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Friday, February 17, 2012

YMCA Camp price is based on a fairy tale

Review of Appraisal Shows Charlestown Got Hosed 
By Will Collette

On Thursday afternoon, February 9, just days before the fateful February 13 Town Council meeting, the town posted all the documents on Clerkbase that supported the expenditure of $475,000 of Charlestown taxpayer funds to acquire the derelict YMCA Camp on Watchaug Pond.

The lengthy collection consisted of many documents comprising several hundred pages of hard copy. This collection included the overall proposal, the funding proposal to RIDEM, the Purchase and Sales Agreement, the Conservation Easement, which was what Charlestown was actually going to be buying, and the newest and last appraisal of the land.

That final 74-page appraisal, dated January 19, 2012, pegged the value of the land at $735,000, making the final sale price asked by the YMCA of $730,000 a “deal” with a $5000 discount.

Charlestown Land Trust leaders, especially CLT Treasurer Russ Ricci, constantly referred to this appraisal to support their argument that this was a good financial deal for the town.

But this appraisal is actually a fairy tale. It should have started out with the words, “Once upon a time in Charlestown…”

The “new” appraisal is not new at all. Yes, there are new cover pages, and a new date. The appraiser also claims he walked the land on January 19, 2012. But the actual content of the appraisal is based on assumptions that are now invalid and inflate the price over its true value. The appraisal is written as if it was in support of Ted Veazey’s conservation development proposal, which was KILLED by the Town Council on May 9, 2011.

The appraiser writes “I assume the estimated highest and best use and value are unaffected by any restriction, encumbrance or impairment due to construction, design specifications, zoning, topography, geology, wetlands, environmental condition, waste or hazard.” (Appraisal, page 7)

He then presents this set of hypothetical conditions that he used to price the land (page 7):
 The $735,000 appraisal price is based on the following assumptions:
1.      Rezoning the land as residential
2.      Building a 10-home residential development on it
3.      The land is not covered with derelict buildings
4.      The land contains no liabilities for clean-up and remediation

All of these assumptions are simply fictional. Or, as the appraiser put it, "known to be false." In this instance, however, the hypothetical is not only "known to be false" but is totally ridiculous. There is no basis for using the land as if it were re-zoned for a residential development as “the highest and best use.” The Town Council already made it impossible for the land to be developed when it trashed Ted Veazey’s proposal last May.

The appraisal value is based on something that CAN’T HAPPEN. The appraisal is presented as an exercise in “Let’s Pretend.”

When the Town Council rejected the zoning change needed for the Veazey proposal, that decision left the YMCA with land it could not sell, not with land ripe for development. That alone substantially reduces the property’s value in the real world we live in, never mind all the other false assumptions about the environmental problems and clean-up costs.

The part I REALLY don't get is where the appraiser says he assumes conditions he knows are untrue (or in this case, impossible) "for the purpose of a reasonable analysis."

If you read through the whole appraisal, you will see repeated references to the subdivision proposal that Ted Veazey had hoped to build. This appraisal was clearly written as if it was about THAT project which was rejected almost a year ago, and not the land use the Town agreed to pay $475,000 for on February 13.

Last Monday, the YMCA and the Charlestown Land Trust stood before the Town Council and the people of Charlestown and presented an appraisal that was fictitious – a fraud.

Perhaps they feel they have some good justification for the inflated price, beyond making a fine “donation” to the YMCA. If so, I claim that the citizens of this town deserved to know about the inflated price before the Town Council voted their approval of the deal.

I firmly believe they would have heard even more pointed comments from the audience had it been clear that we were paying development land price for land which has had development zoning rejected.

Charlestown taxpayers really did buy the Brooklyn Bridge on February 13.

I have placed a call to William Patrick of the Appraisal Resource Group asking for comments on the appraisal, but as of this writing, he has not returned my call.

Despite the 3-1 Town Council vote to approve a Charlestown taxpayer contribution of $475,000, the deal must still be reviewed and approved by Charlestown Town Solicitor Peter Ruggiero. I hope that he reads the appraisal and sees it for what it is.

[Editor's note: my thanks to Mike Chambers for his suggestion about using the line "Once Upon a Time in Charlestown."]