We Love Our Neighborhood So Much We Bought It!

Can you?

To the young people who just discovered urbanism, "saving" a neighborhood icon is big news. (For example: Melrose Building Sold, to Be Replaced By Seven-Story Development) Since I have heard about such impending catastrophes for at least 40 years I am a bit skeptical.

Nevertheless, Roger Valdez has proposed an interesting approach We Love Our Neighborhood So Much We Bought It! The gist of the proposal is to form a "Neighborhood Real Estate Invest Trust" to purchase and preserve "endangered" buildings. Roger offers an example of 1200 people putting up $1200 to create a $1,440,000 Trust. It's an interesting approach, putting aside the various SEC (?) rules on the number of investors allowed, etc etc the organizational costs (legal, mostly — such an entity will cost, I bet, a good $10-15,000 at a minimum. 

So I'd be curious to see a real world test — the economics of the very subject property in the first link. How much did the property sell for? Is it anything like $1,440,000? What are the numbers like? I suggest Roger should do a real world financial model.

Comments

[Roger Valdez]

Hello David,

Yes, it's true that the property in question probably couldn't be purchased for $1.4 million dollars. But maybe, with some City match and the sale of the development rights, it could be put in reach.

When I have some time, maybe I can put together the numbers. Even if I can make those work, you're correct that SEC limitations would make this approach unlikely.

However, using other vehicles like a Public Development Authority or even just an LLC, there might be a way to make it happen.

More than anything, I'd like for opponents of projects to think about what it means to buy property and add value to it and to operate it. It might just be a "thought experiment," but it does have people thinking about something different than how bad the developer is for wanting to build something different there.

Roger--