Blogging Bayport Alameda

July 26, 2011

I have to appraise you like I should

Yesterday, I wrote about my concerns about the proposed Mif Albright land swap.  At the City Council meeting, the direction was to negotiate further with Ron Cowan to come up with a better plan.   However, if they are going to be starting from the land appraisals that were done for the two properties then the City is already coming in at a disadvantaged negotiating position.

The City commissioned two appraisals to gauge the potential land value of the Mif Albright site and the North Loop site.   The appraisals generated the following potential values to the two sites:

Mif Albright: $9,150,000

North Loop: $8,790,000

Here’s the problem with the North Loop assessment: the value was based on entitling the property for 112 residential units.   So you may be thinking, but wait, didn’t Ron Cowan try that already and faced huge opposition and therefore has a zero likelihood of houses ever being placed on the property?   Not to mention the fact that the parcel is right in the landing path for Oakland Airport?   Yeah, me too.

So that price is waaaaayyyyyyy overvalued if you ask me.   Although I am not a professional appraiser.

The appraiser notes in the document that if the site was considered for business park uses — which it currently is — then the value would be $8 million even.   Somehow, given the current state of the economy and the high number of commercial vacancies throughout Alameda, I think this is fairly high as well for the North Loop site as well.

While the City should take these appraisals into consideration, by no means should they be used to justify any substandard deal that might result from swapping one clearly inferior site for a much superior one.

Interestingly enough, the appraisal uses the Neptune Pointe auction as one of the comparables for the site.  If anyone was interested, the auction was actually extended for a few weeks and the eventual winning big was $1,800,000 for the property.

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11 Comments

  1. So despite the obvious manipulation of the appraisals, do we help out the local developer with the heavily mortgaged health club in town ( but who could not get the financing for anything other than a land swap from any bank) who contributes heavily to local politicians like Johnson, or do we do what’s right? That’s a tough choice….

    Comment by Make it go away — July 26, 2011 @ 6:54 am

  2. “I wanted to circle back around…”

    How long is this circle jerk going to last?

    Comment by Jack Richard — July 26, 2011 @ 8:13 am

  3. The kicker for me is that the city will not get paid, til Cowen or whomever he sells land to build homes.
    Now that’s a bum deal.

    Comment by Meme Suz — July 26, 2011 @ 11:36 am

  4. Appraisals are based on what people are willing to pay for property. If under the current appraisal, Ron Cowan can get $8,790,000 for the North Loop property, he should sell that property to another entity and give the cash to the City for the appropriate appraised value for the Mif (maybe half of the 12 acres).

    Comment by Dan — July 26, 2011 @ 11:38 am

  5. On any evaluation of an appraised value for a property you first have to identify, are you buying or are you selling? It is like asking someone today their opinion on raising the debt ceiling, you first have to ask are you a republican or a democrat? Once you establish the motivation of the party (buying or selling) then the focus should be on the appraisal instructions. For example: What is the highest and best use? What is the most likely use given the current zoning? Is there potential of contamination on the property? These along with a dozen other questions will frame the assumptions of value which levels the playing field between the buyer and the seller. Any transaction involving public property should go through some additional hoops because of the fiduciary responsibility of the City Council and staff on the disposition of public lands. As someone has stated before, this will be a good test for our new City Manager and Mayor as to just how “transparent” they are relative to a public-private transaction.

    Comment by fergus jones — July 26, 2011 @ 12:37 pm

  6. This new mayor, city manager and council seem to be more transparent than the former administration. We would never have seen the actual appraisals or be able to discuss in open Ron Cowan’s desire to swap private lands for his private gain under AMG, as Joe Van Winkle satired in his poem. Let’s hope there’s no backroom deal between Cowan and Russo that was rumored to be between Cowan and AMG.

    Comment by David M. — July 26, 2011 @ 1:19 pm

  7. Was there only one appraisal? The city might want to compare at least two maybe three appraisals before a final
    decision is made.

    And I’m curious about the appraisal for the “fully entitled MIF”. I don’t remember seeing a development plan
    for the 112 homes; so what development plan was appraised?

    Comment by Karen Bey — July 26, 2011 @ 1:19 pm

  8. We are offering 4600 Square foot lots at golf course to Ron at 119-120K ……

    The apprasier came in at 77k a lot……So you know that was on up and up…..

    Same appraiser Valuing Same size Lots on Harbor Bay at 67K for the Land.

    Reality check

    More on Cowan

    “He defaulted on the Lehman Brothers loans, which had grown to $43.1 million, including interest, property records show. The investment bank and SRM Associates, its property management partner, promptly seized much of what Cowan still owned at Harbor Bay Business Park. His companies now own only about twelve acres of the 350-acre park, Cowan said. ”

    Now he wants to trade those twelve acres for Golf Course Property….I’m sure its a great deal for the City. Lets toss in City Hall also… Maybe some waterfront Point acreage to make sure he doesn’t get hosed.

    “Road to Nowhere
    The FBI probes links between state Senator Don Perata and a $40 million roadway project designed to enrich Alameda developer Ron Cowan

    They also shed light on how taxpayers ended up footing an estimated bill of $40 million for a road that was essentially designed to benefit one man — and in the end didn’t even do that. ”

    http://www.mikemcmahon.info/cowan.htm

    Comment by John — July 26, 2011 @ 6:25 pm

  9. Another “assessment” question that has yet to be answered:

    Would any of the changes that Ron Cowan/HBIA propose for the redesigned and shorter South Course actually IMPROVE that course for golf?

    Not being a golfer I am in no position to evaluate any of the changes I hear and see discussed, but I certainly have not seen any groundswell from local golfers saying that they cannot wait to play the new and redesigned South Course instead of the current one….

    Safety could also be compromised with 18 shorter holes compressed into a smaller footprint in order to fit a new (albeit bigger) Mif Albright course into the reduced acreage.

    I’d love to hear from golfers who have played lots of rounds at the Corica complex about the prospects for golf in the Ron Cowan proposal’s redesign…

    Comment by Jon Spangler — July 26, 2011 @ 10:04 pm

  10. My lot (not including building improvements0 is tax assessed at close to $300k and I am not on a golf course…or in the most desirable areas of Alameda although I like where I am. Those lots are worth a lot more than $77k. We don’t owe Ron Cowan anything, why does he what this swap…because it is good for him.

    Comment by Joe — July 26, 2011 @ 11:47 pm

  11. 9

    The redesign of the golf course is a joke. We will need to add a few more City Attorneys just to handle personal injury lawsuits due to safety. Of course we can give everyone whiffle golf balls and relocate the golf course to a hanger at the point and sell off all the land to Ron Cowan for two bottle caps and all the change in the library couches.

    Comment by John — July 29, 2011 @ 10:02 am


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