- Council Members Promoted False Doubling of Assessed Market Value of Properties
- Hardi and Duncan Were in a Position to Correct Errors. Why Didn’t They?
- Consultant Points Out Due Diligence Deficiency that Could Reduce the Value of the Site
By Sam Mabry
Mabry is a former Falls Church City Vice Mayor
Council Members Phil Duncan and Letty Hardi, each supported in local blogs that based on the sale price of the three parcels of property at the corner of North Washington and East Broad Street (shown on the pictured map), that the City could use the transaction as a benchmark, demonstrating that the GMHS 10 acres would be worth $50 Million–or $5 Million an acre.
According to City of Falls Church sale and assessment records, that information is untrue and was used by Duncan and Hardi in their blogs and comments, all too apparently designed to smooth the way financially for advancing a YES vote on the referendum.
It is well known that Duncan and Hardi are both deeply involved in the city’s economic development and apparently they don’t even know the assessed market value of undeveloped land in Falls Church.
The Wrong Steps Taken in Making a $50 Million Error
The City’s Economic Development Authority apparently used the gross sale price of $13.6 Million some two years ago for the three parcels on which there are improvements and divided that amount by the parcels’ combined 2.69 acres to achieve a value of $5 Million per acre. Then they multiplied the $5 Million by the 10 acres at GMHS to come up with the bogus to $50 Million value.
As you will note in the assessor’s documents, however, (which follow this narrative) the land value of the three parcels WITHOUT improvements (the buildings) is valued at approximately $2.5 Million per acre. Accordingly, using the actual assessed market value for this commercial property, the value of the 10 acres of open land at GMHS would be in the category of $25 Million–or some $2.5 Million per acre. And that estimate may be too high.
In that regard, the Broad and Washington development site already has trunk service lines in place–water, sewer and electricity–major streets providing access already exists., etc. It will take considerable financial resources to ready the GMHS site for development and that will ultimately impact the revenue return to the city. Also, according to university studies, the 10 acres will shrink. The street and sidewalks as well as all the utilities need a place on the site. The estimate is that 20% of any acreage for development will be needed for public use rights of ways. That will have a significant impact on revenue generation for the city.
Comparing Apples to Oranges and Coming Up with a Lemon.
It is all to apparent that the Economic Development Authority, Duncan and Hardi did not take into account the improvements on the Broad and Washington Streets site–the multi-story Robertson Building on the corner of E. Broad and North Washington Street, Applebee’s and the office building at the corner of East Broad and Lawton Street–which are still generating revenue benefits for the new owner and have an assessed market value in excess of $6 Million+. The buildings are hard to miss.
Hardi and Duncan Should Know Better
The citizens should have expected more from Duncan and Hardi. Duncan has served as chair and vice chair of the Council’s committee on economic development and Hardi is listed at the Council’s liaison to the EDA. The land use and land value issues are central to their responsibilities. Aren’t they paying attention?
Searching for $5 Million an Acre Land: Other Assessments Buttress Values for Broad and Washington Land
- The Harris Teeter complex is sited on 2.63 areas and according to city records the land is assessed at $2.5 Million per acre
- Murphy’s Funeral Home is sited on 1 acre and the land is assessed at $2.6 Million
- The Rail Road Cottages are residential with open land with a purchased price of $1.3 Million for approximately 1.2 acres.
It’s Also What’s Underneath the Site: Consultant Issues a Caution.
We are being asked to approve a $120 Million bond to build on land the condition of which is not known. It is not unreasonable to conclude that a budget overrun reminiscent of Mt. Daniel could be in the making. Here’s what the consultant said:
- “The City has not conducted detailed due diligence of the Site to test for environmental, geotechnical, or other conditions that may increase the cost of site development, and thus decrease value.”
In just a few short weeks you will be casting your vote on a matter which, by any standard, will decide for decades the future viability of the city and its schools.
In short, can we afford $120 Million of debt for 30 years without diminishing school and city services we depend on?
And perhaps the most important question: Has the Council demonstrated that its up to the task of managing a project as large and as complicated as this one is?
The choice will be in your hands.
ASSESSMENT DOCUMENTS FOLLOW: