The financial crisis of 2007 resulted in one of the most devastating financial events of our country’s history. Banks were loaning out money without verifying income or assets. Appraisals were minimal and sometimes waived. Credit standards were loosened or non-existent. Processing a loan was more of a procedural checklist, and transactions were closed at record speed with no assets, no income, no appraisal. In some cases, you can skip your first few payments.
That is exactly what the City of Chehalis and the Airport Board are doing with the assets of the city. They are loaning out the use (ground lease) of city assets for the next 20-plus years to entities who do not pass financial background checks.
Airport Manager Brandon Rakes finds a client and completes the application. City Manager Jill Anderson approves the transaction, City Attorney Erin Hillier writes it up and city council approves it.
If this is sounding more like a Countrywide Mortgage loan or Dan Marino and The Money Store, you are correct!
We do not have a real estate professional to represent us in these transactions. Oddly enough, we pay for the tenant’s realtor who does not have our best interest in mind. We do not check the financial condition of the tenant — no credit report, no income, no financial statement, a minimal appraisal review to determine market rents and still nobody with real estate experience to represent the City.
The recent lease to the O’Brien Auto Team allows for no payments until they complete a building, and no payments until they fill and grade for hundreds of thousands of dollars. There is no performance bond and no title insurance updates while they build. This could leave us with a pile of dirt, a blue tarp and unpaid contractor liens for hundreds of thousands of dollars.
The city is financing these businesses in the hopes that they build something worthwhile and not protecting the citizens from the risk. The city has given the company the use of the land to do as they wish, with no payments for months or years. There is no performance bond, no background check, nothing.
Who is watching the Chehalis city assets when nobody with real estate experience is selling our assets? How do we get fair market value when the city refuses to put it on the market? We rely upon one plywood sign and an airport manager to cultivate a market of commercial buyers to help this city build a future.
The city manager and airport manager are selling millions of dollars of the city’s assets without any real estate experience or representation. The Chehalis City Council is approving this behavior, leaving the citizens with the infrastructure bill and an unstable airport commercial development.