Return-Path: <Eyes4Hire@aol.com-DeleteThis> Received: from opus.labs.agilent.com (root@opus.labs.agilent.com-DeleteThis [15.0.168.176]) by jr.labs.agilent.com (8.9.3 (PHNE_18979)/8.9.3 AgilentLabs Workstation) with ESMTP id XAA20145 for <wind_talk_ls@jr.labs.agilent.com-DeleteThis>; Tue, 9 May 2000 23:46:56 -0700 (PDT) From: Eyes4Hire@aol.com-DeleteThis Received: from cosrel1.hp.com (cosrel1.hp.com [15.88.192.10]) by opus.labs.agilent.com (8.9.3 (PHNE_18979)/8.9.3 AgilentLabs Workstation) with ESMTP id XAA10827 for <wind_talk@opus.labs.agilent.com-DeleteThis>; Tue, 9 May 2000 23:46:57 -0700 (PDT) Received: from imo12.mx.aol.com (imo12.mx.aol.com [152.163.225.2]) by cosrel1.hp.com (Postfix) with ESMTP id AB988340 for <wind_talk@opus.labs.agilent.com-DeleteThis>; Wed, 10 May 2000 00:45:47 -0600 (MDT) Received: from Eyes4Hire@aol.com-DeleteThis by imo12.mx.aol.com (mail_out_v26.7.) id v.78.509094b (4565); Wed, 10 May 2000 02:45:11 -0400 (EDT) Message-ID: <78.509094b.264a5f77@aol.com-DeleteThis> Date: Wed, 10 May 2000 02:45:11 EDT Subject: My take on FPPC action Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit X-Mailer: AOL 5.0 for Windows sub 105
In a message dated 5/9/00 8:08:09 PM Pacific Daylight Time,
cathyb@baylock.com-DeleteThis writes:
> The commission, led by Makel's comments, accepted Galligan's contention
> that his voting on the project would not affect the outcome of the bridge
> loan between his bank and Glenborough. He persuaded the commission on the
> grounds that if the project went forward, the bridge loan to MPB would be
> paid off immediately, causing the bank to lose interest since the life of
> the loan extends to January, 2001. And, he claimed, even if the project
> did not go forward, Glenborough would sell the property and still pay off
> the loan ASAP.
This description of the situation presumes that Glenborough can sell the
property for more than they paid for it or for at least the amount of any
outstanding debt. If they can't, then the bank might have to foreclose and
sell the property at a loss. If Glenborough paid a high price with the
expectation of being able to build a lucrative higher density project, then
the value of the property may be lower than what Glenborough paid since the
Planning Commission has made it clear that they are not interested in a
project which is on the high end of the allowed density range.
It would be interesting to know what appraised value the bank assigned to the
property and how they reached that valuation. An appraisal would have based a
valuation primarily on the size and type of development to be built. Often an
appraisal is designed to examine what the end value of the intended project
will be without going into a complex analysis as to whether or not approvals
are likely to be given. If the appraisal assumed a build out of a 636,000
square foot commercial office development, then the appraised value needs to
be reduced by at least the same percentage that the square footage is likely
to be reduced by.
The Fair Political Practices Commission could only have made an intelligent
ruling if they were provided with appraisal information, loan terms including
due date (the marketing time on a property like this is probably very long
and might extend past the loan due date), and information about the likely
end size of the project so that they could make adjustments to the property
value. With this information they could determine whether Summit is at risk
of taking a loss on the loan.
Peter Thorner
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