August 16, 2007
Questions for Frank Michel about the Center

As noted yesterday, I had the chance to ask Frank Michel, the Director of Communications for Mayor White, a few questions about sale of land to the Center Serving Persons with Mental Retardation. Here are the questions and his responses:

1. What prompted the review of the Center's lease with the city?

We have been reviewing all city property, not just the Center property, to determine its status and to ensure the best stewardship of properties based on a transparent, fair set of principles and responsible, businesslike management. Those principles are outlined in the mayor's statement below, as are some examples of how that has already benefitted the community. As the mayor's statement reflects, discussion with the Center took place over the course of about three years. We apply the same set of rules to ALL parties seeking to use public property.

2. The neighboring Center for Hearing and Speech also has a 99-year lease with the city. What action is the city pursuing with them?

We are honoring the terms of the lease.

3. I thought part of the issue with the Center's lease was that City Attorney Arturo Michel had issued an opinion saying that 99-year leases violated the city charter. How is this different?

The Legal Dept. advises me they are under a 99-year lease that originated in 1965. MHMR shares that lease with them. As I stated before, we are honoring the terms of the lease and evaluating what if anything to do. No further action is planned at this time.

One additional point: The City Attorney's office advises that the action was taken on the Center Serving Persons with Mental Retardation in part because they were pressing the City for a new lease.

Note: The Center Serving Persons with Mental Retardation had multiple leases, as noted in the Mayor's statement, for different pieces of its property. This was due in part to past expansions of the Center. One of its leases, a 30-year lease signed in 1972, had expired in 2002. The Center had been leasing that piece of land on a month-by-month basis since then.

4. Is the city generally trying to get out of the landlord business, in particular its leases with nonprofits?

No, not at all . There are, for example, neighborhood clinics where people or organizations using public properties are helping to provide a critical and important public function or service and we want to continue partnering with them under a transparent, fair set of rules with accountability to the taxpayers for the use of their asset. Again the mayor's statement below outlines the policy.

5. Some people have characterized the city's actions in regard to the Center - the declaration that the 99-year lease was invalid, along with the potential that the land could be sold from underneath them - as a "shakedown" to get more money from a tenant that had been paying a dollar a year. How do you respond to that?

Everyone is entitled to their opinion but we all have to share the same set of facts, and the facts just do not support that assertion. The deal worked out with the Center is fair and equitable and helps remove doubt about the Center's future. The City has been fair to the Center and to the taxpayers. To state otherwise is not factual.

So there you have it. I've got some questions ready for David Baldwin, the president of the Center's Foundation for the Retarded, when I get to speak to him. Click on for the Mayor's statement that Michel referred to in his responses.

Wise Management of City Assets

By Bill White

I and other City officials greatly respect the work of the Center for Retarded and desire a reasonable agreement which allows the Center to preserve and expand its important mission in caring for our citizens with special needs. We will be willing to work with them in considering any location, including the current one. But the leases of City property must have policies which apply in a non-discriminatory manner to all those who seek to use public property.

The City of Houston manages money and other assets, such as land, equipment, and buildings, which belong to the public. In this Administration, we have sought to be good stewards of all those assets based on (1) clear principles, (2) accountability for results per dollar invested, and (3) open, public decision-making.

Decisions on resource allocation begin with the focus on those essential functions of government which are the primary responsibilities of local government - public safety, parks and libraries, garbage collection, aviation, certain public health functions, and the construction and maintenance of critical infrastructure such as water and sewer, and streets. Other levels of government administer other critical and needed services, such as public education, higher education, uninsured healthcare, and care of those with mental health and mental retardation. The City can provide limited support of those activities through actions such as seeking grants and encouraging charitable contributions.

The City is being criticized for asking The Center for the Retarded, to engage in good faith negotiations for a lease of public property using processes and criteria which we are applying on a non-discriminatory basis to a wide variety of non-profit organizations providing services to those with special needs, the homeless, those with chronic illnesses, and other vulnerable populations such as infants and the elderly.

As I have said many times in many places, cities, like people, should be judged by how they treat their most vulnerable citizens. And we have declined offers by private interests to buy valuable real estate so that many essential public services should be at appropriate, often central locations.

During this Administration, we have tried to improve management of our real estate. Historically, Houston maintained surplus real estate with no planned use, or permitted non-profit and occasionally for-profit entities to lease City real estate for little or no value. There are two problems with handling public assets, whether it be cash or real estate, without formal standards: first, we lose the opportunity to maximize the use of our assets in the public interest; and second, we fail to account annually for the value of grants or gifts to various organizations, and to subject them to open annual debate in our budget process.

The public has realized tremendous benefits from business-like management of City real estate. Consider these examples:

  • We sold a City-owned downtown parking garage for $8 million, and we were able to reinvest the funds in needed new underground parking for the George R. Brown Convention Center and our new downtown park under construction, Discovery Green.
  • We sold a high-value piece of real estate on West Dallas, and used the money realized to invest in more neighborhood drainage projects.

  • We leased City land to the Museum of Natural Science for $5 million, allowing that outstanding educational and cultural institution to expand, and used every penny as a match for even more private donations for improvements to Hermann Park.

  • Last month we sold an old, unused fire station near the Medical Center for $3.1 million, allowing us to afford other needed public safety facilities.
  • We sold a 10-acre site on the east side to the Houston Community College System for $1.2 million with the condition that they build a new educational facility on that property.

We frequently are asked by public and non-profit organizations to use public land for free. We decline, but do consider proposals to pay fair market value, as did the last Administration in the lease to Lakewood Church. We do intend to give priority to non-profit organizations who seek to acquire our underutilized real estate, by purchase or lease, based on its fair market value.

The Center for the Retarded provides critical and important services on 6.72 acres of City land. One acre, with a residential facility, is simply occupied without an existing lease. Five acres are occupied under a lease which legal counsel and those in prior administrations have said violates the City Charter. The remaining 0.72 of an acre is subject to a valid lease. In addition, Center residents use about 2 acres of City park space which has been fenced in as part of the Center's campus.

As I said, I am committed to working with the Center to find a reasonable, fair solution. We are willing to work with them in considering any location, including the current one. In numerous meetings over the course of three years, City employees and volunteers have asked the Center to help us both continue some public support for their organization and do so in a manner which allows us to work within a set of principles applicable to all worthy non-profit organizations which seek to use City funds, buildings, or land.

It is neither fair nor appropriate for the Board of the Center, consisting of outstanding and sincere individuals, to place all of the responsibility on the City for failing to obtain a valid lease on its site. Similarly, I believe that this Administration has some responsibility for the impasse with the Center. I will accept personal responsibility for helping the Center obtain a secure future.

I would ask the public to understand that no dedication of taxpayers' property is "free," and that any choice that the City dedicate limited public funds or real estate for one purpose ultimately comes at the expense of some alternative use. In addition, please understand that the City must make hard choices and have some alternative to protect the value of City assets if any organization simply occupies land owned by taxpayers, without an agreement no matter how worthy the cause.

Finally, there are ways for all of us to support the work of the Center. I urge people to contribute to the care and lives of these vulnerable citizens by contributing to the Center for the Retarded, 3550 West Dallas, Houston, TX 77019. These contributions are tax deductible.

Posted by Charles Kuffner on August 16, 2007 to Elsewhere in Houston