March 29, 2013 in City

County land deal triggers differing appraisals

By The Spokesman-Review
 

On the Web: Find an archive of previous columns by Shawn Vestal at www.spokesman.com/

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Did the county just lose its shirt in a land sale? Or did it merely purchase something it needed?

Maybe it’s neither, because maybe it’s both. Maybe the recent land sale by Spokane County commissioners to the airport – in which a $1.45 million loss was booked, on land that some had warned them not to buy in the first place – is simply one of those real-life hybrids of the good and the bad.

It’s done, in any case.

The county just sold 400 acres of land just east of Fairchild Air Force Base at a big loss – for about 55 percent of the $3.2 million it paid in 2008, in two separate transactions. One of those purchases was heavily criticized at the time as a good ol’ boy deal between commissioners who overpaid for overvalued land they bought from a political patron.

Commissioner Todd Mielke argues that some loss was to be expected, given the goals of the original transaction. The county wanted to remove the land as a possible encroachment on Fairchild Air Force Base; it bought it, took it out of use, and thereby reduced its value. The loss was, in part, the price of getting what the County Commission was after, Mielke says.

The tale of how the county came to own the land – reported originally by the S-R’s Thomas Clouse – is worth revisiting. In 2008, the county was looking to reroute the Geiger rail spur – to move it off the base onto nearby land, while continuing to serve several businesses that relied on it. Rerouting the spur would require obtaining rights of way or ownership of some private property.

The county bought 250 acres from real estate investor Pete Carstens. County plans also included part of a neighboring property, 150 rock-mining acres owned in part by John Condon Jr., the brother of Spokane Mayor David Condon.

Though the Carstens purchase had made it possible to bypass the Condon land with the spur, the Condon land had been identified as an “encroachment” problem at the base – the mining operation was considered incompatible by the Air Force. If the government began comparing bases for the purposes of closing one, it could be a strike against Fairchild.

The commission was urged by community leaders and Fairchild boosters to buy the whole parcel, Mielke said.

It was urged by its longtime right-of-way official not to buy the parcel at all.

That official, Sherm Johnson, argued that Condon was asking far, far too much for the land. Condon had purchased the property for $65,000 in 2001, and then gotten gravel mining permitting for the land. Like Carstens, Condon didn’t want to sell a small strip of land for the rail spur without selling the whole parcel, but Johnson argued that the county didn’t need it anyway.

Condon argued the land was worth $1.2 million with the added permitting and other improvements. County appraisals landed at $180,000 and $650,000, based on different valuations of the mining operation. Johnson referred to the latter appraisal as “absolutely ludicrous,” and thought even the $180,000 might have been high.

The commission – Mielke, Mark Richard and Bonnie Mager – voted unanimously to buy the full parcel for $600,000. Condon had donated $500 apiece to Mielke and Richard, and his family is a longtime and influential helper of local Republicans. Many saw the coziness as slimy. When Condon was asked in 2009 whether the taxpayers got a good deal when it bought the land for 10 times what he paid for it, he replied: “This is America. Does it matter how much we bought it for?”

America! Where land is worth whatever you can get someone to pay.

Mielke says that he understands the appearances of impropriety, but that the Condon property had long been identified as a potential issue at Fairchild. Members of Forward Fairchild, the Greater Spokane Incorporated committee that advocates on behalf of the base, were concerned about it, he said.

“The goal, as urged by the Forward Fairchild group, was, ‘Please get this off the threat list,’ ” he said. “We were more interested in the parcel than the ownership.”

Having purchased the land, he said, the county restricted use there to avoid potential future encroachments, which drove down the price. As did the differences in the real estate market of pre-crash 2008 versus today. The sale of the land to Spokane Airports – a hedge against various future possibilities – seemed like a good resolution, Mielke said.

He could be right. Good resolution – bad price.

Shawn Vestal can be reached at (509) 459-5431 or shawnv@spokesman.com. Follow him on Twitter at @vestal13.

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