April 20, 2007
The Center's deal with the city

Here's what we know so far:

The Center Serving Persons with Mental Retardation will pay the city $6 million for prime inner city property it now uses in exchange for the services it provides, city officials said today.

Mayor Bill White and officials of the facility are announcing details of the transaction, which involved 6.2 acres at Shepherd and West Dallas, during a news conference this afternoon.

Details of the deal were not immediately available, but it involves a favorable interest rate and a discounted price based on the city's declaration that the land is intended for public service rather than commercial use, according to a news release from the city.

I spoke to David Baldwin, the president of the Center's Foundation, and he gave me a few details. More will be forthcoming when I get a copy of the city's letter of intent, which I am told has everything you could want to know.

- Finalization is about 90 days away. Both the Center's boards and City Council have to approve.

- No problems on their end, everybody at the Center is very supportive of the deal. Other stakeholders, including Council members, are supportive as well.

- The sale also resolves all legal matters relating to the Center, the land, the leases, etc.

- The city is financing deal. Baldwin said that the availability of good financing was part of the negotiations, and part of what made this deal possible.

- Baldwin had complimentary things to say about Mayor White. "He was looking to protect the rights of the city and other nonprofits", but was reasonably sympathetic to the center as well.

- More from Baldwin on Mayor White: "I couldn't do what he does. I think he did a good job negotiating for the city, he was very hands-on once he got involved, and worked with us to get this done."

That's all I got. I'll post the letter of intent when I receive it.

UPDATE: No letter of intent yet, but I do have the Mayor's press release:

Mayor Bill White and the Center Serving Persons With Mental Retardation and The Foundation for the Retarded have agreed to terms to secure the future of the Center's residents and allow the City to dedicate the use of the property used by the Center and realize its residual value.

According to the President of the Foundation, David Baldwin, "These terms are fair and allow us to continue and expand the important mission of the Center in serving our citizens with special needs."

The City and the Center have agreed to work towards a final agreement to sell the City's residual interests in the property for $6 million, to be paid over time with interest. The agreement covers 6.72 acres of property, most of which is covered by existing leases. The agreement would have to be approved by City Council, under guidelines established by state law, and the Boards of the Center and its Foundation.

"I deeply sympathize with family members and loved ones who have been concerned about the future of the residents of the Center, and expect this agreement to allow the Center to expand its services because there are so many citizens with special needs in our community," said Mayor White. "The principles of this agreement can be applied on a non-discriminatory basis to other social service providers who have made capital improvements and provided services on City lands over decades."

Both the Center and Mayor White used experts to assist in determining the value of the land and also existing leases covering the property, and accounted for the intention of the City to dedicate the property to public services, as opposed to commercial development.

"Communication was good and constructive, and we respect the City's obligation to be good stewards of its limited resources when there are so many competing, worthy uses," noted Mr. Baldwin.

Mayor White said the agreement will allow the value of the City's property to be openly reflected in the City's financial statements. "I and the people of Houston have never doubted the important work of the Center. Ultimately the City will be able to provide more essential services for more people if we manage all resources with full public awareness of the cost of our commitments," stated Mayor White.

The Mayor urged citizens who care about the work of the Center to donate to the Center to support its expansion. Mr. Baldwin said that ownership of the property, under the terms agreed to, is financially viable for the Center and could enhance the Center's ability to improve and expand the service it provides. "Ownership of the Center permanently secures our future, and we thank Mayor White for considering this alternative," added Baldwin.

Still more to come later, I'm sure.

Posted by Charles Kuffner on April 20, 2007 to Elsewhere in Houston

Sounds like it's a permanent deal and not a lease. Hopefully the contract favors growth of services rendered on the property as the city grows. If not, stagnation of services on this property could make it an irrevocable boondoggle. The contract should also account for any adjustments based on future unfunded mandates to the city for similar type services.

Posted by: Charles Hixon on April 20, 2007 5:27 PM

How "embarrassing" for the Mayor. Good thing he "backed off" ;-)

Posted by: Greg Wythe on April 20, 2007 5:48 PM