More on "Duke" and Shady Real Estate Holdings
I've always wondered how much you can trust a grown man that calls himself "Duke." If you live in Texas or the Central Valley, maybe. But San Diego? It's not like my hard and fast rule that you should never trust someone with "the" as part of their name (like "Vinnie the Snake" or Mark the Meat Cleaver). More like a grown man that still goes by "Bobby." There's just something strange about it.
Unfortunately, Randy "Duke" Cunningham is doing his best to clear up this question for me. Sunday the UT reported that a defense contractor purchased Rep. Duke's house in Del Mar. Eight months later and after never occupying it, they sold it for a $700,000 loss despite San Diego's searing real estate market. A spokesman said they bought the house because they were "looking at expanding our company presence in San Diego." Yes, because if you are a company from Virginia with zero operations in San Diego, purchasing a home in a residential area of Del Mar is the way to do that. You wouldn't want to get - for instance - an office maybe? And if you want to expanding your presence, why did you put the house back on the market "almost immediately."
Even if we assume that MZM did want to raise their profile, isn't it a little coincidental that of all the houses in San Diego, they ended up purchasing one from a member of the defense appropriations subcommittee? I mean, I just did a quick MLS search and in Del Mar alone (a relatively small area) there are currently 78 properties listed. MZM bought the house in November so there would be fewer on the market. But still, that seems pretty coincidental (especially when there are thousands of homes listed in greater San Diego at any one time).
Then today brings another damning story from the Union-Tribune. The realtor who put the value upon the house is a Duke campaign donor who also helped him purchase his new house. That in and of itself is not so damning. You would expect Duke to work with those who have helped him in the past, and to purchase a new house with someone who helped him sell his old one. That is how these sorts of things work.
What does seem to be damning is that the price was set based upon comparable prices in the area. Then it was sold it sold at the highest level with MZM never sending over an appraiser or getting other opinions. You would think a government contractor would know the value of getting three bids - unless of course their purpose was less real estate investment, more congressman enrichment.
Homes in the area appraised for between $700k and $1.7 million. Dukes friend/client/donor valued his home at $1.675 million. Real estate was increasing at about 20% a year at that point, yet when they finally sold the house 8 months later they managed to lose 40% on it. Is there any question the realtor gave a faulty value and that MZM failed to substantiate it? I don't see one. A local Realtor quoted by the UT says, "A $700,000 loss would be unheard of, and anyone who bought property in 2003 and held onto it for any period of time should have made a significant amount of profit."
incidentally, it seems an enterprising investigative journalist with access to the MLS listing and home specs and sale prices should be able to approximate the true value of the home at the time. That could be the true dagger to Duke. I'm sure that will be coming up in the UT before long - its good business to string these things out even if you have the info.
So MZM's president is not available for comment. Duke may be better off if he did the same. Asked about the sale Duke said "And I don't know about you but, when I had a house in Clairemont, when I had one in Mira Mesa, I just tried to get the most out of the house that I possibly could, and I bet you would, too. " Well, that depends what trying to get the most out of the house includes. If it means fixing it up and playing hardball with buyers on the price, yes. If it means selling it at what appears to be a grossly inflated price to a party who subsequently gets tens of millions of government contracts when you are on a committee that decides on that sort of stuff.......Well, then NO, I don't know that everyone else would do the same thing.