In the coming months, California’s 427 Successor Agencies will need to sell the estimated 5,000-6,000 property assets as part of post-compliance with the requisite dissolution of Redevelopment Agencies mandated by AB 1484. Real estate and economic development advisory firm Kosmont Companies (Kosmont) has formed a partnership with Auction.com to help Successor Agencies evaluate and sell post-redevelopment properties.
“As far as we know, there has never been a public property sale of this magnitude by any state or local agency in the history of the United States. There have been lots of land sales by public agencies, especially by the federal government, but in recent history as far as I can see there has been no set of transactions set up statutorily to sell public assets in what amounts to be a public agency liquidation sale,” said Larry Kosmont, president and CEO of Kosmont Companies.
In addition to the magnitude of the number of assets, many of the properties have unique specifications or challenges that may make selling the properties challenging. “This is not a typical ‘I’m buying the best house on the block’ acquisition program. These are properties that in many cases were bought because they may have issues of zoning, irregularities, or were a part of the future vision for the broader overall revitalization of sites and land,” said Mr. Kosmont.
As expert advisors guiding Successor Agencies through the redevelopment dissolution process, Kosmont sought to devise a way to create a streamlined, fair way for agencies to get the best price for the properties they are required to sell. Because AB 1484 requires a liquidation of property and does not require agencies to follow usual RFP protocols, collaborating with Auction.com presented an opportunity to create an ideal solution for many of these properties. With over $20 billion worth of property sold since 2007, Irvine-based Auction.com provides a technology platform for an open marketplace where buyers enjoy maximum transparency and efficiency in transactions. All buyers are given the same information and can easily track the status of their bid.
It also provides multiple benefits for the Successor Agencies. Auction.com has the potential to draw a far larger number of potential buyers who may be interested in irregular or challenging properties, including international owners and investors who may not usually pay attention to the sale of public land. The larger pool will likely result in more competitive bidding, bringing greater proceeds to the state, the Successor Agencies and the local agencies who lost tax increment when Redevelopment Agencies were dissolved. Auction.com boasts a closing rate over 90%, with bidders being pre-qualified. Sales are completed with a quick turn-around time, usually within 30 days.
Kosmont will serve as facilitator of the sales while Auction.com will serve as the marketplace. To learn more about Kosmont’s redevelopment dissolution services, click here or contact Larry Kosmont at lkosmont@kosmont.com.
