March 29, 2018

Marlin, the Veterans Administration and P Bush
with petards for Houston real estate flippers

About a month ago, I wrote a piece about a Houston real estate development and investment group buying the old VA hospital in Marlin a little over a year or so ago, and questions I have. Full story is here, with edited excerpts and follow-up following in this piece.

The Marlin VA hospital in its glory days, or near them. The
shuttered facility was purchased earlier this year
on a promise of being re-opened while being re-purposed
for other veterans-related needs, yet nothing has happened so far.
Photo by Waco Tribune/Rod Aydelotte
As I noted then, I wasn't aware that the state of Texas had finally sold this, let alone that it was being reopened.

Well, per various news stories, the idea that Marlin may be returning to an Eisenhower-era or earlier golden age (for white people, at least) seem to be fading more and more. Perhaps the most recent hope shouldn't have been so spit-polished in the first place.

Let's try a more honest reality. From my figurings and listenings, and lack of being talked to by some people, like the former mayor, Elizabeth Nelson, this reality check is needed for some.

Houston's Sterling Real Estate Development appears to have bought the place to flip it. (It also tried to buy the iconic — and deteriorating, but that's being arrested — Falls Hotel, the eighth original Hilton built by Conrad himself. It failed on that, and it was not the only interested would-be buyer.)

If former mayor Nelson truly is clueless about this being a likely planned flip, she needs to wake up and smell the coffee. If she is not, then my next suggestion would be to have the integrity to join Denny in resigning from the oversight committee for the building, at a minimum.

That again leads to my original questions, with some follow-ups in italics.
1. What price did the Texas General Land Office sell the building for? (This is a state agency; if nobody told you at the time, it's time for an Open Records Act request. But that's not for me.)
Was the price lowered under "false pretenses"? (Put in scare quotes for legal reasons.) This certainly seems possible. And, if so, did anybody in points 5 or 6 aid this in advance?

2. What was the asking price at the time? (That may not be on any record, but somebody may talk.)

3. Does the Falls County Appraisal District have an appraised value for the site, both now that it's private property, but also when the state owned it?
It's on the tax rolls now, whatever its value is. That means the flippers have to get flipping quick enough, even if they have a fairly large portfolio. Maybe they'll put up barbed wire, run 10 cows out, and claim an ag exemption. And, the appraisal district, especially after it's on the rolls for more than a full year, doesn't have to accept P Bush's sales price as its appraised value.

4. If there's a significant difference between 1 and 2, above all, and maybe 1 and 3, why?

5. If something pans out on 4, how much did either state Rep. Kyle Kacal or state Sen. Brian Birdwell facilitate this price drop?

6. Related to 5, if you get names of principals at SRED, have any of those names made some campaign contributions? Had any lobbying-type visits to state House or Senate committees on which one or the other of those two gentlemen serve? FYI, Birdwell served this past Lege as chair of the Select Committee on State Real Property Data Collection; I'm sure this committee has interactions with the GLO. Sounds like a place to start right there. He was also on the Senate's State Affairs Committee.
This is for somebody else to ask, too. Given that the Waco Trib only really covers schools news in Marlin, and the teevee folks don't do investigative journalism out here to any great degree, it probably won't happen.
I still wish somebody from the Houston Chronicle picks up a thread on this due to the Houston-based nature of SRED. But, that's not going to happen, either.

The local paper in Marlin? Sorry. That's all I can say now on that angle.

And, no, I'm not being cynical. I'm just being properly skeptical on all of this.

People in Marlin have been critical of Chris Martinez for not doing more with the hotel. But maybe the reason the deal with the developer fell through is that he did more due diligence or exercised more scrutiny. And that may be not just with the Houston flippers, but with other offers he received.

And, now, it's reality check time.

For the Houston flippers? You're in a county that's still one of the poorest counties in Texas outside the lower Valley. Good luck with the flipping, because you're going to need lots of it. Marlin already has a hospital. The VA has been consolidated in Waco and Temple for more than a decade now. Marlin already has public prison units; a private prison is going nowhere. The state's juvenile prison system is a clusterfuck; it needs large-scale communal type facilities near larger cities, but it's nowhere near getting ready to do that.

Marlin as the home of a possible real estate frenzy sounds kind of funny. The home of a possible real estate bubble that collapses soon enough sounds, per Marx, like farce first, tragedy second. These people deserve better from anybody who has ideas of a real estate frenzy, whether the bidders are coming from Houston or possibly elsewhere on I-10.

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