Getting facts right about value of the Millikin School site
To the Editor:
I write in response to recent comments by former School Board Member Eric J. Silverman in a March letter to the editor [published online at www.heightsobserver.org] about valuation of the Millikin school site because of my concern that he seems more authoritative than he actually is.
Mr. Silverman states in his letter that he believes the site is worth between $1.25 million and $2.5 million. He is not a real estate appraiser. His opinion is contradicted by the appraisal report commissioned by the Board of Education in 2005. In that report, a qualified professional valued the property “as currently zoned” for single family residential use at $874,400. Property values have dropped drastically since 2005. Therefore, any valuation today will be much lower. The offer of Mosdos to purchase for $550,000 even might be reasonable, especially considering how Mosdos will have to spend over $1.6 million for repairs. For this reason, both the Board and Mosdos have recently commissioned new appraisals. Each party recognizes the importance of receiving a competent opinion about current value before entering into further negotiations.
Mr. Silverman is also not a developer. While the land is zoned in theory to allow 50 small lots as he suggests in his letter, the site could not accommodate more than 35 because of its shape. Mr. Silverman thinks lots would sell for $25,000, but a lot on Radcliffe Road listed for $19,900 has not sold for almost two and one half years now. The value of this land is not the net sales price for a subdivision that does not exist. The value of this land is what someone would pay for it today knowing they would have to invest well over $750,000 for infrastructure and development costs to get a bunch of lots that will be extremely difficult to sell for enough to make a profit.
Mr. Silverman does not mention in his letter demolition and asbestos removal costs. He does not mention the costs of putting in a road, street lighting, sewer and water lines, and sidewalks. Typical construction cost for a 1,500 foot road that would be required is between $600,000 and $700,000. He does not mention engineering costs and permit costs. He does not mention holding costs resulting from a poor sales market such as taxes and insurance. All of these factors may affect the reasonable valuation of the Millikin site for purposes of residential development. Unlike Mr. Silverman, an appraiser will take these factors into consideration before giving an opinion as to value.
In his letter, Mr. Silverman mentions leasing as an alternative. He did not realize that I had written to the Board almost a month ago that Mosdos is open to discussing all reasonable alternatives, including leasing, after new appraisals have been completed.
I agree with Mr. Silverman’s statement in his letter that there has been what he calls a “cacophony” in the public debate that has been “muddying the waters.” However, I believe he is contributing now to the confusion by giving opinions without having relevant and accurate facts on which to base those opinions. I am hoping that better information will result in better decision making by all involved.
Alan Rapoport is a former mayor of Cleveland Heights, and is an attorney in private practice, specializing in real estate and probate matters. He is presently representing Mosdos.