HomeMy WebLinkAbout12-05-2000 Meeting
REAL ESTATE MEETING
COMMITTEE ROOM - December 5, 2000
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PRESENT: Hons. Bob Young, Mayor; Colclough, J. Brigham, Mays, Kuhlke, H.
Brigham, Shepard, Beard, Cheek and Bridges, members of Augusta Richmond County
Commission.
Also Present: Jim Wall, Administrator; Walter Hornsby, Interim Administrator
and Lena Bonner, Clerk of Commission.
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Mr. Wall: This is a continuation of the discussion conceming Richmond Bonded
Warehouse. I have continued to have discussions with Zach Everitt and through him
Charlie Anderson who remains interested, and for your benefit, the lease obligation
requires us to maintain the railroad tracks as well as the pumping station down there. In
October there was a problem with a pump down there and there was a lack of fire
protection at Richmond Bonded Warehouse through the sprinkler system. They called
and were pretty upset about it. The pump was repaired but that brought back to the
forefront the matter of the City maintaining the pump and the railroad. They have made a
proposal that in my opinion was ridiculously low. I met with Sonny Reece to get his
input, as well as Bill Hollingsworth. They want to purchase an additional eight acres that
adjoins the 6.5 acres that they currently have under lease. The lease has a remaining term
of about 19 years and Bill had appraised the 6.5 acres at $20,000 an acre which Sonny
says he concurs with. However, the eight acres that adjoins it he deems that to have as its
highest and best use something other than industrial use and he puts a figure of $50,000
on it which would be a total of 400 plus $ I 30,000 for the 6.5 acres. The warehouse built
there by Richmond Bonded Warehouse has a value of$2,375,000 according to Mr.
Hollingsworth's appaisal; however, you can't realize that value until 19 years out. So the
question is by what interest rate do you reduce that back to present value. I asked him to
discount it by 6% and you come up with a figure of$785,000. Using a 9.5% rate which
Sonny said he would use, it reduces that value to $423,000. Between those two
scenarios, you come up with a value of either $1,356,000 or $985,000. If you sold it to
Richmond Bonded Warehouse for $1,356,000, he could turn around and sell it for
$2,375,000, and you could explain how you got to the number but would the public
understand what you just did. He is currently not paying any taxes on it and won't for the
next 19 years. If you sell it to him, then he's got to start paying tax on it and using a 6%
return, he would pay taxes totaling $1,377,000. I need to know if you warit me to
negotiate with him along these lines and come back with a proposal or whether you are
saying that we're not interested in selling that property for industrial use or where we go.
Mr. Shepard: What recommendation do you have?
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Mr. Wall: I'm looking for direction and fairness. It doesn't make sense to sell it
if you see that it could be developed in the future. On the other hand. we're going to
have to pay some money to fix the pump and the railroad track to fulfill our obligations
under the lease agreement. In 19 years we still may be looking at a warehouse on an
undeveloped piece of property. They have contacted CSX about fixing the tracks and
CSX says they wish the City would buyout the property so they could tear the track up.
After further discussion, Mr. Wall: I want to come up with a mechanism where
we don't have to declare it surplus and sell it on the courthouse steps because if you do
that, you won't get fair value for it. I don't want to talk to them about selling unless we
really have some interest in it.
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Mr. J. Brigham: I think we have some real interest if they're thinking about
moving out of Richmond County.
Mr. Wall: I can try to corne up with a proposal that makes some sense.
ADJOURNMENT: There being no further business, the meeting was adjourned.
Lena J. Bonner
Clerk of Commission
NWM
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