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State Controlling Board president says bad information irrelevant because decision based on independent appraisals
By Carol Biliczky Beacon Journal staff writer
Published on Wednesday, Aug 22, 2007
A University of Akron official misspoke before the state Controlling Board on Monday, but it didn't affect the panel's approval of UA's request to buy Quaker Square.
Joe Secrest president of the board, which among its duties examines land purchases made by state colleges and universities said the panel approved UA's purchase of the shopping, dining and hotel complex based on independent appraisals, not information presented by UA general counsel Ted Mallo.
''Traditionally, in almost all real estate transactions, it is the independent appraisals that are relative,'' Secrest said.
The Columbus Dispatch on Sunday raised the issue of how much the university was paying for the Quaker Square property.
Monday, Mallo told the Controlling Board that the value for tax purposes is $9.8 million, which he thought was 35 percent of the total appraised value. However, $9.8 million is the total appraised value as determined by the county.
The confusion arose because the university had obtained three independent appraisals of the property.
UA arrived at the purchase price of $22.7 million after getting independent appraisals of $22.7 million from Charles G. Snyder, $28 million from Roger A. Sours and $29.8 million from Leslie G. Prochaska of LP Realty Consultants Inc., said Ted Curtis, UA vice president for capital planning and facilities management.
''This was reinforced in my thinking because the $9.8 million figure was 35 percent of $28 million, an amount which corresponded to the value of two of the higher appraisals for the property,'' Mallo wrote the Controlling Board on Tuesday.
He apologized for unintentionally providing incorrect information.
The board approval was the last step in UA's purchase of the historic Quaker Square complex in downtown Akron from Quaker Square Properties, owned by Jay Nusbaum.
The university will convert the eight-story Crowne Plaza hotel to stu dent housing and other buildings to classrooms.
Curtis said Tuesday that $22.7 million was a good deal for the university.
While Akron Mayor Don Plusquellic has criticized the university for absorbing one of only two downtown hotels, the property was too good to pass up, Curtis said.
''For us to duplicate the square footage in the buildings plus the value of nine contiguous acres plus its ideal location would cost us $66 million to $70 million,'' Curtis said.
Secrest said UA presented the appraisals from Snyder and Sours, and the panel was satisfied UA was paying a fair market price.
He said the Controlling Board does not consider county appraisals, as they might not reflect market conditions.
''Every day in real estate transactions, even in the private sector, the market value can be substantially different from the auditor's value,'' he said.
Nor might the $9.8 million appraisal from the county be accurate anyway.
Ray Valle, director of real estate for county Fiscal Officer John Donofrio, said $9.8 million was the appraised value of properties believed to be in the Quaker Square purchase. He said he didn't know exactly what properties were in the UA purchase.
''We don't know if we're comparing apples to apples,'' he said.
Donofrio said the difference in the appraisals from the county and independent appraisers might be due to the number of properties involved and whether personal property is included. He said he and his staff did not have firsthand knowledge of the county's appraisal of Quaker Square, because it farms out commercial evaluations.
Mallo offered to return to a board meeting in Columbus to explain in person.
Secrest, head of the Controlling Board, said at least one of the state representatives on the seven-member panel was receptive to that. But he did not think the board would reconsider its unanimous approval of the UA purchase.
''I don't know what the basis of the re-evaluation would be when we depend on professional, independent appraisers,'' he said.
Carol Biliczky can be reached at 330-996-3729 or cbiliczky@thebeaconjournal.com.
A University of Akron official misspoke before the state Controlling Board on Monday, but it didn't affect the panel's approval of UA's request to buy Quaker Square.
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