ANT BITE -- The BMC HypoAppraisal
March 20 The long awaited BMC "appraisal"—sort of---has been released by the City. Initially, upon reading the newspapers last week,Aspenites were comforted by the assurance that the value was only $1.45 million less than the $16.8 million paid in December, 2007. But upon further examination of the appraisal, and discussions with real estate professionals, the City is once again being challenged with the outrageous spin they put on the so called, “appraisal.” (Reminds us of the bogus press releases issued after the Burlingame audits.)
Turns out the “appraisal” was a very nonstandard valuation based on “Extraordinary Assumptions” and “Hypothetical conditions”---not what a reasonable buyer would pay!! And one any bank would laugh you out of the room for presenting.
John McBride, one of the most respected developers and businessmen in the valley, who knows this property like the back of his hand, called the public’s attention to the bogus appraisal in a guest column this week. (His columnis both linked and printed in full below.) And from there, the rocks are being uncovered.
We are not ready to write the Ant article on the issue yet, but given the attention it is getting and the blog entries we have received, we want to make as much information publicly available as possible.
Here’s a link to the Aspen Times article:
http://www.aspentimes.com/article/20090313/NEWS/903139970&parentprofile=search
And the City’s Press Release:
http://www.aspenpitkin.com/apps/news/news_item_detail.cfm?NewsItemID=1042
John McBride’s Column “Fantasy Economics” : (also reprinted in the comments below)
http://www.aspendailynews.com/section/columnist/133284
Mick Ireland’s Rebuttal to McBride:
http://www.aspendailynews.com/section/letter-editor/133319
A copy of the “appraisal”: (large file takes VERY LONG TIME to open):
http://www.aspenvotes.org/storage/HypoAppraisal.pdf
Fair Warning At the Time of Purchase:
http://www.aspentimes.com/article/20071129/NEWS/71128041&parentprofile=search
City Documents at Time of Council approval. (Explanation of $450,000+ per unit subisdy!)
http://www.aspenpitkin.com/pdfs/depts/38/cc.res.097-07.pdf
See the comments below posted initially under issue #28 of The Red Ant “Land Banking Needs a Bailout.” We stand by our conclusions!
Stay tuned.We know that there is much more to learn. The Ant has been asking for a copy of the appaisal every few weeks since late summer, and the City always had some excuse as to why it was not complete. But the long awaitedreport was even more creative than we could have imagined!
Feel free to leave a comment below.
Reader Comments (15)
FROM 3.23 09 LETTERS TO EDITOR---ASPEN TIMES:
When government plays developer
Editor:
Aspen City Asset Director Scott Miller’s defensive commentary regarding the BMC purchase price unintentionally reveals what happens when government plays developer.
Remember the Burlingame pork barrel:
— Misled the voters by millions of dollars about the cost;
— Allowed the buyers to determine expansion — not the taxpayers who funded for it;
— Subsidized the units to the tune of more than $300,000 each (sure glad my tax dollars allows McDonald’s and the other multinational corporations in Aspen to underpay their help);
No private developer who wanted to stay in business could afford to screw up as consistently as did the city at Burlingame.
Likewise, no private developer in his right mind would hire an appraiser to determine the fair cost of a piece of land by disclosing all the future upzoning potential it would approve, which had the effect of tripling the appraisal price. It’s like saying to the seller, “I would rather pay $18 million for your lumberyard rather than $6 million or $12 million.” Dumb!
Government as developer has no incentive to make a profit and the resulting cost overruns and screw-ups will continue until the taxpayer says “enough.” When the time comes, vote the city out of the development business.
Bert Cassady
Aspen