Wivell: What was fort worth?

October 12, 2004|by TARA REILLY

CASCADE - A Washington County commissioner questioned at a PenMar Development Corp. meeting on Monday whether the state agency should have had the approximately 630-acre former Fort Ritchie U.S. Army base appraised before agreeing to sell it to a developer for $9 million.

County Commissioners Vice President William J. Wivell, who also is on PenMar's board of directors and is PenMar's treasurer, said knowing an appraised value of the base would have given PenMar more say over what the developer, Corporate Office Properties Trust (COPT), does with the property.

"It gives us the ability to bargain," Wivell said after the meeting.

Instead of an appraisal, PenMar hired a firm to give a "fairness opinion" of the sale price. The fairness opinion, which will be completed in about two weeks, will state whether PenMar is selling the base for a fair price, board Chairman George Griffin said.


PenMar board member Ron Sulchek also has questioned the decision to go with a fairness opinion and not an appraisal.

PenMar was created by the state in 1997 to redevelop the former base, which the Army shut down in 1998.

In July, PenMar agreed to sell the base to COPT for $9 million, but that price would be reduced to $5 million if the developer creates 1,400 jobs in nine years. The Army must transfer the property to PenMar before PenMar can sell it.

COPT must spend at least $7.5 million on base upgrades, including improvements to the roads and the sewer system.

Griffin said that because the property has been mostly dormant over the last several years, he thought it would be difficult to get an appraised value of the base.

"I think a fairness opinion is the best we could do," Griffin said.

After the meeting, PenMar Executive Director Rich Rook said he didn't think PenMar would ever be able to get an exact value of the property, because of the base's location and other characteristics. He also said there wouldn't be a similar property against which to compare the value if an appraisal were done.

"It's not a horse. It's not a cow," Rook said of appraising the base. "It's some hybrid animal that's out there."

Rook said the firm completing a fairness opinion, Lipman Frizzell & Mitchell, will have an estimated value of the property in mind when it comes up with its opinion. It will take into account the cost of upgrades needed at the base in determining whether the sale price is fair, Rook said.

Wivell said after the meeting that he disagreed that an appraised value of the property could not be determined. He said a Washington, D.C., company, Joseph Blake & Associates, offered to appraise the property for $40,000 at the time Lipman Frizzell & Mitchell offered to do the fairness opinion for $23,000.

Wivell said he would have preferred that PenMar spend the extra money to have the appraisal done.

Wivell said he questioned Griffin's and Rook's statements, because PenMar had an appraisal done of the parcel it agreed to sell to International Masonry Institute (IMI). That appraisal resulted in an agreement to sell about 26 acres to IMI for approximately $1.2 million, he said.

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