Monday, July 11, 2011

Countryside neighborhood gets a double dose of home devaluation

Watering the 12th green.

The “city spin” says Countryside will have half of the 130 acres undeveloped and oh what a favor they are doing for the neighborhood. Excuse me but that “half left vacant of development” includes a flood zone, airport noise contour, typography challenges, a runway protection zone and improbable development on narrow fairways with no ingress and egress.

Even parcels planned for development flood or are in or next to the airport noise contour. This is in part no thanks to the widening of the RPZ and unequal swapping of land with the airport authority. The RPZ now devoid of trees is noisier than ever. Planes fly lower and trees that blocked some noise are gone.

By the way the FAA has not changed their rules on what can be on a RPZ. Their policy still says a golf course but then the local airport authority has the final word on that.

The neighborhood since 2005 had been telling city leaders that their homes would devalue significantly if the golf course was exterminated. Oh no they said, it will be better for your neighborhood, the community and the city.

First Hole

We never swallowed that “la-la land” thinking. The real estate agents whispered the same in our ear. As Mike Higgins told Council on June 20 it was like having oceanfront property – the ocean dries up and the value of your dream cottage by the sea evaporates.

The last home that sold above assessment was bought when council and the city assured the purchasers that the backyard would remain an 18-hole golf course. Two weeks after moving in city council pulled the rug out from under them and the golf course was closed.

They are way underwater on their home now. They paid a chunk over the assessed value for the very reason it was on a golf course.

Next door to them the house went up for sale shortly after the golf course was closed. It is assessed at the same value. For over a year the price kept being reduced. It sold last month for $8000 BELOW assessment.

The house directly across the street from this house is now priced $3,000 below assessment and it sits and sits, reduced and reduced. Even the 1970s townhomes are pricing below assessed value.

It is true that all home values have taken a hit but the folks at Countryside had at least an edge for marketing their homes at a better price before the golf course closed. Let me repeat for the 100th time – homeowners PAID UP for the homes built on the golf course. In case you still don’t understand – that means we paid MORE money for our homes because it is WELL KNOWN by realtors that a home on a golf course sells for MORE then one that is not on a golf course. The same goes for lake access like Smith Mountain Lake. Just try to drain it and see what happens to those who built on the lake.

Barn View

At the Planning Commission public hearing Kit Hale sales manager with MKB Realtors grilled me over why I thought our homes had devalued. He seemed to have forgotten one thing. MKB was the listing agent for the “Countryside Cottages.” MKB sales agents touted it as a golf course community in ads, the MLS book and in open houses.

He turned a deaf ear to that though. Just a few months before one of Mr. Hale’s agents listed a townhome on Ranch Road advertising that it backed up to a “golf course.” I reminded him of it quietly at one of the Planning Commission work sessions and he had the agent remove that “selling point.”

Roanoke City has shot itself in the foot. There is no drawing card to prop up home prices here. No homes will be built that compared to the value they had when it was a golf course. The $2.6 million balance on the $4.1 loan will be refinanced as Ann Shawver director finance told city council. This is after already paying $1 million of interest on the loan.

As the “city spins” reality waits.

Needless to say we will convene at the real estate assessors office soon. In boom times the city was not slow in increasing our assessments. The sad reality is that homeowners don’t realize their homes are over-assessed. Shawver told me that the city tries to assess home values five percent below what the owner might be able to sell it for. If that is the case Roanoke City is in big trouble. Real estate taxes account for 30 percent of the city’s revenue stream.

The reality is localities hope the homeowner won’t notice – that is until they go to sell their home. The appeal process is another deterrent – they through mumbo-jumbo at the homeowner hoping they will give up and most do. The only recourse may be for the homeowner to go to court.

Posted By Valerie Garner

Categories: Commentary, Community, Finance

Tags: , , , , ,

Comments (5)

Jack Mcguire

July 11th, 2011 at 3:47 PM    

Obviously when a home is next to a golf course when purchased(or during ownership),and the golf course is removed,the value goes down.That is a huge selling point.
Everyone,even Council knows this.They are just playing a game to cover their sorry behinds.Its a familiar game with Council here in Roanoke.Allow property to deteriorate to the point of no return and then throw up their hands.They do it on many issues from Victory Stadium to our drinking water.That is why our water bills have tripled today.If Crystal springs had been properly maintained,our alliance with the County would not have been needed.In reality Council has sold the Countryside neighborhood down the river.And I dont blame them for being furious.


July 11th, 2011 at 4:18 PM    

You went directly to the bottom line as you always do Jack :)

Bubba Greene

July 21st, 2011 at 10:07 PM    

HEY! “Stuff Happens” Get over it. My opinion is that the absence of the golf course is not so much of a problem as the presence of the airport, the presence of the interstate, the presence of the schools and the character of the surrounding property. Lets face it, Cove Road ain’t exactly Carolina Ave. Countryside was a nice little development in the middle of a bunch of MUCK. When people looked at those properties the RE agents must have put blind folds and ear plugs on the client. You might mount a flying lady on the radiator but it don’t make your Buick a Rolls! Just wondering as well, had the plan for those $500,000 homes materialized and had they sold out with owners who really could afford them and had the market not crashed as it did and had all those cheap little houses gotten a boost in value would you be complaining about the situation???


July 22nd, 2011 at 1:47 AM    

Stuff happens? It just didn’t happen to you Bubba. How do you like paying $4 million of your tax dollars for it plus interest. $500,000 houses – Darlene was smokin’ something and we knew it and so did Toll Brothers when they saw the property after reposponding to the RFQ sight unseen … from the Roanoker in 2008 – the best story anyone made the effort to write …

Be that as it may, Countryside may not have been the silver bullet they (the City) were seeking.

“Ask any developer if the Countryside land was a good bet for that kind of housing and they’ll tell you‘no way,” says a Roanoke-based developer familiar with the project, who asks to remain unnamed. He ticks off a laundry list of “no brainers” that he sees as deterrents to the high-end development the city envisioned.

Among them:

•The Countryside parcel’s irregular land shape, withnarrow fairways and a large central chunk of land thatis unbuildable thanks to an airport “clear zone.”

•A ribbon of floodplain surrunding Lick Run Creek, which runs through the property in a southeast direction, also reducing the amount of developable land and creating challenges for stormwater management.

•The proximity of noisy I-581, which defi nes the eastern edge of the property.

•Incoming and outgoing flights that also contribute to noise pollution. Countryside golfers accept the roar of overhead engines as part of its quirky charm, a small sacrifice in exchange for an inexpensive day on thegreen.

Likewise, those who live on the course’s periphery have learned to live with the noise because theyenjoy the views of Countryside’s open green expanse, their communal and de facto back yard. But once the span green had been turned into housing, future homeowners would have no such compensation for the noise.

Add to these factors the poor performance of surrounding schools and the predominance of low- to middle-income housing that characterizes northwest Roanoke, and it makes the prospect of attracting highincome buyers even more questionable.

The Roanoker conferred with three additional real estate appraisers estate appraisers with intimate knowledge of the Countryside parcel. Each has more than 20 years’ experience in the fi eld, and each believes that the kind of development the city had planned for the property was unrealistic at best.

Could that be why the first potential developer to sniff out the deal walked? Toll Brothers, a venerable high-end national developer, initially responded to the city’s request for a proposal in fall 2005. But in February 2006, Toll Brothers backed out. In a letter to City Planner Chris Chittum, Toll Brothers Realty Trust Assistant Vice President Timothy W. Norman wrote that the company was “not interested in pursuing the project” because the “Toll Brothers product line would not fit the needs of the local market.”

Long before the 2005 sale, the problems were described in a 2002 project memorandum by the Davidson, N.C., offi ce of Lawrence Group Architects, a national concern. It was the one and only outside study the city commissioned on the project. Concluding that development was “feasible” but “not without challenges,” it suggested the city negotiate a one-year option period to purchase, during which time it should conduct a weeklong, intensive public planning workshop, including lawyers, developers, city representatives and community members, to get things off on the right foot. Th e rough master plan conceived there could then be “shopped around” to developers.

No such workshop was held, and early promises that the city would involve Countryside’s neighbors in the planning process were brushed aside.

“There were too many discussions behind closed doors,” Vice-Mayor ShermanLea recalls. “Th e [neighborhood] began to lose trust in us.” Emails sent by Lea and then-fellow Councilman Brian Wishneff between May and September 2005 pleaded with Burcham for greater neighborhood involvement. They were met with resistance.

“My concern then was that we didn’t have a plan. We reacted instead of being proactive. … The concept was good, but I wish we had a little more research,” Lea says.

Although he was eventually “convinced” to authorize Burcham’s purchase, he says he is now in favor of preserving Countryside as an 18-hole golf course.

“An experienced developer would say if I can’t do A, I could B. If I don’t do B, I can do C, D or E,” our source says. It’s clear that the city did not approach the project with a developer’s eye.

Another developer with signifi cant property interests in Virginia says that, in an already high-stakes game, odds are stacked against public entities in the fi rst place: “Th e option period is any developer’s contingency plan. If market conditions change, he can pull out.

So where does this leave us? For now, the strategy of fi nding an operator for a 10-year lease has quieted neighborhood rage – but Townsend is clear that once the market turns around, all options are back on the table. When that will be is a matter of speculation, as is the question of whether developers will flock to a land parcel that is problematic even in the best of times.

Courtesy of The Roanoker Magazine

Bubba Greene

July 22nd, 2011 at 8:00 AM    

Among my points is that it’s time to move on OR maybe just plain MOVE. We have both mentioned numerous reasons why folks should never have invested in property in that area in the first place…and only ONE reason why they may have been attracted. A golf course. (Of course what was really there all along was a large parcel of open land in a urban landlocked city. Suspect it should have been recognized for some sort of neighborhood development all along.) As far as the success of high end development, it was very possible and probably would have happened had it started 7 years sooner. As far as a waste of money, your correct but in the scheme of things your tax dollars are being wasted on a much grander scale but you appear to be disconnected from that waste and you continue to APPEAR to run with the local dogs that are responsible for most of it. No slam intended, it’s just an amusing conflict that seems to show up from time to time. One may think you are a prime candidate for a Tea Party activist but my bet is that’s a bad guess.

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