Audit of real estate transactions in the city

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Building 101 Ash St. / Photo by Adriana Heldes

This post originally appeared in July 23 morning report… Get morning report delivered to your mailbox

BUT city ​​audit Published late Thursday night, it found that the acquisition of real estate overseen by former mayor Kevin Falconer suffered from insufficient due diligence, incomplete disclosure to the city council, and a lack of clarity about various responsibilities, resulting in increased costs and underutilization of property.

City audit covering Disaster at 101 Ash Street scandalous city purchase of an indoor skydiving facility in the city center and three other deals – the City was found not to follow best practice and did not establish who was responsible for various tasks, including property checks.

“Overall, we found that a serious lack of policy and oversight resulted in the city skipping or missing key steps in the acquisition process and allowing the previous city administration to miss or misrepresent key building acquisition information when it was submitted to the city council. and the public, ”the auditors wrote.

Among the errors documented during the audit: the auditors found that the city often did not request an independent pre-acquisition assessment or did not carry out the asbestos inspections required by city policy.

The release of the report follows the city’s actions on cancel the 101 Ash and Civic Center Plaza lease after it became known that City Real Estate Counselor Jason Hughes, allegedly a volunteer, was paid $ 9.4 million for his work on deals.

The auditors concluded that, under the city’s conflict of interest code, Falconer’s former chief of staff should have documented Hughes’ responsibilities and advised him whether to file official city statements. Auditors argued that Hughes was supposed to have a formal contract with the city.

Falconer and the city’s former real estate director did not attend interviews with the city’s auditors, despite their requests.

The auditors also argued that city prosecutors were unable to consistently point out the legal risks to the city, especially with regard to the 101 Ash lease deal with ownership – a finding that City Attorney Mara Elliot challenged in her response to the audit.

“The audit overlooks that the former city attorney, like the council, had no reasonable reason to raise red flags in approving the 101 Ash deal,” Elliott wrote.

To avoid mistakes in the future, city auditors have called for several reforms, including a new section of the municipal code to ensure compliance if the city cannot accurately submit information to the city council, creating best practice and due diligence checklists for acquisitions and developing a strategic plan. urban real estate, among others other recommendations.



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