Bolsover appraisals raise questions over abandonment process

Quite a bit of reporting has been done this week on two appraisals of the 2400 block of Bolsover in the Village area, a tract of land being sought for development by Lamesa Properties from the City of Houston. As reported by the Chronicle's Jennifer Friedberg, the City of Houston had previously opposed release of the information:

Houston city officials released the appraisal of the 2400 block of Bolsover on July 11, after attempting to exempt it from public disclosure.

The block has been valued at $913,171 and $1,460,340, respectively, in two different appraisals obtained by the city from independent appraisers.

Lamesa Properties is attempting to buy the street from the city to create a pedestrian plaza called Sonoma in the middle of a mixed-use condominium and retail development the developer plans to build in Rice Village.

The Houston Chronicle submitted a request for the appraisal documents on June 26. After receiving the Chronicle's request and those of several other interested parties, the city responded by submitting a letter, signed by Assistant City Attorney Rashaad V. Gambrell, on July 5 to Texas Attorney General Greg Abbott, saying the city believes the appraisal is excepted from public disclosure.

It cites section 552.105 of the Texas Code, stating information is excepted if it relates to "appraisals or purchase price of real or personal property for a public purpose prior to a formal award of contracts for the property."

Before the attorney general's office could make a ruling, however, the city released the appraisal documents..

Julie Tysor, vice president of the Appelt Co. and general partner of Lamesa, said she is pleased with the appraisal price.

"I got the appraisal documents at the same time everybody else did," Tysor said.

The city previously gave Lamesa an asking price, which has not been released to the public.

Wouldn't it have made sense to have the appraisal(s) before giving Lamesa a sale price?

More on the process momentarily. But first, let's turn back to Friedberg's reporting, which dives into the appraisal numbers in a way that may explain why city officials might have preferred less sunshine:

The first appraisal of $913,171, submitted by Vannessa Hendrickson, an appraiser for Jo Vann Appraisal Co., was dated May 2.

The value was based on a $35 per-square-foot pricing arrived at by considering the sales of four similar properties: the 3000 block of Milam Street in 2006 for $42.99 per square foot; the 6600 block of Harwin Street in 2005 for $22 per square foot; 1512 Alabama in 2004 for $40.19 per square foot; and 1919 Mason in 2004 for $38.50 per square foot.

The second appraisal of $1.4 million, submitted by appraiser Travis R. Cooper, was dated May 18.

The value was based on $60 per square foot pricing arrived at by considering the sales of three similar properties: 4020 U.S. 59 in 2006 for $69.79 per square foot; 4100 U.S. 59 in 2006 for $56.58 per square foot; and 3135 U.S. 59 in 2006 for $55.01 per square foot.

According to HAR.com, the Web site of the Houston Association of Realtors, the median price per square foot in nearby subdivisions, based on 2005 data for residential property, is $220.03 in West University Place, $203.05 in Southampton Place and $206.77 in Southampton Place Extension.

How interesting that a journalist used common sense to choose properties for evaluative purposes that seem much more similar than, say, 2400 Bolsover and 6600 Harwin. As Friedberg demonstrates convincingly, the properties chosen as "similar" for appraisal purposes really affect the bottom line!

When Matt Stiles posted on this topic during the week, one of his blog commenters made an interesting point:

A Half Million Dollar difference!

Now, let us see how prudent Mr. White is with City funds.

Remember, not long ago he wanted to kick MHMR off the West Dallas tract. All for the City coffers he said. Now that he's got these appraisals it will be interesting to see if the developers "bought off" the proper parties and gets the lower price.

Actually, as Friedberg's reporting illustrates, the "difference" in the two appraisals is a bit of a red herring, since both appraisals appear to undervalue significantly the property being considered. But the commenter's larger point is a good one: If Mayor White was willing to engage in a dubious financial shakedown of a nonprofit center that houses retarded people over the value of the property, then he certainly ought to be just as diligent (even more so!) in securing the very best possible price and improvements from Lamesa in exchange for the property at 2400 Bolsover.

Presumably, that should involve at least one appraisal that takes account of land values in the proximate area (rather than dissimilar strips of property along Harwin or the Southwest Freeway), and plenty of transparency and public discussion.

RELATED REPORTING: The selling of Bolsover Street: tale of two appraisals (Michael Reed, ExaminerNews.com), Bolsover cloak doesn't surprise reader (ExaminerNews.com), Why Bolsoverís true owners among last to know (Michael Reed, ExaminerNews.com).

BLOGVERSATION: Inside Central Houston.

Posted by Kevin Whited @ 07/22/07 01:16 PM | Print |

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