PATH is holding a fire sale this month on all those abandoned properties it purchased nearly 10 years ago. Need a gigantic farm property that's not zoned for an electric substation?
How about a nice vacation cabin in West Virginia that's been sitting vacant and rotting for years?
Or perhaps you're in the market for a big lot in a very exclusive Loudoun County, Virginia, subdivision and you don't mind having high voltage transmission lines running through the middle of your property?
Then don't miss these PATH absolute auctions on August 22 and August 23!
Finally, 5 years after the PATH 765-kV transmission line project was officially abandoned by PJM Interconnection and the PATH companies, the property PATH bought with your money is being auctioned off. PATH has been marketing some of these properties for years, with no takers. What kind of a property is marketed for 5 years with no offers? What's wrong with these properties? Buyer beware!
While actively seeking to build the project between 2008 and 2011, PATH purchased outright around $30M worth of real estate to be used as future substations and right of way for its transmission project. Each property has some story attached that serves as an excuse for purchasing it way above its market value at that point in time. Need an ending point for your project? Purchase a farm zoned agricultural and then set about battling the county about re-zoning it. Need to have a conservation easement lifted? Purchase a bunch of property near the easement and then hire lobbyists to influence the governmental entity that holds the easement to release it. See an opportunity property where the owners are struggling financially? Purchase it now and worry about how you may use it later. After all, it's not YOUR money, it's coming out of electric ratepayer wallets, and you're earning a big fat return on every dollar you spend.
How much return? Well, initially, 14.3%, later 12.9%, later still 10.9%, even later 10.4%, and finally, 8.11%. As long as you own those properties, you may collect the corresponding return on your investment from ratepayers.
But when you sell the properties, you must credit the sale price to your unpaid balance upon which the return is calculated. For example, if the balance of your investment is $100, and you sell a property that is included in that balance for $5, then your new balance is $95. An 10% return on $100 is $10. A 10% return on $95 is $9.50. So, by holding onto your properties as long as possible, you will collect the maximum amount of return. So it really wouldn't help your profit margin to sell these unneeded properties quickly. You must hold on to them until the rest of the ratepayer debt is paid and a regulator orders you to dispose of them, then auction them off at fire sale prices and make the ratepayers pay all the auction and commission expenses off the top of the credit they will realize from the sale of property. And then you can hope the ratepayers don't find out about it.
Whoopsie!!!
So, for all those PATH opponents who have been living in suspended animation for the past 5 years wondering if PATH was going to dream up another project to use those properties for a transmission line, you're released from your continuing torture. The PATH companies are finally going away and won't be using the properties for a future transmission project. Now you only have to worry about what a new owner may do with the properties. And how much you ultimately paid, of course. Creative accounting, and feigned uncertainty combined with a failure to effectively market vacant property, will squeeze the last possible penny out of your wallet.
PATH... the gift that keeps on taking.
How do these guys sleep at night?
Finally, 5 years after the PATH 765-kV transmission line project was officially abandoned by PJM Interconnection and the PATH companies, the property PATH bought with your money is being auctioned off. PATH has been marketing some of these properties for years, with no takers. What kind of a property is marketed for 5 years with no offers? What's wrong with these properties? Buyer beware!
While actively seeking to build the project between 2008 and 2011, PATH purchased outright around $30M worth of real estate to be used as future substations and right of way for its transmission project. Each property has some story attached that serves as an excuse for purchasing it way above its market value at that point in time. Need an ending point for your project? Purchase a farm zoned agricultural and then set about battling the county about re-zoning it. Need to have a conservation easement lifted? Purchase a bunch of property near the easement and then hire lobbyists to influence the governmental entity that holds the easement to release it. See an opportunity property where the owners are struggling financially? Purchase it now and worry about how you may use it later. After all, it's not YOUR money, it's coming out of electric ratepayer wallets, and you're earning a big fat return on every dollar you spend.
How much return? Well, initially, 14.3%, later 12.9%, later still 10.9%, even later 10.4%, and finally, 8.11%. As long as you own those properties, you may collect the corresponding return on your investment from ratepayers.
But when you sell the properties, you must credit the sale price to your unpaid balance upon which the return is calculated. For example, if the balance of your investment is $100, and you sell a property that is included in that balance for $5, then your new balance is $95. An 10% return on $100 is $10. A 10% return on $95 is $9.50. So, by holding onto your properties as long as possible, you will collect the maximum amount of return. So it really wouldn't help your profit margin to sell these unneeded properties quickly. You must hold on to them until the rest of the ratepayer debt is paid and a regulator orders you to dispose of them, then auction them off at fire sale prices and make the ratepayers pay all the auction and commission expenses off the top of the credit they will realize from the sale of property. And then you can hope the ratepayers don't find out about it.
Whoopsie!!!
So, for all those PATH opponents who have been living in suspended animation for the past 5 years wondering if PATH was going to dream up another project to use those properties for a transmission line, you're released from your continuing torture. The PATH companies are finally going away and won't be using the properties for a future transmission project. Now you only have to worry about what a new owner may do with the properties. And how much you ultimately paid, of course. Creative accounting, and feigned uncertainty combined with a failure to effectively market vacant property, will squeeze the last possible penny out of your wallet.
PATH... the gift that keeps on taking.
How do these guys sleep at night?
RSS Feed