Keep in mind that those apparently still angry Georginos — Airport Commissioner Sue, of the instant walkout last fall after she was told she couldn’t keep serving on as a resident of Los Angeles — and Vic, the Developer (whose old business partner made a killing a few years ago over a shady Burbank Housing Authority deal) — both suddenly left their Hillside home last year and moved to Toluca Lake.
That same Hillside neighborhood they used to live in will soon be sitting under a renewed flight path to the airport — one that was also well used during the 1960s and early 1970s. So a precedent for its use exists.
Isn’t that interesting timing for someone who was so heavily involved in the quiet (i.e., secret) negotiations between the city and Authority? Get a big new airport going and then bail out right before.
Here’s an old Leader article about that shady business deal:
City Wants Sale Reversed
The seller of the property purchased by the city made a profit of $365,000, an amount city officials consider excessive.
March 24, 2007|By Chris Wiebe
CITY HALL — The City Council has asked the Burbank Housing Corp. to halt rehabilitation of a newly purchased apartment complex on Verdugo Avenue. It made the move because the property acquisition resulted in a sizable profit for the seller.
Records show that property owner David Augustine reaped a $365,000 profit from the city on the sale of a two-story, eight-unit complex to the Burbank Housing Corp. — a nonprofit agency that buys and renovates residential properties for affordable housing — after owning the property for just 10 days.
Though the council approved the housing corporation’s $1.4 million purchase in a 4-1 vote on Jan. 23, a city staff report providing the council with some details of the transaction did not include information that Augustine had acquired the property only days earlier for $1.035 million.
Now that the new information has come to light, the council has asked Burbank Housing Corp. officials to contact Augustine in an attempt to reverse the sale. In the meantime, the council has also asked for improvement work and steps toward tenant relocation to stop, as long as those measures do not negatively affect tenants. So far, two tenants have been relocated, said Ruth Davidson-Guerra, assistant community development director for Housing and Redevelopment.
The council’s move was intended to send a message that real estate speculators should not take advantage of the city’s attempts to provide long-term affordable housing, Councilman Dave Golonski said.
“I don’t want to encourage people in the land speculation business to be purchasing properties that they know the city is interested in, or that the Redevelopment Agency is interested in,” he said.
“I don’t care who they are; I just know it’s a bad practice to encourage people to do that.”
In order for the sale to be rescinded, both parties — Augustine and Burbank Housing — must agree to nullify the transaction.
The city’s appraiser, Otis Hackett, did not include the $1.035-million sale on his comparable sales chart because it was at a much lower price than the appraiser’s sense of the market told him it should have been, Davidson-Guerra said.
To prevent this type of sale in the future, city staff reports on real estate transactions will include a three-year history of purchases, she added.
“In retrospect, staff does acknowledge that information regarding the prior private-party transaction could have been helpful to the City Council as it was making its decision,” she said.
The city never reversed the deal btw. Instead, the entire council played dumb about it at their next meeting. “Purchase? What purchase? Oh yeah, that one…” There was also much more to the deal:
There’s More to the Story on City Deal
Nice editorial in the April 7-8 edition of the Burbank Leader, “The city should eat its loss.” However, we feel you left out some important information.
California is a community-property state, so Community Development Director Sue Georgino, along with her husband, are both partners of David Augustine.
All we have to go on is a statement made, after the purchase, by a subordinate of Georgino’s that the Community Development director never directly participated in the transaction.
Staff members knew of the Georgino/Augustine partnership. Staff knew there was going to be a $365,000 profit going to Augustine. Knowing this, can you imagine the indirect pressure redevelopment staff was under to buy the property? Why else would they have agreed to buy the property for $50,000 more then the appraised value? Why else didn’t they ask for a reappraisal when they found out it was going to cost more then $225,000 to make the property habitable? Why else was this information withheld from the public and the City Council? Why else did staff attempt to keep the transaction under the radar by placing it on the council’s consent agenda instead of making it a regular agenda item?
In addition, there is a discrepancy in how the city even knew of the property. City staff claims Augustine’s representative contacted them. However, in a letter to the city, Augustine’s attorney stated that it was the city that made the initial contact to purchase the property.
What the public needs is an audit by the state Attorney General’s Office or the District Attorney’s Office, not some private firm where the city can tell them what results they want and have the whole matter white-washed.
STAN AND MOLLY HYMAN
After they were threatened with a lawsuit over their stories, the Leader suddenly came up with this silly editorial mentioned above (they have apparently scrubbed the original stories from their archive, as they’ve done with many old pieces not complimentary to the City of Burbank).
It’s right here. Stupid and mindless as this old editorial is, it does though verify the potential conflict-of-interest problem for the Georginos.