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This page contains a single entry from the blog posted on December 27, 2006 5:43 PM. The previous post in this blog was Jerry and me. The next post in this blog is She's got it. Many more can be found on the main index page or by looking through the archives.

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Wednesday, December 27, 2006

This time, they really mean it

The latest Portland Development Commission appraisal of the Police Headquarters block is in:


Comments (21)

I assume they'll put the land out for bid now? Or is it really so hard to get anyone to build a tall building downtown?

A short while ago I posted on Jackbog's Dec 21 post titled "Trouble in the sandbox". I explained how PDC's appraiser Jim Barclay of Day Appraisals used the "land residual approach" to justify the negative appraisal. It is where a buyer calculates the cost of the built project on a piece of land, then if there is any dollars left over, that is the land value you offer the land seller-the PDC. In the Oak St. case, the project created a negative $1.8M in land value. I sure wish I could use this method for a project.

I believe even the this fourth, fifth appaisal is low on a property comparison approach. What is even more troubling is that the old/new PDC Commission hasn't even asked the "hard questions" concerning this issue after Leonard's and other Council member inquiries. Makes one wonder if this will continue in future PDC sales/purchases. Who's watching the scams?

What I find so ironic about this is PDC had a very good program in the late 70's early 80's where they helped regular folks get and fix up homes in run down areas of Portland. They did not give away these grants of money that allowed young people to buy these homes, but instead put a lien against the property that would be paid back when the property was sold. In all the PDC smoke and mirrors on Value, why not just give them the grant they need and then when the property is sold, like Harrison Towers and condoized, the City and the taxpayers get a return on investment. I have looked at the financials of a number of these developments using HUD and UR funding, mostly owned by the same cast of characters, they are using public money to make themselves richer. Yes they should be allowed to make a fair rate of return on their investment, but the taxpayers should get theirs. In this town the taxpayers loose three times. One thier money is "given" away instead of loaned for this development, the tax abatements require they pay almost 20% of thier property tax to UR, and then many of these are tax abated so that the taxes they pay for services are spread thin and the sink hole scenerio abounds. When are the people going to get out the pitchforks.

Jack,
You should do a magic 8 ball with the same theme.

The "Cloudy Try Later" was an allusion to that alternate appraisal technique.

I just dont understand how a block in the heart of town could only be "worth" a million dollars. Especially with the cost of housing in the area. Look at condos in the Pearl. What would be a better investment? A 1200 sq ft condo or a block of undeveloped land in the heart of the city? Im betting its the land.

And how is it that a moderately-sized single family home is worth nearly half that?
One or the other is seriously wrong...

Common sense is not welcome on issues such as this. If it were, we would we have a much different City Council. Now please stop being a "crank" and a "kook," and look! It's an aerial tram! Oooooooo... kewl.

Jon, read the appraisal and you'll find out why the property is only "worth" a million.

Or read the paper -- the PDC minions promised Trammell Crow a tax abatement on the Alexan, and they didn't get it. Could this be payback?

The fact that there have been numerous appraisals, at all sorts of numbers, is all you really need to know. MAI -- Made As Instructed. Kind of like exotic dancing, valuation of property is an art form.

Where can I read the appraisal?
I tried a Google search, but all I get is links to BlueOregon articles, OregonLive and this blog...


It probably isn't posted anywhere. The PDC has a web site that on its face looks like that of a very transparent agency, but it never has the stuff you really want to see.

I'm sure the appraisal's a public document. Perhaps Fireman Randy will get a copy and forward it. I'd be glad to host it; there isn't enough good fiction on the web.

Calm yourselves, gentlemen. It's on their website:


http://www.pdc.us/new/releases/2006/1227.asp

Amazing. Not like them at all. Fireman Randy's chop-busting apparently has forced actual disclosure of something controversial. A first.

Looking at the comparables (around page 52), some of them don't look too comparable to me... Anyway, it will make for interesting bedtime reading.

Could you hire another appraiser, who would write another 87 pages and reach a number like $2.9 million? Of course. Someone already did.

Maybe we can keep getting it appraised up. Sort of a reverse aerial tram overrun, with the taxpayers getting the benefit for a change.

Has anyone ever seen an appraiser rely on a 5-year-old preliminary title report, particularly when the encumbrances are a significant factor in the valuation?

Of all the appraisers out there, why this guy in Beaverton?

Maybe Skinny City Girl, who apparently thinks this appraisal is legit, can offer her insight...

These "encumbrances"...a Limited Liability company is formed, buys the lot from the boys next door. THEN signs a ridiculous 297 year agreement to lease space for parking at $1 a year. THEN doesn't pay property taxes for three years --let alone DO anything with the property.

Then PDC comes along, nearly doubles the purchase price paid to the boys next door WITH the "encumbrances." Then the Limited Liability company that did the deal and signed the lease is administratively dissolved.

Nah...no problem here.

I don't know anything about appraisals and I'm limited to reading them at face value. I agree a 5-year old title report is strange. And also, didn't anyone put together an ALTA for this property and discover early on that these deal killer type "encumbrances" existed (i.e. before buying the property?) All this speculation makes my head spin...

To: PDC's appraiser of the Third and Oak Property in Portland
Re: Appraisal of My Own Property

Dear Jim,
I am considering filing an appeal on the taxable value of my residential property. After reading your findings on the Portland Police Headquarters Third and Oak Property, and coming to an appraisal of $1.12 Million, I knew immediately that you could help me.

I will submit all the information you will need for your appraisal, including photos and some other stuff you can look at. Any visit to view the property is totally unnecessary.

And remember, the final value I want you to arrive at for my house and land is $50,000. I look forward to your objective appraisal, and remember, $50,000.

Thanks,
Carol

All this speculation makes my head spin...

The hubris of Portland City government (elected and selected) makes my head spin. My stomach too.

All this speculation makes my head spin...

What isn't speculation is that SKB-LaNoue LLC was created before the purchase and then was dissolved after the property was "encumbered" and sold to PDC. And PDC paid nearly double the price this LLC paid DESPITE the new encumbrances that supposedly DECREASE the value of the property.

What isn't speculation is that this new appraisal speaks to the encumbrances imposed by the SKB-LaNoue lease, but fails to mention SKB-LaNoue's dissolution.

But then, of course, the encumbrances created by the sale of this property by the boys next door to a shell corporation inexorably leads PDC to pay nearly double the price for the land (hey, they know value when they see it)...but then PDC turns around (whoops!) and argues the property has a negative value so they can give it away!

Maybe some day we will get an "outsider" for a U.S. attorney, state attorney general, or county district attorney. Until then, this beat goes on...


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