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Quincy councilors to debate price, process of land purchases

Posted by Jessica Bartlett  August 30, 2012 05:11 PM

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Some city councilors have begun questioning the protocol behind the city's land purchases, following the recent acquisition of two parcels in West Quincy for a flood-mitigation project.

Issues initially surfaced when the Quincy mayor’s office bought two parcels facing foreclosure on Furnace Avenue for $485,000. Purchased with money from the $25.4 million Capital Improvement Plan, the land will be used for a pumping station to alleviate flooding in the area.

According to city officials, because they had the funding and approval necessary for the project, the mayor’s office went ahead with the purchase without seeking further permission from the council.

“Under the most recent case, the city received council approval for the drainage plan, and it was the legal department’s opinion, at that point, that it constituted approval to purchase the property,” Christopher Walker, spokesman for Mayor Thomas Koch, said in a phone interview.

The purchase has drawn the ire of some city councilors.

“My understanding of Massachusetts General Law is the city can’t purchase property before coming back before the council,” councilor Joe Finn said. “This idea that somehow we approved this through the CIP is ridiculous. I’ve read through it again and some of my colleagues have read through it, and we don’t see anything about purchasing a specific piece of property. I don’t even see it generically.”

The issue is further complicated by the fact that the property was assessed in 2012 for tax purposes at only $135,200, according to information from the Assessor’s Department, which makes the purchase price seem abnormally high, Finn said.

“Any purchase of property by law is supposed to come before the City Council. That’s the whole point. Not just so there isn’t any impropriety, but so there isn’t the perception of impropriety,” Finn said. “The questions are around the discrepancy between the tax assessment and the more recent appraisal. I don’t think it's ordinary to have that level,” he said.

Finn said he plans to bring this issue before the council, regardless of whether the land has already been purchased.

City officials say the fears are unfounded.

According to City Solicitor Jim Timmins, the property's assessed value is much lower than the appraised value. He said appraisal documents by John McGovern valued the land at $595,000.

“When the city is going to buy property or is going in for eminent domain, we don’t rely on the assessed value, we rely on an appraisal and look at the particular parcel and come up with a value on a through review of the parcel and comparable ones,” Timmins said.

Additionally, the assessed value is based off an incorrect square footage number at 43,480 square feet, Timmins said. The appraised value is based on 59,322 square feet.

Assessor Peter Moran was unaware of a different square footage number for the parcel, and said the assessed value and square footage is what he has on record. Regardless of the size of the land, it isn’t unusual for the assessed value of a piece of property to be lower than the purchase price, he said.

Not only are assessments based on sales from two years prior, in accord with Department of Revenue guidelines, other factors often increase the purchase price in relation to the assessed value.

“Often you’ll see someone pay a premium for a specific property because they want a specific location or want that use. I see it with CVS or Walgreens, they want a specific corner and they will pay through the nose for it,” Moran said.

Even with land the city has purchased within the last five years, oftentimes assessed values are lower than the purchase price.

Over the last five year, several city purchases of land show sizeable differences between assessed values and purchase prices,

The properties purchased to assemble land for the Walter J. Hannon Parkway, 148 Parkingway, waere purchased in 2006 for $650,000, though it had been assessed at $373,500.

Elsewhere, 14 and 11 Revere Rd. were purchased in 2007 for $700,000, less than the $969,200 assessment; 1596 Hancock St. was purchased for $850,000 (assessed at $741,300); 1586 Hancock was purchased at $1.27 million (assessed at $1.15 million); and 1601 Hancock was purchased for $2.85 million (assessment $2.33 million).

Although the open space purchase of a Circuit Road property for Faxon Park was $50,000 ($341,300 assessment), Community Preservation Committee purchases of 271 Sea St. for $1.2 million (assessed at $207,300) and 2 and 3 Holliston St. for $618,700 (assessed at $487,100) were also markedly higher.

Not to mention the most recently purchased land for the Central Middle School.

While the Saint Ann’s School was purchased for $4 million ($6.48 million assessment), 873 Hancock was purchased for $380,000 (assessed $330,600), 859 Hancock purchased for $2.58 million (assessed $764,500), and 869 Hancock purchased for $320,000 (assessed $254,700).

While appraised value for both 869 and 873 Hancock matched the purchase price, the appraised value for 859 Hancock was only at $2.15 million.

At the Furnace Avenue property, the assessed value was low because the land was marked as “potentially developable” and some of it was on wetlands, Moran said.

And although the last purchase price for the property was abnormally high - previous owner Dan Flynn purchased the Furnace Avenue property in 2007 for $400,000 – the assessor’s office didn’t feel the assessed value needed changing, mostly because the land still wasn’t categorized as “developable”.

“It’s junk land until then. That’s why they didn’t change the assessment for the $400,000, because he couldn’t get [building] permits,” Moran said.

Although some in the city are questioning why the city didn’t take the land at foreclosure auction, Timmins said he supports the appraisal and the purchase price and is prepared to defend them.

“It’s in our best interest to pay the least amount possible. We do what we did here, obtain an appraisal from a licensed appraiser, and we ask them to follow the proper appraisal methods and that’s what this individual did,” Timmins said. “And we bought it for a lot less [than it was appraised for], we weren’t going to go that high on it, and we had the good fortune that it was a distress situation where a bank was going to foreclose … in this instance we did negotiating with the bank involved for the first mortgage, then interplay with the second mortgage holder, then the property owner.”

Overall, “we’re prepared to outline the facts on the purchase,” Timmins said.

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