By Tim Redmond : 48hills – excerpt
Michal Barba, who is a good reporter, broke the story first in the SFStandard: Recology may have overbilled San Franciscans for even more than the $95 million the company has had to pay back as part of the ongoing City Hall scandal.
Other news outlets have picked up the story, but nobody has explained exactly what went on here, and how Recology could be on the hook for a lot more money.
There are two major factors at play here, and both of them show the problem with a single company operating as a City Charter-sanctioned monopoly with a perpetual no-bid contract—and of late, at the Department of Public Works, little to no oversight.
The way the current system works—and Sup. Aaron Peskin is trying to change that—Recology never has to submit a competitive bid. Instead, like PG&E, another government-sanctioned monopoly that has more than its share of problems—the city is supposed to closely regulate its rates…
Then there’s this piece of property that Recology sold to Amazon. It’s at the foot of Potrero Hill, and the company doesn’t need it any more. It’s a big piece of land, and at one point Recology wanted to develop it for housing. Instead, Amazon bought it for $200 million and plans to turn it into a new distribution center.
Recology has owned it since 1971. Right before the sale, Assessor’s Office records show, it was assessed at about $3 million; under Prop 13, that means Recology paid a bit less than that, probably about $2 million, for it 50 years ago.
So there’s a good bit of profit here—like, almost $200 million.
Who gets that money?…(more)