By Bob McGarry, First Selectman, Haddam
(October 26, 2022)—Some have questioned the purchase price for the Rossi property and compared it to the value the town places on it for tax purposes. Tax values are notoriously low and are simply a snap shot in time when the town conducts a mass appraisal of the entire town. They are not a reflection of current market value. For example, I looked at one property in town with a tax value of $320,000. The owner paid $370,000 for it in 2016 and Zillow estimates the current market value to be $520,000. Tax values are used to set the mill rate. They can’t be used to estimate market value.
There are different ways to appraise commercial property. The Rossi’s presented an appraisal recently prepared by a Connecticut Licensed Commercial Real Estate Appraiser. The appraiser had the MAI designation, which is one of the highest designations an appraiser can achieve. This was not just a “fly by night” appraiser who would present whatever value the seller wanted. His appraised value of $2.54 million was based on how the property could be developed.
Another way to value property is the income approach. The current income from the property is $96,000. We spoke to a very experienced Middlesex County commercial real estate broker. Based on the income produced, he indicated a $2.3 million value is appropriate.
A third appraisal method is a replacement cost analysis. We looked at the recent land sale on Brookes Court where the apartments are being developed. In that instance 4 acres of vacant land sold for $1.1 million. (Admittedly, Brookes Court was approved for apartments, but at the same time it did not have buildings and a cash flow. It’s hard to get an exact match.) Using the $1.1 million as a land value and a very conservative $100/square foot replacement cost to value the 17,000 square feet of metal buildings and 7,000 square feet of brick buildings on the Rossi property results in a value of $3.5 million.
There are other intangibles at play with this purchase. I have to wonder, will our efforts to create a town park at Higganum Cove be successful with only nine parking spaces and no meaningful connection to the Center? Will our efforts to create a Senior/Community Center and multi-generation park at HES be successful adjacent to the Rossi property in its current state? Will the $3 million redevelopment of the Scovil Hoe property attract the types of tenants we all desire with the Rossi property in its current state?
The Rossi property can be the linchpin in Higganum Center that ties everything together. It can be the critical piece stimulating further revitalization of Higganum Center. However, in its current state it is more of the rotten apple that can spoil the whole barrel. The question before us is very simple. Do we act now or continue to do nothing while the property continues to deteriorate?
Please attend the public hearing on November 2, 2022 at 6:30 p.m. and vote the town meeting on November 9th at 7:00 p.m. Both will be at the Haddam Fire House on Saybrook Road.
