More fun with finance

Ed Blakely is diverting $50 Million of the $300 Million in State issued bonds dedicated to infrastructure repair in order to purchase the land necessary for the new VA hospital. The buildings and land that house the old VA facility will then be turned over to the city as part of the deal.

This may or may not be a wise use of these funds. I'm certainly not criticizing the hospital project itself. But it seems here that Blakely is stretching his meager funding sources awfully thin. (Remember this is nowhere near the cash necessary to fund Blakely's grand 1.1 Billion dollar recovery vision wherever the hell that may be by this point.) It's also a bit risky since the money that goes toward repairing streets and buildings will (theoretically... eventually) qualify for FEMA reimbursement while the money spent on the new VA land obviously will not. But Blakely has a plan for recovering that $50 Million.

Blakely said the city will not lose money since the property it acquires, including the flooded VA hospital on Perdido Street and a nearby facility that did not flood, will be sold or leased. The sale or rental revenue will go back into the $50 million pool for city infrastructure needs, he said.

"They are giving us an old facility that did flood and a research facility that did not flood," Blakely said. He said the city has held preliminary talks with a possible occupant or buyer.

"The lease service will equal the cash flow we are taking out of the site," Blakely said.

Somehow that doesn't seem particularly likely to me. Maybe I'm picking nits here but despite Blakely's "preliminary talks" with an occupant, does that property strike anyone as being capable of generating 50 million dollars in any kind of short order? Maybe if it were converted into one big super condo-coffee-sushi-spa-gelateria complex they'd be on to something... but then they'd have to move it all over to Magazine Street and I doubt FEMA reimburses for that either.

Update: Mominem has something interesting in the comments:

If you look at the currently proposed site plan for the VA you will see it includes a portion called "City Hall Annex Redevelopment Site", which does not appear to be part of the VA. That site was sold in October 2006 to a partnership that includes Cesar Burgos, the president of the Regional Transit Authority board, according to the TP.

Fun with finance, indeed... although I'm not really sure what this could mean either.