You may have noticed TrueHoop's mention of Aubrey McClendon's latest (proposed) real-estate transaction involving the Saugatuck Dunes in Western Michigan.
At first blush, it's a relatively minor story - rich guy buys some land, gets into dispute with locals about his plans to build McMansions, sells off a chunk of the land, goes about his way. But, if one digs just a touch deeper, you can see that it's not as simple as it first appears.
You see, McClendon tried to sell this land previously ... and failed. Back in December, a tentative deal was in place to sell 171 acres of his more than 400 acres to the Saugatuck Township for $25 million, but the locals were unable to procure a grant from the State of Michigan that would have gone a long ways towards the purchase.
Now, 10 months later, McClendon is selling the property for $20 million, or $5 million less than he thought he'd get last year. And, it is important to note, that sale is still contingent on the Saugatuckians (?) getting a state grant and quite a big chunk of private funds, although they seem to think the money will be relatively pain-free (but, given the state of Michigan's economy, even the optimists are hedging their bets).
[Of further interest, McClendon purchased all 412 acres for the sum of $38 million in 2007, which works out to roughly $92,000 per acre. The lands he plans to sell now for $20 million total 171 acres, or roughly $116,000 per acre - a nice return on investment even at the steeply discounted price. That Aubrey - he didn't get rich by luck.]
And, of course, there are the ongoing legal complications involved. McClendon is refusing to pay property taxes on the land because he feels that the locals over-estimated the value of his land, and because he's irked that they re-zoned the land and changed the density from 1 home: 1.5 acre to 1 home:5 acres, essentially shrinking his number of possible homes from 300 to 80.
Essentially, Aubrey McClendon has, yet again, woven his own peculiar brand of antagonistic wizardry, creating a situation wherein the local residents detest him, while at the same time devaluing his own asset to the point where he has to take drastic steps to rectify a miserable situation.
Sound familiar?
The only difference is that the owner of the Sonix is not able to pack up the remaining land in the back of a moving truck and move it to Oklahoma City. If Aubrey McClendon wants to move forward with his plans to develop a passle of ridiculous mansions on those 241 acres, he's got to make nice with the local populace, something he has, to date, been either unwilling or unable to do.
5 comments:
The purchase of the South Denison is funneling development money to McClendon for the North. The south can not be developed so we are giving him $20 mil plus a huge tax break for nothing. Let's hope the state turns down the grant.
I suspected as much. If I had to place a bet, I'd wager the possibility of the state nixing the funding is greater than the supporters would lead us to believe, simply because the political backlash would be pretty great (i.e., giving a big wad of money to a billionaire when the state's economy is in the total). At least I hope so, anyways.
Program Objective(s):
The Michigan Natural Resources Trust Fund (MNRTF) has been in place since 1976. It provides financial assistance to local governments and the Department of Natural Resources (DNR) to purchase land or rights in land for public recreation or protection of land because of its environmental importance or its scenic beauty. It also assists in the appropriate development of land for public outdoor recreation.
MNRTF projects provide for natural resource protection and outdoor recreation. By law, no more than 25 percent of the Trust Fund revenues available for appropriation each year can be used for development, therefore the majority of funding is allocated for acquisition projects.
It is likely that the state will grant this project as it cannot be used for budgetary purposes, by law only for the original intention set up by the following
The MNRTF is supported by annual revenues from the development of State-owned mineral resources, largely oil and gas. It is governed by Article 9, Section 35 of the State Constitution and Part 19 of the Natural Resources and Environmental Protection Act, 451 PA 1994, as amended. The program is administered by the MNRTF Board of Trustees and the Grants Management office of the DNR. The MNRTF Board of Trustees meets six times a year and all meetings are open to the public.
check out the website for the Saugatuck Dunes Coastal Alliance to catch up on the most recent shenanigans of Aubrey McClendon-www.saugatuckdunescoastalalliance.org
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