The City of Morgan Hill decided to sell a downtown property it
owns to a developer for $303,481 without appraising the lot
’s value last week, in spite of the protests of Mayor Dennis
Kennedy and Councilman Mark Grzan.
The City of Morgan Hill decided to sell a downtown property it owns to a developer for $303,481 without appraising the lot’s value last week, in spite of the protests of Mayor Dennis Kennedy and Councilman Mark Grzan.
Kennedy and Grzan wanted the city’s Redevelopment Agency, which actually owns the property, to have the parcel appraised before selling the land the RDA bought for $197,000 in 1991. The purchase at the time also included a house, which was later moved to First Street and renovated as part of the Parson’s Corner affordable housing project.
The RDA board, whose members are the city councilmen too, voted 3-2 to forego the appraisal and authorized City Manager Ed Tewes to draft an option on the property located at 55 East 4th Street.
Councilmen and RDA members Greg Sellers, Steve Tate and Larry Carr all approved the transaction. They worried that waiting for an appraisal would delay the project and could actually cost the city more money.
“What happens if something is actually found … if the appraisal value comes out less?” Tate asked.
Tewes cautioned council members to be careful what they wished for, indicating a higher selling price could scare the developer away or the appraisal could be lower than what the developer was willing to pay.
Kennedy and Grzan both questioned how the city arrived at the purchase price, and when Business Assistance and Housing Services Director Garret Toy explained the city didn’t seek an appraisal, and just set the price at the same land value as that of the proposed library site downtown, both insisted the city should get an appraisal of the 8,276 sq. ft. parcel.
Toy indicated an appraisal would delay the process by six to eight weeks. Glenrock Builders plans to incorporate the property into their proposed Sunsweet residential and commercial development on Depot Street, between Third and Fourth Streets. Toy said Glenrock Builders plans to apply for a permit for housing allocation before the October deadline and appraising the land could derail the application.
Grzan protested selling the property without an appraisal as a “rush to get things done. … We should do the appraisal, if it delays the process, so be it. It’s the right thing to do.”
Kennedy agreed.
Rocke Garcia, of Glenrock Builders, told the board delaying purchase with an appraisal could affect his entire development plan.
“It’s my money you’re playing with,” he said.
Garcia also told the board if they wanted an appraisal, then there should be two separate appraisals on the land, “one from you and one from me and we’ll meet at the median.”
“I’m comfortable with the price,” he added. “We’re almost at the end of the rope. We started this bid two months ago.”
Tewes said he didn’t believe it was “good business” to ask for an appraisal at this point in time.
To encourage economic development in the struggling downtown, the city council has recognized the need to create more homes near downtown. Carr reminded the board that Glenrock’s project would accomplish many of their goals for downtown.
“This block of property is a keystone to improvements we want to do downtown,” Carr said. “If staff and the buyer say it’s ok. … It’s an important piece of downtown, not being supportive would delay it.”
Grzan said he was concerned about “the number of issues we’ve made decisions in the essence of time. I am uncomfortable doing it, I think it’s better if we make the right decision and have sufficient time to make the best ones. It’s a valuable project, I understand that. I’d like to get away from making decisions because we have to make one now, (that) we have to do it now, because of the time element involved. To me, it doesn’t sit well.”
Carr, Sellers and Tate disagreed.
“We’ve studied the land value and improvements for a year,” Carr said. “It’s not a major decision; it’s a short decision that simply because of time pressure we have to make. I don’t feel I’m missing anything.”
