City Could Bring a House to Market

By Dave Fratello | November 1st, 2013

In a city that's lacking for housing inventory, the Manhattan Beach city council may take a step next week that could free up one house to hit the market.

We've got no beef with the current city manager, and no dog in the fight over whether he's terminated next week or not, as local media are reporting:

The City Council will meet in closed session Monday to discuss [the city manager's] employment contract. The council agenda, posted Thursday afternoon, references a “public employee dismissal/release” and “public employee appointment” of an acting/interim city manager.

But if he is let go, what, then, becomes of his home?

Maybe you recall that the city helped its then-new manager buy his house, 2913 Pacific (3br/2ba, 1900 sq. ft.), back in early 2011. (See our post from then, "A Pricey Perk on Pacific.")

In a fit of generosity, the city paid half the $1.080M cost of the house, supplied a $65K renovation budget and provided a loan. The combined effect was to drive down the manager's monthly costs to $1,800/mo. for a newly redone home west of Sepulveda – and walking distance to work. The manager had put up $108K for his share of the down payment.

Here's the kicker to the deal: The city owns a 50% stake in the property. And if it sells, the city and its (possibly outgoing) manager are slated to split the profits.

To ballpark it, a renovated 3br and 1900 sq. ft. house, even on Pacific, could be worth $1.400M-$1.550M today on the public market.

So, if the city proceeds with the contemplated termination and the property hits the market, each party could profit nicely from a sale. After commissions, taxes and escrow costs, each side could clear $120K-$200K.

Admittedly, we're speculating here. A few things have to happen for this to all come to pass. It's the unusual nature of the original deal – a first for the city of MB – that raises the question.

At least we can all see that profits like that could soften the blow, if there is to be a breakup.

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