land to the city. Whatever these parks are charging now will go way up to pay the city. Is MB in financial trouble?

Gdetrailer wrote:

valhalla360 wrote:
I think the bigger thing is the dollars involved.

$33million for the land...figure with improvements a total value of $50mil for one of the parks. Most businesses will want annual returns on the order of 15-20%, so it needs to generate around $7.5-10mil per year in addition to ongoing operating costs (staff, maintenance, utilities, etc...). Even for a big park, that's a lot of money to generate.

Sounds like the biggest issue for the city was how to get out of the landlord business without driving the campgrounds out of business. Didn't sound like there was any intent to stop leasing the land to the campgrounds until they could sort out a sales deal and the campgrounds benefitted from decades where they didn't have to come up with the money to buy the land outright, so no real harm there.

^^^This^^^

Campgrounds are currently leasing that land from the City of MB so they are paying for the land already but they do not own that land.. Keeping in mind that this is a very SMALL portion of these two campgrounds. Affects the southern part of Pirateland and the northern part of Lakewood.

In reality buying out city of MB of that land will increase the campgrounds value for land/property and would eventually get the campgrounds out of the land lease which is costing them for that lease.

I know there has been concern about the city of MB selling the property to outside developers which would most likely end up with bunches of additional condos which would most likely generate more income for the city of MB but at the demise of lower income from the campgrounds..

I would be shocked if the City wasn't required by law to maximize the proceeds in any sale. Usually this is accomplished by requiring sealed bids in any sale of publicly owned property. It is possible that the parks have the right of first refusal in such a sale, but I really can't see any way they could just negotiate a sales price without competitive bidding. A negotiated sale without bidding would be ripe for all sorts of fraud and malfeasance. Selling the land for $30 Million when it is worth $50 million would be ripping off the taxpayers, but might be very attractive to the City staffer whose uncle owned one of the parks or if there was a million dollars of unmarked bills suddenly left on the seat of his car. Obviously we don't have all the information, so it will be very interesting to see how it plays out.

valhalla360 wrote:
I think the bigger thing is the dollars involved.

$33million for the land...figure with improvements a total value of $50mil for one of the parks. Most businesses will want annual returns on the order of 15-20%, so it needs to generate around $7.5-10mil per year in addition to ongoing operating costs (staff, maintenance, utilities, etc...). Even for a big park, that's a lot of money to generate.

Sounds like the biggest issue for the city was how to get out of the landlord business without driving the campgrounds out of business. Didn't sound like there was any intent to stop leasing the land to the campgrounds until they could sort out a sales deal and the campgrounds benefitted from decades where they didn't have to come up with the money to buy the land outright, so no real harm there.

^^^This^^^

Campgrounds are currently leasing that land from the City of MB so they are paying for the land already but they do not own that land.. Keeping in mind that this is a very SMALL portion of these two campgrounds. Affects the southern part of Pirateland and the northern part of Lakewood.

In reality buying out city of MB of that land will increase the campgrounds value for land/property and would eventually get the campgrounds out of the land lease which is costing them for that lease.

I know there has been concern about the city of MB selling the property to outside developers which would most likely end up with bunches of additional condos which would most likely generate more income for the city of MB but at the demise of lower income from the campgrounds..

I think the bigger thing is the dollars involved.

$33million for the land...figure with improvements a total value of $50mil for one of the parks. Most businesses will want annual returns on the order of 15-20%, so it needs to generate around $7.5-10mil per year in addition to ongoing operating costs (staff, maintenance, utilities, etc...). Even for a big park, that's a lot of money to generate.

Sounds like the biggest issue for the city was how to get out of the landlord business without driving the campgrounds out of business. Didn't sound like there was any intent to stop leasing the land to the campgrounds until they could sort out a sales deal and the campgrounds benefitted from decades where they didn't have to come up with the money to buy the land outright, so no real harm there.

Pireateland could buy 63 acres and Lakewood 81 acres. Isn't that about half of each campground? They left out a lot of necessary info in the article that would explain a lot!