Only on ABC-7: A closer look at city hall's valuation
Updated On: Jan 17 2014 04:09:35 PM CST
As plans move forward to bulldoze city hall and make way for a new baseball stadium, ABC-7 asked city leaders Monday to explain how often the building is appraised.
According to Chief Financial Officer Carmen Arrieta-Candelaria, the city hall building was last appraised in 2007 and valued at $13.8 million. She said city officials do not usually call for appraisals unless an option to sell the building is on the table, as was the case in 2007.
Arrieta-Candelaria said that since the city will keep ownership of the city hall site, another appraisal was deemed unnecessary. She said the $13.8 million valuation is still an accurate one, even when recent downtown growth is factored in.
"I think prices have been pretty stable around downtown," said Arrieta-Candelaria.
According to city leaders, about $12 million in improvements have been invested into city hall over the past ten years. However, Arrieta-Candelaria said those changes likely do not make a big dent on the building's value because the 1979 structure needs millions of dollars in additional improvements on top of ongoing maintenance costs.
The Central Appraisal District, CAD, told ABC-7 that it valued city hall at a much higher figure through its latest mass appraisal of commercial buildings. CAD values city hall at about $38 million.
CAD's Executive Director Dinah Kilgore said city hall is not required to be appraised by CAD because it is exempt from taxes. Nevertheless, the building is included in a mass appraisal that does not involve individual inspection of the building.
Arrieta-Candelaria said she has "no idea" how CAD could have arrived at a $38 million valuation for city hall and the city stands by the 2007 valuation of $13.8 million.
"Do I think it's gone up $25 million in value since 2007? I don't think that would be a good estimate because we haven't put in significant investments into city hall to make those types of improvements and I also don't think property values have increased that significantly," said Arrieta-Candelaria.
CAD's valuation, said Kilgore, is based on a number of factors like cost tables and formulas that are not usually contested by city leaders.
"The value may stand according to the tables and it may go up or down but it won't be adjusted to be more accurate of what market value is for the area," said Kilgore. She added that appraisers look at things like building costs, standard depreciation values and renting rates on comparable buildings when coming up with a valuation.
ABC-7 asked David Etzold, who owns his own commercial real estate brokerage and consulting company, to weigh in on the different values set for city hall.
Etzold said $13.8 million sounded like a lowball number. "If city hall were vacant like a lot of the downtown buildings are and if it was the age of some of the competing large buildings, you might be able to make a case (for that value)," said Etzold.
However, Etzold added he thinks the city hall demolition to make way for the ballpark is a good move regardless of what city leaders say about city hall's value.
"They could put that number at $1 and I wouldn't be upset at it because I think the long-term impact of increased activity downtown, which will bring more value downtown and more demand for space, will raise everyone else's values and those values will generate more tax income," said Etzold.