| County Fiscal Chaos Attracts Carpetbaggers |
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| Thursday, 03 March 2005 | ||||
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This news woke us up because Warren Buffett, renowned investor and Chairman of The Buffalo News, is from Omaha, as well. Also, Buffett sparked renewed interest in REITs by investing in several of these trusts a few years back. He is not a shareholder in Government Properties, however. Last month it was announced that Opus Group, a real estate company with some ties to Omaha, would partner with the local Uniland Development to develop the Buffalo waterfront parcel controlled by the NFTA. Opus CEO Mark Rauenhorst sits on the Board of Directors of Omaha-based ConAgra foods with Warrens son Howard G. Buffett. Is it coincidental that these two firms from Omaha appear to be entering the downtown Buffalo real estate market at the same time? If the legendary investor is using his personal influence to bring these groups in, (an admittedly unlikely scenario despite the coincidences) could that be a good thing for downtown? From this vantage point the answers to these questions appear to be yes and no. Yes, its unlikely that Buffett is plotting an Omaha beachhead. And no, the proposals of both of these firms do not appear to be very good at this point. In the News article, County Executive Joel Giambra pointed out that the building leasebacks which Government Properties Trust has proposed for some County buildings would probably cost taxpayers more money in the long run. Of course, County government is in a state of collapse after lawmakers failed to raise taxes to balance the budget. The one time revenue of the Countys share of the Tobacco settlement money is gone. Leasing back the County buildings might ease the pain, but it will not forestall the inevitable. Still, beggars cannot be choosers a fact to which our perennially barefoot and pregnant community can attest. Perhaps the most noteworthy member of Government Properties Trust Board of Directors is Robert A. Peck. Mr. Peck should know a thing or two about the leaseback of government buildings because he oversaw the privatization of leasing for the U. S. General Services Administration under the Clinton Administration. In a 1996 press release on the topic he was enthusiastic, we have awarded contracts to private sector commercial brokerage firms in two of our eleven regions, have begun a solicitation process for multi-regional commercial broker services contracts, and have been providing choice and flexibility to agencies by delegating leasing authority. Now, that hes passed through the revolving doors of government Mr. Peck can presumably do bushels of business, in a field that he helped create. Hes probably made a few friends in government and in business along the way. Ironically, just as Pecks company swoops down into Buffalo like the Peregrine falcon of McKinley Square, the current GSA released a study which shows government building leasebacks involving local firms can help downtown economies. Of course, if a government building is mothballed before construction is even completed, as will be the case with the Countys new public safety building, the pressure will be on to sell it to somebody. How about another Bass Pro? Or maybe a new casino?  By John McMahon
A recent business item in The Buffalo News revealed that Government Properties Trust, a publicly traded Real Estate Investment Trust (REIT) based in Omaha, NE has expressed interest in purchasing several government buildings in downtown Buffalo and leasing them back to the government.
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