The purchase allowed the county to stay within its $2.9 million capital improvement project allocation for acquiring property for a school and making necessary improvements without having to borrow money, Callaham said.
“I believe strongly we have the right site,” Callaham said.
The parcel was one of 22 sites examined by staff from the county and Washington County Public Schools to determine which was most suitable for the site of a new school to replace Conococheague and Winter Street elementary schools, said Joseph Kroboth, the county’s director of public works. The staff eventually narrowed the selection to five sites and the owners of three were interviewed, he said.
Of those three, one owner was not interested in selling and another wanted more than $2 million for the land, Kroboth said. Aside from acquisition costs, the cost of developing the Hagers Crossing site was lower because it already has access to water and sewer and it has off-site road improvements, he said.
McKinley asked several questions of Kroboth, including whether the property was the least expensive to develop, and whether it was at or near market price. Kroboth answered that it was the lowest cost site to develop and the original asking price was $2.4 million.
The county started with an offer of $1 million in the negotiations, Kroboth said.
The county and school system analysis of the properties showed one of the two sites not selected had development costs for road improvements and water and sewer extensions of more than $3.9 million, while development costs at the other site exceeded $2.7 million.
There are no off-site road improvements for the site being purchased, and the other costs came to more than $1.5 million at Hagers Crossing.
The analysis also included acquisition costs for the land, but the Hagers Crossing site was estimated at $496,000, the property’s assessed value.
That sparked a discussion among the commissioners about the market value, with Callaham stating that the market value of a property can fluctuate without its assessed value necessarily being changed by the state.
In answer to a question posed by Callaham, county Real Property Administrator Joseph Kuhna said no independent appraisal of the property was conducted. A contracted appraiser declined to appraise the property because there were no comparable properties nearby on which to make a comparison of value, he said.
The land had been in foreclosure and was purchased by a holding company in 2011 for $496,500 because the bank holding the note wanted to unload the property, Kroboth told the commissioners. Real estate records showed that Hagers Crossing Multifamily LLC purchased the land from the holding company in November 2011 for $525,000.
Baker said during the meeting he was concerned “some of the same names” connected to a limited liability corporation from which the county bought a building next to its administration building might be connected with Hagers Crossing Multifamily.
The commissioners have said they did not know the name or names of the Hagers Crossing Multifamily LLC investors.
Baker said after the meeting the county bought the former bank building from a corporation for more than $3 million in 2008. The corporation earlier purchased the land for $1.4 million, he said.
Although the property was supposed to be ready to move into at the time of purchase, the county has yet to occupy the building because of environmental problems, Baker said.
After the meeting, Cline said the county and school system should have considered buying the property when it was in foreclosure.
In addition to the $1.5 million price, the county also will pay closing costs and brokerage fees of about $86,000, plus extension fees that could total $10,000 if closing does not occur within two months, Kroboth said. The settlement date is Saturday, Sept. 22, he said.
If settlement does not occur in two months, the deal would be voided, Kroboth said.