ANT BITE -- The BMC HypoAppraisal

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.

Comments

[Foran/Ireland Exchange on Facebook]

FACEBOOK EXCHANGE BETWEEN ED FORAN AND MICK IRELAND ON BMC:

Michael Ireland at 7:54pm March 19
Ed:

I respectfully disagree. The property should be appraised based on its worth, not under the assumption that the zoning cannot be changed since, in this case, the city has the power to do so.

I have been in litigation over the MAI issue and have not seen that MAI certification is the sine non qua of appraisal veracity.

The fact remains, we have 7 acres of land that we control the zoning on and there are no such equivalent parcels available for $18 million at the time we made the purchase or even today.

As for Randy Gold, I would have loved to have him do it but he was, at the time, probably booked and unavailable. To impute motivations about the city i choosing dave Ritter is unfair and not supported in fact. It's not like you to imply nefearious motives in a situation where you and most professionals understand both Dave Ritter's competence and the difficulty of getting randy .

Thanks
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Ed Foran 8:07 p.m March 19
Mick,

I respectfully disagree. I have served on 2 Eminent Domain juries and they use only MAI appraisers and market value appraisals. And, this is not just about using an MAI, its about a market value appraisal vs. hypothetical appraisal. A hypothetical appraisal would never stand up in a court of law as a legitimate appraisal. BTW, is the City requesting a hypothetical appraisal or a market value appraisal for the Aspen Youth Center site? We should be consistent, don't you think?
I'm sure the Art Museum would like to know as well.
Seriously, I'd like to know which it will be.

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Ed Foran 8:37 March 19

Mick,

If you would have loved to have Randy Gold, why didn't you ask him? You say, he was, "probably booked and unavailable." Do you know that for a fact? Did anyone ask him? "Probably" implies an assumption, not a confirmation of Randy's availability.

I don't want to continue to flog this thing but I'd love to sit down with you and John McBride and clear the air. I know you are out of town at the moment, but perhaps we can all get together when you get back.

Let me know.

Thanks,

Ed
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Michael Ireland at 5:26pm March 21
Yes, ed I do know how hard it was at that time to get Randy to do an appraisal because I have employed him or tried to employ him on behalf of private sector clients.
You are assuming his answer would be different. There is no foundation for that assertion.
Tnaks Mick