After some behind-the-scenes debate over the appraised value of the property, it appears the township has received a revised selling price from Jewish Community Campus officials for the 27-acre parcel of open space they are trying to sell to the township.
The matter is on the agenda for discussion during the Township Council’s meeting on Monday, November 8, at the West Windsor Arts Council’s new building on Alexander Road (in the former firehouse).
In the weeks leading up to the meeting, two members of council had been calling on their colleagues to bring in a commercial real estate broker to shed some light on the value of the piece of land the township is trying to purchase from the JCC.
Township officials had received two appraisals on the parcel of vacant land, currently part of the 81-acre future JCC on Clarksville Road, and both estimated that the property is worth between $55,000 and $58,000 per acre.
Council members Linda Geevers and George Borek, however, raised concerns that the appraisals — conducted by two independent firms — do not take into account the low market value for commercial property in today’s economic environment.
Instead, they urged their council colleagues to bring in a commercial real estate broker who could discuss the value of the property in the context of the rough economic climate and the tough real estate market.
The issue of the value in the appraisals — public documents obtained by the News through an Open Public Records Act request — has held up the township’s negotiations for the purchase of the property and prompted the members of the Friends of West Windsor Open Space last month to urge the council to come to an agreement. FOWWOS members even offered to provide the funds to hire an independent professional to conduct a third appraisal in hopes of moving the process along.
Geevers and Borek had pointed to another figure contained in both appraisals: the price — $37,795 per acre — at which JCC purchased the property in 2005. They both questioned how the property could have appreciated so drastically in today’s economic climate. They said a commercial real estate broker should discuss the issue with the council before the township considered any offer from the JCC that was based on those appraisals.
Since that time, however, the JCC came back to the township with a revised value, says Borek, who could not disclose the value because it is the subject of negotiation.
“The JCC, realizing today’s concerns, has come back with a revision as to what they are willing to sell to the community for open space,” he said.
While this may help alleviate some of the concerns for him and Geevers, Borek said the township should still consider the idea of bringing in a commercial real estate broker for future land deals, as part of the council’s due diligence.
Understanding real estate market trends in conjunction with appraisals “plays an important part in negotiations.” It is not required of municipalities to bring in such an expert, and West Windsor had followed procedure set forth by the state. However, Borek said that the state should take a look at adding the idea of bringing in a real estate expert into those requirements.
The property lies in the ROM-1 zoning area, which allows for research, office, and manufacturing uses. The JCC purchased the property — two adjoining parcels totaling 81.36 acres.
When the project is constructed, the JCC campus will include one 78,000 square-foot building and one 7,000 square-foot structure for the day camp. The campus will include a child care and early education center, health and fitness facilities, a Kosher cafe, private JFCS [Jewish Family and Children Service] suites, and offices for the United Jewish Federation and Jewish Community Foundation. It will also include recreation fields and a swimming pool.
The remaining, undeveloped portion of the campus comprises the 27.59-acre piece of land the JCC is in negotiations to sell to the township.
The parcel of land has been on the township’s radar for years, as the Duck Pond Run traverses the parcel, which also contains a blue heron rookery. When FOWWOS approached the board earlier this fall, Geevers began calling for the professional real estate company to advise the township, as she feels the numbers will come in essentially the same on another appraisal.
The first appraisal was conducted on June 15 by Sockler Realty Services Group, of Hightstown. In that appraisal, the market value of the property was estimated to be $55,000 per acre, for a total value of $1,517,450.
The other appraisal was conducted on July 3 by Richard J. Carabelli of Martin Appraisal Associates in Lawrenceville. It estimated that the 27.59-acre property was worth $58,000 per acre, for a total of $1,600,220, which was rounded down to $1.6 million.
In the appraisal, Carabelli wrote that the residential value trend in the West Windsor area showed signs of appreciation up to late 2005, but began falling in 2008 and continuing into 2009 and 2010. However, “nonresidential value, on the other hand, has shown signs of stabilization to modest depreciation over the past year or so.”
But has inflation since 2005 really elevated the price of the property from $37,795 to $55,000 or $58,000 per acre? That’s what Geevers and Borek were hoping to find out by bringing in a commercial real estate broker.
“The township should have a commercial real estate broker who can act as an advisor on the purchase of this open space,” said Geevers. “If you had over $1 million to spend on a property, what would be a reasonable price to pay for it?”
Added Geevers: “It’s logical to have appraisals done, but I also feel it’s perfectly legitimate for the township to have a commercial broker review those appraisals with us and also discuss the current commercial market conditions.”
That person, she said, will have experience in doing businesses with developers and buyers of commercial properties — like the JCC parcel — and will be able to deliver an opinion on the price for the land.
Sab Russo, president of Mercer Oak Realty, told the News that in general, “anybody who bought land in 2005 isn’t going to be selling it for any more in 2010.”
In general, land value is down, and while he said he could not give an opinion on the JCC site specifically, “the general trend is land values are down” across the board, whether the land is residential or commercial.
When asked what could have led to the high appraisals, he said that in most cases, the smaller parcel of land could have something to do with it, as an 81-acre property would sell at lower per-acre cost than a 27-acre parcel of land.
He also said that he is familiar with the Sockler appraisal firm and that officials there “do a very good job.”
“There must be some sale comparisons out there that support that,” Russo said. “It just seems intuitively like the property should be worth less, but maybe the fact that it is a smaller piece changes the landscape a little bit.”
