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City councilors question West Quincy land purchase

Posted by dinouye  October 4, 2012 11:27 AM

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To city officials, the purchase of two parcels in West Quincy was all about flood control, but some city councilors are questioning the cost and whether the city cut corners to buy the land without their approval.

The controversy is expected to get a thorough airing at next Tuesday’s meeting of the council’s Oversight Committee.

Debate about the issue began in August, when councilors discovered the city had purchased land at 20 Furnace Ave. that was facing foreclosure, without their permission. The city intends to build a pumping station there to handle flooding from the Furnace Brook.

Furthermore, councilors said the $485,000 purchase, using funds from $25 million in bonds for capital improvements across the city, was too high, given the $135,200 estimated assessed value assigned to the property for tax purposes in fiscal 2012.

When city officials came to the council on Sept. 10 to explain the purchase, councilors postponed the discussion and sent the issue to the Oversight Committee. There, the discussion can be more about the logistics of the purchase, councilors said, and less about how the land would mitigate flooding.

Yet according to the administration, the purchase was and continues to be entirely about flooding issues.

“This whole issue is about politics, it’s not about government,” city solicitor Jim Timmins said of the council’s decision.

“We’re trying to address a flooding problem, and [that] required that we bought a lot of land. . . . The councilors who have questions, they aren’t asking them about that. And Councilor [Joseph] Finn explicitly said he doesn’t want to talk about flooding. That’s unfortunate, because that’s what this whole thing is about.”

Regardless, councilors said they are prepared to sort out the issues at Tuesday’s meeting.

“I’m going to conduct a fact-finding mission,” said Councilor Brian McNamee, chairman of the Oversight Committee. “We will flush out the features of this transaction when we’re in a formal setting.”

McNamee declined to spell out his concerns, saying that the issues needed to be resolved through a formal process.

Without being specific, Finn, who has been outspoken about the purchase, said that he, too, has some questions.

“It’s hard to comment on the conclusions you can draw before people explain the rationale behind certain things — the rationale behind the appraisal and all those things,” he said. “I can’t say I have problems because I have no information whatsoever.’’

But he added: “There are a host of questions of how this sale came about . . . and it seems inconsistent with Mass. General Law and the city charter, and hopefully those will be things we get answers on.”

Several aspects of the transaction differed from typical land purchases: There was no bidding process, as is mandated by state law; the City Council did not authorize the transaction in a two-thirds vote; and the purchase price was more than 25 percent of the average assessed valuation of the property during the previous three years.

Moreover, the seller was not in good standing at the time of the purchase, as is required.

According to Timmins, there are explanations for the inconsistencies.

Bidding was not required because the property was uniquely suited for the needs of the pump station, qualifying it as a “unique property acquisition.” A memorandum stating such was published in the state’s Central Register, Timmins said.

Quincy also doesn’t have to follow the two-thirds voting or the assessed vs. purchase price requirements of state law because it is a Plan A form of government with its own city charter and is therefore exempt, he said.

Furthermore, the city collected past-due taxes as part of the land purchase at 20 Furnace Ave., Timmins said. He said he wasn’t sure how other tax obligations under Miller Furnace LLC, the seller of the property, on a different parcel may have affected the purchase.

“I knew we were getting our real estate taxes in full, and we did collect them,” Timmins said.

Another area of contention is the property appraisal, done by John McGovern of Quincy, which appraised the land at $595,000. The appraisal listed the size of the property as 59,322 square feet, which the document says was taken from the deed. However, the deed said that a portion of the land was sold off, reducing the total square footage to 43,480.

In addition, there may have been a flaw in the property comparison used to set the price. Two of the properties, 92 Holmes St. and 94-96 Holmes St., are listed as separate transactions of $415,000 each. But according to a deed for the properties, those properties were purchased together for $415,000.

McGovern, who worked with the city previously on purchases for the park department, said he couldn’t discuss details of the appraisal with anyone except his client – the city. But he said the numbers in his document were correct and he stood by them.

Timmins said the appraisal contained several errors, but the purchase price was fair.

“We paid well below the $595,00. It wasn’t the driving force here; it was knowing the values were within a certain square-foot range,” Timmins said. “We paid $11.30 per square foot on the lot. The notes I have are that we weren’t to go above $12 per square foot. . . . It was our threshold.’’

Another issue revolves around the property’s seller, a limited liability company owned by Daniel J. Flynn, a longtime friend of Mayor Thomas Koch.

Timmins said that although Flynn and Koch have known each other since they were children at Sacred Heart Parish, and that Flynn raised money for Koch’s mayoral campaign in 2007, “the primary reason Dan Flynn’s name was involved was because he owned the lot,” Timmins said.

While purchasing the property prior to foreclosure does benefit Flynn, Timmins said the transaction was timed to be in the city’s best interests.

“I don’t know if we would have gotten the lot [after foreclosure]. Then if the bank purchased it at foreclosure, their number would be whatever was owed on it. So that doesn’t mean they will give it away after,” Timmins said.

Flynn did not return repeated calls for comment.

The mayor’s spokesman rejected suggestions that Koch’s friendship influenced the purchase.

“The neighborhood has been pushing the city to take this property for many years as part of flood-relief efforts,” said Christopher Walker. “The sense is it made financial sense to act quickly as opposed to going into foreclosure auction, which is a process that takes a long time and the possibility of the city retaining the prop would be limited.”

Looking ahead to Tuesday’s meeting, Timmins said: “I’m prepared to answer questions that are raised. And it’s unfortunate the questions weren’t asked before people ran to the newspapers. We could have settled a lot of this very easily.”

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