Hey, hey. A golden oldie. The transit oriented development the city has been trying to secure for a 17-acre parcel next to the South Blvd. choo-choo for three years now is in trouble. Again.

When we last left this soap opera, the city had agreed to sell the parcel to Pappas Properties for $5.19m. — having spent $9.27m. to acquire it. That price was itself a discount from the original agreed-to sales price of $7m., which the city knocked down because of “soil conditions” which Pappas claimed made building on the site more expensive than thought.

So far, so good in terms of city development schemes. Pappas was willing to build what the city wanted — 80 units of “affordable housing” — that’s all that mattered. But a funny thing happened. Reality.

Pappas now claims that it cannot afford to pay the $3.3m. the current deal requires be paid by the end of next month. It wants to knock that number down to $2.2m. and pay the difference next February. See a pattern here?

Oh, and note that the $12.3m. in taxpayer money — a straight up grant to induce Pappas to redevelop the old Charlottetown Mall site in ways city staff desired — has yet to enter the conversation. It should.

Pappas should not be allowed to pocket any of that Midtown money at the same moment that it pleads poverty on the Scaleybark deal. In addition, if the city is being asked to make a 12-month bridge loan to Pappas, the city should receive interest on that loan. Commercial rates of the kind Pappas presumably pays on non-subsidized projects are around 6 percent. State and local governments, however, have been offering these kinds of loans at between 3 and 4.5 percent for a year.

The fair and fiscally sane response to Pappas’ request to re-write its agreement with the city should be clear. Apply any Midtown tax-rebate money due Pappas to the $1.1m. the firm proposes to short the city, and finance the balance, if any, at 4 percent, due in full on February 28, 2010.

Any questions?

Hat tip Rhino Blog.

Update: Whoops. One of the new Midtown development’s anchors — Home Depotis closing. Only open since October 2007. Another Official Development scheme lies in ruins.