Economic Development

Next Up: City Hall?

The surplus items governments sell online go far beyond copiers and cop cars.
by | January 2004

The most recognizable landmark in Allen Park, Michigan, is an 80-foot-tall Uniroyal tire, and for the past five years that tire has had an 11-foot steel nail sticking out of it. The display is pure corporate kitsch ("Takes on Nails," declares the slogan on the hubcap), but the tire has sat alongside I-94 long enough for the locals to grow fond of it. So when Uniroyal retired its tough-as-nails promotion last fall and gave the 250-pound nail to the city of Allen Park, local officials did what millions of Internet-savvy people do with such valuable junk: They sold it on eBay.

The giant nail fetched $3,000 when it sold in October. The buyer, a local real estate agent, is so proud of his purchase that he plans to tow it in Allen Park's Memorial Day parade this year. City leaders are elated, too. The money will go toward renovating a building for the city historical society. They have only one regret: that they didn't set their "Buy It Now" price higher. "I wish we'd put it at $5,000," says city administrator Kevin Welch. "On eBay you can sell anything. I could sell the coffee cup sitting in front of me if someone were interested in buying it."

State and local officials have been auctioning off government surplus over the Internet for a few years now. These days, however, it's not just humdrum office furniture that's zooming off the online lots. Sellers are unloading a growing number of bizarre items, things like old fire trucks, scoreboards and lighthouses. The only thing more striking than some of the oddball objects state and local governments are hawking online is the large sums people are willing to pay for them.

Washington State, for example, recently auctioned a passenger ferry over the Internet for $560,000. Montgomery County, Ohio, sold a solid waste landfill tipper for $206,000. And Tennessee unloaded 16,000 pounds of mussel shells, the byproduct of a state wildlife resources agency project. State surplus officials expected a jewelry maker might buy the shells for $4,000 at the most, but a bidding war broke out in the final minutes of the auction. The lot sold for $25,000.

Whether they build their own auction Web sites, as Harris County, Texas, has done, or use commercial sites that charge commissions, such as eBay, GovDeals or Bid4assets.com, government sellers are finding they generally get better prices when they sell online. Tennessee recently analyzed sales of one rather ordinary surplus item--passenger cars--and found that online auctions were netting 47 percent higher prices than live auctions did. "Selling online expands your audience," says Brenda Grant, director of property utilization for the state dept of general services. "We get bidders from Florida, Washington State and California. We're getting better competition and better prices."

It's not just big-ticket items turning up online. Steve Westly, who as California's controller is responsible for all the random knickknacks people leave behind in bank safe deposit boxes, has begun auctioning off some of the unclaimed property on eBay. Westly, who is himself a former eBay executive, sold several watches, vintage coins and a diamond ring in December. The proceeds are to be kept in trust until the owner or an heir claims them.

Likewise, police departments are using online auctions to empty out their property rooms. The typical police property room is like an overstuffed attic, filled with stolen and seized merchandise whose rightful owners can't be found. Some 300 police departments, including those in New York, Los Angeles and Seattle, are now unloading the loot on a site called propertyroom.com. On a recent day, the "hot pursuit specials" included a snowboard, a pair of goose-down comforters and a case of 159 compact discs. "We get quite a range of stuff--power tools stolen from construction sites, car stereos, bicycles, electronics, computers, jewelry," says Tom Lane, a former NYPD detective who runs the auction company. "Anything that can be stolen will wind up on our site."

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