City, developer eye single appraiser for Fifth and Forbes project
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The value of 19 city-owned properties Downtown, to be sold to a Washington County developer as part of its plans for the Fifth and Forbes corridor, could be decided with the help of a single appraiser.
The city's Urban Redevelopment Authority and Millcraft Industries Inc. are considering the use of a mutually-agreed-upon appraiser to help set the fair market value of the parcels the URA has paid $13.8 million for over the last seven years.
The appraisal process likely will be part of a pending agreement between the URA and Millcraft to give the developer exclusive rights to the properties for at least a year, with options to extend those rights beyond that point.
The agreement won't go before the URA board today, as originally hoped, as both sides work to iron out final details.
Millcraft wants to use the properties for $71 million in projects it is planning in the Fifth and Forbes avenues corridor. They involve the conversion of the former G.C. Murphy's store into condominiums, apartments and shops, and retail and residential development on Forbes Avenue.
City and Millcraft officials said negotiations over the agreement are going well. More time is needed not because of snags, but simply because of the complexity of the undertaking, they said.
"There's too much, too many details to get crunched this quick. We want to do it right," Mayor Bob O'Connor said. "This is a major undertaking and there's a lot of legal work involved, and you can't do it overnight."
"I think things are going well," added Brian Walker, Millcraft chief financial officer and vice president of finance. "This is a major, major project, a major high-profile project. Both sides want to make sure we're doing the right thing."
Once done, the agreement likely will incorporate an appraisal process to determine the fair market values of the city-owned properties. Don Kortlandt, URA general counsel, said the agreement that is to go before the board initially probably will not include purchase prices for the properties.
He said an agreed-upon appraiser probably would be hired to review and value the parcels over four to six weeks. The appraisals would serve as a "guide in establishing the purchase price," he said.
Mr. Walker also said some type of appraisal process would be used to determine the value of the properties, but added the details of exactly how that will be done are still to be discussed.
The URA has been acquiring the properties since 1999. While the agency, starting under former Mayor Tom Murphy, spent $13.8 million purchasing them, URA Executive Director Jerome Dettore has said the city could end up getting less than that in the Millcraft deal.
The city, he added, may have overpaid for some key parcels in an effort to assemble enough land in the Fifth and Forbes corridor to interest a developer. Collectively, the 19 properties are assessed at $9.5 million.
They include the Candy-Rama store on Fifth Avenue, the former National Record Mart building on Forbes Avenue and the five buildings that make up the old Murphy's store.
Asked yesterday whether it was realistic for the city to at least get its money back in a sale, Mr. O'Connor said he wouldn't know that until the fair market value is set.
"I'm going to wait to see what the appraisal process generates," Mr. Kortlandt added.
Mr. Walker has said Millcraft is interested in giving the city a "fair return" for its properties. He also has said that regardless of the sales price, the city will see an immediate return on the parcels, either through payment of real estate taxes or payments in lieu of taxes.
The agreement with Millcraft likely would give the developer exclusive rights over the properties for a year, with options to extend it beyond that. It also will include specific benchmarks to assess the developer's progress.
The delay won't affect Millcraft's planning or timetable for the project, he said.
A final deal could end up going before the board at a special meeting later this month or at its regular meeting in July.
First Published June 8, 2006 12:00 am