Deeds steamed: The appraisal that may have burned taxpayers
The controversial deal has drawn the ire of State Senator Creigh Deeds.FILE IMAGES
Any homeowner seeking a loan or a refinancing might be wise to hire Patricia Filer. If her appraisal of Biscuit Run is any indication, she has an ability to find value above and beyond what the market will bear.
Biscuit Run–- a massive undeveloped neighborhood saddled with debt and trapped by an unforgiving housing market–- appeared to be rescued by a year-ago deal that hinged on a mysterious appraisal. When Courteney Stuart penned her investigative cover story two months ago, she theorized that the only way the tract's wealthy investors could have paid off their delinquent loans and retained their investment was finding an appraiser willing to value the place four times higher than one arm of the state did.
Apparently, they found such an appraiser in the form of Filer at Orange-based Piedmont Appraisal Company. A story by freelance reporter Will Goldsmith asserts that Filer valued the land at $87.7 million.
"That's a big number," says State Senator Creigh Deeds. "That's just a big number."
But as Goldsmith reports in an upcoming issue of C-Ville Weekly, the big number is already receiving state scrutiny, as it comes in nearly double what was paid for it and more than seven times larger than the 1,200-acre parcel appraised for the Virginia Department of Transportation.
Finding a large appraisal was the key to an effort to trigger massive tax credits for the property's sellers who bought their parcel in 2005 for a then eye-popping $46.2 million and then made the mistake of rezoning it for housing–- just in time for a collapse of the housing market.
Any reduction in the allowable tax credits would appear to create wallet-shock for the wealthy Biscuit Run investors who include Dave Matthews band manager Coran Capshaw, Dave Matthews Band violinist Boyd Tinsey, and banker Hunter Craig. Their end-of-2009 deal selling the place to the state caused controversy not only over the secrecy-shrouded appraisal but because it took the land out of the Albemarle growth area for a state park of questionable value.
The deal was approved at the highest levels of state government complete with a sort of victory lap press conference presided over by outgoing governor Tim Kaine.
"I think somebody's head has to roll," says Rob Schilling, a former Charlottesville City Councilor who now works as a talk-show host with a particular affinity for shedding light on abuses of taxpayers. "That this number had to be dug up or extracted shows that somebody was scared of the media finding out."
Throughout the various media investigations, state officials insisted that revealing the number would somehow compromise private taxpayer information, and Goldsmith reports that deal orchestrator Hunter Craig, recently appointed to the UVA Board of Visitors, hung up before they could discuss the Filer appraisal. Courteney Stuart had a similar experience a few months ago–- with Filer.
When investigating her story, Stuart began calling the major Central Virginia appraisers qualified to value such large enterprises. While most denied any knowledge of the Biscuit Run deal, Filer gave this tantalizing reply: "I can't help you with that– I'm sorry," she said before hanging up the phone. A new request for comment, left December 22 on her office voice-mail, was not immediately returned.
Records on file with the state's board of professional regulation show that Filer, whose last name in the state database is given as O'Grady-Filer, earned her appraisal license in 1995. The state is prohibited from revealing whether any active complaints are lodged against her, and the record shows no evidence that Filer has ever been the subject of a completed investigation. She will, however, need to renew her license by next October.
The Department's records indicate that two appraisers had their licenses revoked last year and that already this year there have been four revocations in addition to various other lesser punishments for appraisers who fail to abide by professional standards set by the federal government.
"The entire industry has been getting more scrutiny due to the real estate bubble," says Mary Broz-Vaughan, the spokesperson for the Department of Professional and Occupational Regulation.
As for the value of the Biscuit Run tract, journalist Goldsmith asserts that the state Department of Taxation chose $39 million as its worth, a measure lower than Filer's but more than triple VDOT's, which was at $12 million.
For State Senator Deeds, the bigger picture is not one particular deal but the viability of a program he considers his "baby," something he pushed fellow lawmakers to create when he was a Delegate representing the greater Bath County area.
"The tax credit program was my baby because I was convinced we had to create incentives to protect open space," says Deeds. "When I see the tax credit program abused, it really bothers me."
Deeds says he plans to introduce legislation enacting stricter standards during the upcoming session of the General Assembly.
–updated 12:15pm Thursday, December 23 with Filer's good standing with the state and again at 2:19pm with comment from Schilling.
31 comments
Who cares? Land slated for an ugly development is now preserved. I don't mind overpaying for that. Keep albemarle's rural character.
So Coran Capshaw and Boyd Tinsley ripped off the taxpayers of Albemarle County and the State of Virginia to the tune of how much money?
Wow. Just, wow. Don't these guys make enough money? Do they have to rip off the public too? Tax dollars go to support schools, police, hospitals, poor people, etc, etc, etc.... It's not supposed to subsidize the bad investment decisions of millionaires.
I am personally disappointed in those two. Hunter Craig is a businessman and I would expect him to try to get a sweetheart deal.
I guess the Dave Matthews Band really is only about making money and will literally steal money from poor people to do it.
Wasn't there a Sopranos story line where Tony Soprano hired some bogus appraisers to overstate the value of real estate in order to rip off the government (AKA, the taxpayers)?
So Coran Capshaw and Boyd Tinsley are the moral equivalent of Tony Soprano.
You all left this line out from Ms Stuart's article - I thought Deeds and Kaine were from the same political party: "On January 8, at an event held at Monticello that one attendee called a ââ?¬Å?victory lap,” outgoing Governor Tim Kaine proudly announced that the state had purchased the land December 30 for a ââ?¬Å?bargain” price of $9.8 million." Shouldn't he be yelling at his old pal Timmy boy. Good ol' dems just as dumb as the rest of us....
Well, bisquit run in sort of in my back yard. I'm curious how much my land has been appreciated because of this.
Didn't the value of the land go up after Craig, et. als. bought it and it was re-zoned to residentail? What value did the BoS place on the land when it computed how much annual taxes it would be losing as its being a state park? Accusations of fraud are bound to arise when there is a continuous lack of transparency. Yes, Deeds and Kaine are in the same party and know each other well.
The day is fast approaching..............
Someone should report this to the IRS. Might result in a whistleblower reward. This goes beyond greed and political corruption.
There goes that DMB tour bus again. Dumping its sewage down on the heads of the peasants.
There should be a criminal investigation.
The property was already (unbeknownst to the original buyers, but the market was already tipping by the time the ink was dry on the deal) not worth the 46M paid and by 2009 certainly sure to go begging on the open market for half that. By that time big residential developments such as originally envisioned were dead in the water. The 87M appraisal was clearly made to order and I wonder what sort of off the books proffers were used as inducements.
The whole deal stunk to high heaven when first done and stinks worse now. This would do "Chinatown" proud.
Award-winning reporting about Biscuit Run from the very beginning, Hawes. Kudos to The Hook. Now, is there a Commonwealth's Attorney with jurisdiction and courage to bring charges on behalf of the public? Or how about AG Cuccinelli taking this on? This foul-smelling, sweetheart deal is an affront to all ethical taxpayers in Virginia.
Isn't $39 million really the relevant number, given that's what the Department of Taxation eventually valued the property at?
@Yes, in closed-door politics, we have no way of knowing whatnumbers they will use. That's why crooks have always been attracted to government positions.
@Yes, are you implying that the $39M figure was used? Then what was the justification for the $11M figure? What is the percentage of value the Dept of Taxation used? I'm sure you've read it somewhere.
By using "implying," it says to me what I said, we don't actually know. We don't know if they used a factor of 40%. Howev er, we can say that IF the the $39M valuation was used, THEN they received approximately 40% of that valuation minus the selling price in tax credits, thereby not saying something is a fact when we don't know that it is. We do not KNOW if the Dept of Taxation actually used the valuation from its appraiser or a valuation between that value and some other or some other. Since appraisers often have a range between their valuations of the same entity a decision has to be made as to how the valuation is arrived at.
Observer:
Who cares? Well, anyone who understands that a pathetically "lite" reading of a cartoon version of a Cliff Notes edition of Niccolo Machievelli's treatise, The Prince, knows that ends justify means only in warped imagination. Your view is so simple I won't complicate it in conversation. I'll just remind you that if someone can break all rules for a result you like, that same person can break all rules for a result you hate. Think, people, as one of my better teachers used to say.
Better get those guarded and gated communities built fast, the time is fast approaching when class warfare will erupt.
Cronyism at it's finest.
I have updated the story today in a couple of places.--hawes spencer
Those detecting a foul civic smell in the area of Biscuit Run may be picking up some of the stink wafting that way from the intersection of Ridge Street and Cherry Avenue in town. There, City Councilors and their board appointees have worked dilligently over the last few years to give their very, very, very good friends at Southern Development all those friends ask whether what they ask is right, smart, or good for anyone else.
The latest pungent effluent oozed into neighbors' mail boxes yesterday evening -- i.e. Christmas Eve eve. A letter informed us that on January 12 next City Council and Planning Commission will hold a Joint Public Hearing on a request by SD to modify the PUD approved for that 2.87 site in the fall of 2009. The changes wanted include "modifications to the building site location" -- a critical matter in that the property is a steep-sloped, wooded ravine -- and a back-off from the much touted LEED certification that SD pledged.
Given that we're in full holiday mode and that business-as-usual will not resume for many until January 3, the letter effectively gives just eight days notice for what will be the sole opportunity to comment before Councilors act at their next regular meeting. But considering that Councilors have undoutedly decided already to give their very, very, very good friends at SD what they want yet again, the scheduled hearing is simply more of the pretend-like process that has characterized this whole sorry saga.
This situation began with a Councilor's inappropriate promise to Dr. Charles Hurt (SD's creator) of two City-owned parcels on Ridge Street. Pursuant to that promise, Dr. Hurt bought five adjacent parcels. Despite neighborhood opposition, Councilors decided in mid 2007 behind closed doors to sell the lots. To make that happen, they put a pretend-like public hearing on their December agenda. A petition drive pushed that schedule back. With 100 signatures, citizens asked Councilors to follow City policy for public property divestment (basically, do a cost-benefit analysis) and to conduct a traffic study before proceeding.
Councilors blew that request off. Instead, they issued a faux Request for Proposal describing the existing SD plan, then selected a secret committee of three to approve it. Another pretend-like hearing was set for August 2008. (Note that crucial steps in this matter are always scheduled for times when people concerned are most likely to be out-of-town or otherwise occupied.) When neighbors chose to boycott that bogus hearing, Councilors criticized us publically for being deadbeats.
Both sale and plan were subsequently approved, of course, despite more opposition. And as soon as that process was complete in the fall of 2009, SD put the cheaply-acquired package up for sale for $2.3 million. Obviously, no one has bought it. Hence, the latest odoriferous onslaught. N.B. If online property records can be believed, SD has never actually paid for the two City lots and, therefore, never even paid modest property tax on them. A sweetheart deal, indeed.
No, the article is clearly implying that the $39 million figure was used.
And casual familiarity with basic arithmetic would lead one to conclude that the percentage of value used by the Department of Taxation is approximately 40%.
After all,
11.7 / (39 - 9.8) = .401
31.2 / (87.7 - 9.8) = .401
Are appraisers not certified and licensed? Is there not such a thing as appraisal fraud? Do they not have to justify their appraisal with comps?
The state should auction the property off with a reserve price of 25 million and see how high it goes. If it goes for 25 million then they should give Albemarle the 9.8 nillion it spent to replace Bisquit run (with much more acreage) and keep the rest for other projects.
If the price falls below the reserve that should be the apprasial as that would be exactly what it is worth.
I wonder if she has a connection to Tim Kaine and the democratic party?
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I'm sorry, but this has to be criminal somehow. The appraisal at 87.7 is a bit over 73,000.00 per acre. This is how the housing boom and bust was created with wild appraisals to inflate prices. There is no way they should be able to have tax credits either on the difference between 87.7 million and what the state payed at 9.8 million.
Classic.
Off with Boyd Tinsley's head!!!!
These people are known to give lots of money to the Democratic Party and I guess the government thought it should give some tax money so that they can continue to give. Did anybody notice who Boyd Tinsley was hugging in the picture taken at the announcement of the deal? Democrat or Republican, it's all about big money, usally taxpayers' money.
Well, those of us who bothered to read the relevant article have a way of knowing:
"Thanks to documents provided to C-VILLE, taxpayers can finally knowââ?¬â?at least for now. While Biscuit Run investors sought $41 million total from the state, they have so far received only $21.5 million.
It has long been public record that the Commonwealth of Virginia paid $9.8 million cash for the Biscuit Run property. Yet Biscuit Run investors, in a limited liability company called Forest Lodge, made the transaction knowing that they would receive land preservation tax credits, which aren’t public record. C-VILLE, however, has obtained a copy of a letter from the state tax department that shows that the investors have received $11.7 million in tax credits.
That’s significantly less than they wanted. Forest Lodge LLC investorsââ?¬â?who include developer Hunter Craig as well as Dave Matthews Band manager Coran Capshaw and DMB violinist Boyd Tinsleyââ?¬â?requested almost $20 million more. Forest Lodge LLC contended that it should receive $31.2 million in land preservation tax credits, based on an appraisal by Patricia O’Grady Filer of Piedmont Appraisal Company that valued the land at $87.7 million."
"However, an appraisal produced for the Virginia Department of Transportation valued Biscuit Run at only $12 million, so the Department of Taxation authorized its own appraisal, according to the letter provided C-VILLE. The tax department appraisal put the value of Biscuit Run at $39 million, and the tax department issued Forest Lodge LLC a reduced amountââ?¬â?$11.7 million in tax credits."
Cville Eye, deficient in reading comprehension, arithmetic, and epistemology.
The C-Ville article clearly indicates that the Department of Taxation's $39 million valuation was used. "The tax department appraisal put the value of Biscuit Run at $39 million, and the tax department issued Forest Lodge LLC a reduced amountââ?¬â?$11.7 million in tax credits." Note that the sentence clearly suggests that there was a causal relationship between the valuation and tax credits. Granted, the reader does have to make an inference based on information provided throughout the article, which is obviously beyond the intellectual capacity of some individuals, but the meaning is rather clear.
Of course, the journalist could have lied or misunderstood the document provided by the Department of Taxation. In that sense, we do not "know" with absolute epistemological certainty, but this is the case with our understanding of all empirical phenomena.
What "all empirical phenomena" are you talking about, just out of curiosity? As for computation I would have simply divided 11.7 by .4 or multiplied it by 5 and then divided by 2 and then added 9.8, all of which is easily done mentally.
I'm children like you believe what you read, information that is provided by a third party. That allows you to "know" a great deal. I believed for over a decade that Iraq invaded Kuwait and took all of Kuwait's incubators back to Iraq. I just knew they did.