Fox News (as in, the national network on TV/cable) latched onto this for the obvious reasons. People who occupy a variety of positions on the political spectrum believed that the property sold should be offered first to the people it was purchased from, a process which presumably would have left the Monorail Authority with more debt to unwind. I have no idea what kind of process they had in mind for offering it first to the people it was purchased from, whether they thought it should be offered back at the price it was bought from them, or whether that price should have been adjusted for inflation, or there should have been some sort of auction set up to set the price in the open market and then offered to the previous owner at that price or whatever. Needless to say, which was selected would have significant impacts to both sides of the transaction and to the lenders/taxpayers.
It's a weird situation that triggers "hard cases make bad law". But independent of that, I have to ask: what happened with all that property since then? The resolution wrapped up shortly before the bust, and we are only now getting into significant development. Some original owners were able to repurchase. At the time the article was written, people were complaining about the missed opportunity to increase parks/green space. The hope was that the shuffling would result in more jobs and more urban housing. Expect updates as I look into this further.
I just found out about all this when it came up in the context of a conversation about the use of eminent domain in general -- the concern was that land that was taken by the government might then be resold and that seemed wrong. I'd _never_ heard of that happening, but the person who told me the story is reliable, so I thought I'd track it down. The story does demonstrate the usual rules of recollection: the monorail did not figure in the story (even tho it was what was driving this project), and the date of the events was both uncertain and more recent than actuality. I've been running across that problem my whole life (my dad had this whole, "about five years ago", which usually meant more like 25, but always at least 10), but the financial crisis provides a truly excellent break point: no significant projects have been started fresh since then (only ones put on hiatus have been restarted, and not so many of those -- that's actually not true, a spec office tower went up in SF a while back) so I figured I had to go back before 2008, but probably not by a lot or I would have remembered it myself.
ETA: One of the properties Mastro bought which has since changed hands numerous times:
I think this is the one mentioned that Harbor bought in West Seattle, but if so it was built even bigger than originally planned:
And the location doesn't match this earlier coverage so I am confused. I don't know West Seattle that well.
Ah, it looks like the monorail piece turned into Mural: