Lien sale looked good then - Pittsburgh Tribune-Review With Pittsburgh short on cash but flush with unpaid tax bills in the mid-1990s, then-Mayor Tom Murphy received an offer that must have seemed too good to be true.I'm waiting for Tom Murphy to come back into the state-wide news by organizing a new deal so as to sell off the Pennsylvania Turnpike.
Capital Asset Research, a private company later taken over by MBIA, a New York-based bond insurer, wanted to pay Pittsburgh more than $32 million for liens against property owners who hadn't paid their taxes.
More than a decade later, Mayor Luke Ravenstahl's administration is negotiating to undo the agreement with MBIA by purchasing the tax liens for pennies on the dollar.
'Everybody realizes it was a bad deal on all ends,' said Adriane Aul, vacant property program manager for the Pittsburgh Community Reinvestment Group. 'It was a short-term solution that created a very long-term problem for everybody.'
Perhaps I should send him an invite to hatch a deal for the Wabash Tunnel. He could unload that for PAT's sake as they don't want to operate it any longer. Funny how I want to turn one lane of the Wabash Tunnel into a bikeway while cars and buses can still travel on the other lane. That is something that Murphy should support as he is so pro trails. Such a joke too.
Back to the article. "Did anybody expect this nightmare? No, no, no. Nobody did it intentionally. It's a real process we've gone through." Well, I expected the nightmare.
People will wake up to the evil that lurks behind the increases (recent and more are proposed) in the deed transfer tax too, some day.
Put off the 'day of reckoning' -- or -- as it should be stated, 'era of wreckoning.'
Blind spots are killers. Too often people choose to accept blind spots. Think again!
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Lien sale looked good then
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By Andrew Conte
TRIBUNE-REVIEW
Friday, December 1, 2006
With Pittsburgh short on cash but flush with unpaid tax bills in the mid-1990s, then-Mayor Tom Murphy received an offer that must have seemed too good to be true.
Capital Asset Research, a private company later taken over by MBIA, a New York-based bond insurer, wanted to pay Pittsburgh more than $32 million for liens against property owners who hadn't paid their taxes.
More than a decade later, Mayor Luke Ravenstahl's administration is negotiating to undo the agreement with MBIA by purchasing the tax liens for pennies on the dollar.
"Everybody realizes it was a bad deal on all ends," said Adriane Aul, vacant property program manager for the Pittsburgh Community Reinvestment Group. "It was a short-term solution that created a very long-term problem for everybody."
At the time, Capital Asset's offer was more than a lifeboat for the sinking city. With other one-time deals -- such as the sale of the city water authority -- it helped keep Pittsburgh afloat until the state took over fiscal control in 2003.
Few people say they realized the lien sale would hurt redevelopment efforts.
"Everybody learned a hard lesson," said Aggie Brose, deputy director of the Bloomfield-Garfield Corp., a community development nonprofit. "Did anybody expect this nightmare? No, no, no. Nobody did it intentionally. It's a real process we've gone through."
Michael Ballinger, a spokesman for MBIA, said the company has sold liens back to Pittsburgh whenever a community group wants to redevelop properties. He declined to comment on negotiations with the Ravenstahl administration to sell back the entire portfolio.
Murphy, who left office in January after three terms, declined to comment.
From the city's perspective, the deal amounted to getting money up front for uncollected taxes that it eventually would have received, said David Miller, a former Murphy administration finance director.
Capital Asset, then headed here by former Steelers great Dwayne Woodruff, paid more than $32 million in two installments, in 1996 and 1997, said Acting City Controller Tony Pokora. Woodruff, now a common pleas judge, declined to comment.
The city kept nearly $17 million. The remaining $15 million went to Pittsburgh Public Schools and the city Water and Sewer Authority. Allegheny County worked out a separate tax lien sale with a different buyer.
The tax lien sale gave the city money to operate at the time, but it stalled bringing life back to neglected neighborhoods, said Mulugetta Birru, who headed the city's Urban Redevelopment Authority.
As for the city, the deal only prolonged the inevitable, said David O'Loughlin, an original member of the city's state-appointed fiscal oversight board.
"There was not a focus on, how can we attack this problem?" O'Loughlin said. "All these one-shot deals do is put off the day of reckoning."
Andrew Conte can be reached at aconte@tribweb.com or (412) 765-2312.
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