Our opinion: No refunds, no exchanges
Real estate speculation is fraught with risks.
Just ask any of the thousands of residential developers and builders who were stuck with weedy empty lots complete with full utilities after the real estate bubble burst a half dozen years ago.
Just ask Ruhzdi Bakalli.
Mr. Bakalli speculated that he could entice builders and then buyers to develop the site of the former Home Street School into a nice, middle-income neighborhood of cozy homes. In the process, he would reap the profits.
After all, that’s what real estate speculation is all about. That’s what entrepreneuership is all about. You come up with an idea, you weigh the risks, run the numbers, and you roll the dice.
For the Home Street Estates, the ivories came up snake eyes, craps.
Bakalli bought the property from the City of Warren for $10,000, a pretty good deal for prime residential property capable of supporting a a dozen or so houses in the $75,000 to $100,000 range. There was a school to demolish and land to prep, but that cost was about $67,000, still leaving a tidy profit if the plans panned out.
Now the Redevelopment Authority, which recommended the sale, is disappointed it put its trust in a verbal pledge that the land would be developed long before now.
Neighbors of the property are disappointed that the empty lot, while not an abject eyesore, is hardly what they expected.
And, of course, like anyone who has watched a project fail, Mr. Bakalli is especially disappointed, having apparently wasted his investment.
However, in an effort to assuage his disappointment, he is willing to “give” the property back to the city, if the city pledges to compensate him for his losses, less $14,000 he has received from two lots that were actually sold, in total, about $63,000. He would agree to take his money from any the city might realize if it succeeds in finding another entrepreneuer willing to purchase the property.
Mr. Bakalli is no stranger to the concept of public-private partnerships, having relied on millions of dollars in state grants to facilitate other development projects with varying degrees of success.
In essence, Mr. Bakalli would like to walk away from Home Street and is asking the city to cover his losses.
We don’t think government should put itself in the position of guaranteeing venture capital, especially after someone admits they miscalculated.
Neither the city Revelopment Authority nor City Council have yet responded to Mr. Bakalli’s proposition.
May we suggest this one: We’ll take the land back, Mr. Bakalli, but we’re not going to pay you for it. Thank you for your efforts, and if you’d like to keep trying, we wish you luck. In the meantime, please keep the weeds down.