Re: "$4 million too high for Old City Hall?" (TNT, 5-30).
The city wants to buy this building for $4 million when it's worth half that, then spend $200,000 shoring it up -all to preserve it from neglect.
The idea that a private developer would then be interested in the property for at least $4.2 million is pie-in-the-sky. In the real world, people base offers on actual costs and risk.
The offer from Grace Pleasants for $4 million should be viewed with skepticism, since no sale occurred. Owner George Webb would already have sold it for $4 million if he could. He is leveraging the city’s desire to preserve the building.
Any benefit to the community should be weighed against lost opportunity costs. What else could the city do with that $4 million to provide community benefit? How many important economic and urban development projects won’t get funded? How long will that money sit in that building before it is recovered?
There is another option for the city: Enforce the ordinances and agreements in place and negotiate additional agreements if necessary. In the end, the building will be sold in the private market and the city won't have a $4 million problem.
Speaking from my credentials as a general commercial appraiser, I know this building is not worth $4 million today. If I were Webb, I’d be popping a champagne cork. Even of he doesn’t recover all he spent on the building, the city is going to take a big problem off his hands at a price he could never get from the private market.