Monday, March 19, 2007

Property Rights – The Flats Development.

Scott Wolstein wants to build a $230 million dollar development in the flats. The current property owners are holding out for what they consider to be a fair price (I’m sure that Wolstein probably views this has them holding him up). And now, off to the courts to see if Wolstein will get his way.

“The Port Authority, working with Cleveland officials and a developer, is set to argue in court this week that it has the authority to take nine properties in the Flats area because they haven't been able to negotiate a selling price with the owners.

If Cuyahoga County Probate Judge John E. Corrigan rules in the government's favor, a jury would set the price.

The property owners say they haven't been offered fair prices for their properties to make way for the $230 million Flats East Bank Neighborhood, planned by developer Scott Wolstein.

‘Unless I'm satisfied, we'll take it as far as we can,’ property owner William Droe said.

Droe wants $5 million for his land, he said Friday, despite having once dropped his asking price to $3.5 million. The port started its offer at $1 million and raised that to $1.7 million.”

Under this scenario – and assuming that Droe would still be willing to sell out for $3.5 million – the Port Authority is still trying to buy the land for Wolstein at a little less than half price. If the government didn’t have the ability to essentially take the land, you probably would have seen something that looked more like a real negotiation than the ‘see you in court’ approach.

Essentially, the Port authority is proposing to take money fro Droe, and give at least a substantial portion of it to Wolstein.