After the City Council overwhelmingly approved a developer-payment agreement for 4043 Irving Pl. on Monday night, one of the developer principals recalled an incident from two years ago.
Financier George Mitsanas said that city Housing Administrator Tevis Barnes “put out an SOS memorandum to the business community. She said the Housing Dept. essentially was broke.
“When we saw that, because I am in the finance business, I said ‘We want in that city.’
“We said ‘Hey, we can do a net present value on the note. It’s an opportunity,” said Mr. Mitsanan, “to monetize a piece of paper that you won’t touch any money.
“That’s the structure of the deal for 30 years, approximately.”
Then the drama began.
Mr. Mitsanas said that when he met with City Hall officials “and laid it out for them, we thought the value of the note was lower than the number there.
“The city used their consultant, and she came up with the number $770,000,” he said. “Their consultant did all of the analysis, and they valued the note. Our number actually was lower. But it was not so much lower that you would say ‘we are going to break the deal over it.’
“This was an opportunity for the city to use that money,” Mr. Mitsanas said. After the April 12 election of at least two new members, “I hope the next Council has the financial understanding not to go using this money on pensions and instead uses it for housing.
“If they are able to do that, the city comes out way ahead,” he believes. “Otherwise, they wouldn’t have had a chance to touch that money for over 30 years.
“It is a great deal,” Mr. Mitsanas said. “My understanding is that at the moment, the city is tapping into the General Fund to pay for housing.
“I am not opposed to housing. We are in the business of housing. We are taking away from whatever that General Fund does for your good city, and now here is an opportunity to use that money and, if it’s done wisely by the smart staff here, they can parlay that into additional housing,” Mr. Mitsanas said.
Fast forward one year to 2015.
“I got a call from Tevis Barnes,” he said. “She told me that ‘out of all the business people we went to, you and (partner) Sal Gonzalez are the only ones who came up with a creative idea. I can’t tell you we are going to do it, but thank you for showing creativity in coming up with a solution.’”
