Jonathan Galgay sent along an email to add some information to the post last week about the city's tax assessment for the property at 50 Beaumont Avenue, also known as I.J. Samson school.
He's adds some useful background about how the city arrived at a value: the waited for the sale.
Galgay also adds some other information that matches up - ironically enough - with the reasons the school-board offered up for the relatively low cost of the sale despite the fact it's a big piece of land in the centre of town.
"The sale price," Galgay wrote, "would have been reflective of the risk associated with the unknowns for the cost of environmental remediation , demolition of the building and uncertainty with regard to redevelopment potential related to the necessary rezoning of the property."
Exactly. The property is worth what the market will pay for it. And the property, as it is, comes with lots of risks, as Galgay noted.
Funny thing is that a couple of weeks ago, Galgay wrote to the provincial auditor general asking for an investigation into the process of tendering and sale of the land and building. Galgay said he was "disgusted" by the sale. Plus, as Galgay notes below, the city can reassess the property as it is developed and increase the tax bill to reflect any future development. That's pretty much what folks in the real estate industry said two weeks ago.
Here's Galgay's email:
"If you are wondering if we can assess it higher our hands are pretty much tied. The reason behind this is:
- The property is assessed in its present state with its present zoning.
- Its present state is a vacant school with known but unquantified environmental issues. (asbestos and hydrocarbons).
- Its present zoning is Institutional which has limited market potential.
- The only market evidence of value that we have, is the actual sale of this property.
- The sale price would have been reflective of the risk associated with the unknowns for the cost of environmental remediation , demolition of the building and uncertainty with regard to redevelopment potential related to the necessary rezoning of the property.
- Rezoning is not a right , so there is a chance that the City would not rezone, or if it was rezoned, the City might be restrictive in what it would permit. For example the City might decide that only low density residential development would be permitted. A residential use would require a greater degree of environmental remediation than commercial development.
- The present asking price is not for the property in its present state. The listing includes the demolition and removal of the building and the environmental remediation. Which are unknown costs.
- The asking price is just an asking price and if sold will likely be something less than that.
- Any offer made for this property will likely be subject to rezoning and Development Approval for a specific proposal.
- There are so many unknowns that the value of what is being offered for sale (property, demolition, environmental remediation) is difficult to determine, however the value of what exists ( property with old school, environmental issues, and zoned institutional) has been shown to be $189,000 based on the recent sale.
- It is important to differentiate between what was sold and what is being offered for sale.
- If the property should change, in that the building is demolished , the environmental work is completed and/or the zoning is changed , then the property value will also likely change and the property can be reassessed."