Parcel Y now $11M
Property downtown sees value double
By David Hutton, The StarPhoenixApril 10, 2010
The prime riverfront land slated to become the anchor for River Landing has more than doubled in price in the last four years, says a report going to city council Monday.
Known as Parcel Y, the value of the contentious 2.43-acre site across from the Remai Arts Centre has gone from $4.8 million in 2006 to $11 million this year, say two new appraisals done for the city.
The appraisals, done by Suncorp Valuations and Beatty Appraisal and Consulting, value the land at $11.6 million and $10.4 million, respectively. Those valuations appraise the land at $110 and $98 per square foot.
The city's administration is asking council to decide Monday whether to enter into negotiations with Lake Placid Developments, in a joint bid with Karim Nasser's Victory Majors Investment Corp., to build a $200-million hotel-office-condo megaproject, or to move forward with a process to open the land up for other developers to bid on.
"We need to clearly know if council has an interest in pursuing the development Lake Placid has proposed or not," said city manager Murray Totland. "If not, they need to give us direction to pursue a request for proposals because we can't do much on either and it's not fair to be trying to do both."
The new land prices were a surprise to city administration, Totland said. The price of land in the downtown has increased dramatically and the city's real estate market has boomed since 2006. But he expected the values would be dampened somewhat by the restrictions on the site, which call for a hotel, street-level retail, residential use, a public gathering place and parking.
"I've always thought any time you place significant restriction you end up reducing value so I was surprised to see valuations that high," he said.
Local philanthropist Ellen Remai purchased the land for $1.6 million in 2005 when a hotel and spa was eyed.
The prices aren't binding but give city administration and council more information on the property, Totland said. Council could agree to sell the land to a developer for any price, Totland said, and may want to hear from the appraisers to get more information on how the values were arrived at.
"It's only worth what people are willing to pay for it at the end of day," he said.
In the report, the city's administration lays out what it would be looking for from Lake Placid if council wants to enter into negotiations. The agreement the city is looking for would, generally, be the same as a previous one from two years ago, including construction timelines that, if not met, would mean the land would be repurchased by the city.
This time, though, the city is also asking for stronger financial due diligence with an outside audit brought in to investigate the financial viability of the project.
That measure would ensure for the public the development is viable, Totland said.
Nasser and Lake Placid CEO Michael Lobsinger have been clear they are looking to revive the agreement exactly as it was prior it being voided last year when payment deadlines on the land weren't met. They have also said they won't bid if the city opens up the land for other developers.
On Friday, Nasser said he felt the new appraisals were "too high" at $11 million and suggested the previous land price, $4.8 million plus interest, was a fairer price.
"We are prepared for everything," Nasser said.
"We want to talk with them and co-operate to proceed."
If negotiations fail, the city could reopen the request for proposals, Totland said, which was being readied for next week.
"It would be nice to move forward on this," Totland said. "The need for a decision is clear."
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Didn't notice that last part before. Pretty sure we are still the 17th largest city in the country.
At least it bumps us up to 31st in the your city's tallest under construction! The sign of a major city.
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