We're working on a Monday editorial taking up the idea that the City of Sacramento should aggressively go after money owed to the public to help fill a $50 million budget gap. Council members Kevin McCarty and Rob Fong have identified at least one prime target, worth millions of dollars.
In a rush land deal in December 2006, the city gave Thomas Enterprises $55 million to help the developer close on its $70 million purchase of 240 acres in the downtown railyard.
The city's $55 million was called an "advance payment" on city purchase of 32.8 acres, which included the historic I Street train depot.
With no appraisal, the city paid roughly $1.7 million per acre for the 32.8 acres (while on the same day, Thomas Enterprises paid roughly $292,000 an acre for 240 acres in the railyard).
However, the purchase and sale agreement did lay out a three-month negotiation/mediation/arbitration process to determine the fair market value of the 32.8 acres and to have Thomas Enterprises pay up if the city's $55 million advance payment was more than the final purchase price.
Yet two years have passed and the city still has no final purchase price or settle up.
What do you think the mayor and city council should do?