Last Friday, the city of Bloomington issued a news release announcing a potential real estate purchase.
The city has made a $9.25-million offer to CFC Properties to buy the west part of the former Showers furniture factory building, which is home to city hall. While city hall has a Morton Street address, the other side of the building has the address 320 W. 8th Street.
CFC has accepted the offer, and after various due diligence activities are completed, the closing is expected no later than early next year. The process requires an approval from Bloomington’s city council.
The pending real estate purchase offers a window into some of the statutory requirements that apply to such deals.
In connection with a real estate purchase by the government, under Indiana state law, two appraisals of the fair market value have to be obtained. The offer cannot normally go above the average of the two appraisals. [IC 36-1-10.5]
But if the entity purchasing the real estate is a redevelopment commission, and if the redevelopment commission specifically authorizes a price higher than the average of the two appraisals, that higher price can be paid. In this case, it’s the Bloomington redevelopment commission that is the purchasing agent.
Assistant city attorney Larry Allen cited the state law [IC 36-7-14-19] at this past Monday’s meeting of the Bloomington RDC, to explain why an offer of $9.25 million had been made, when the two appraisal amounts were $5.5 million and $7.69 million. Allen gave those two amounts at Monday’s meeting.
The B Square’s request for a copy of the two appraisals has been denied by the city of Bloomington, based on the same state law that allows the purchase price offered by an RDC to exceed the average of the two appraisals. The wording of the statute goes like this: “Appraisals made under this section are for the information of the commission and are not open for public inspection.”
But the same state law also requires that when the RDC buys property that it “first approve and adopt a list of the real property and interests in real property to be acquired and the price to be offered to the owner of each parcel of interest.”
So The B Square has made a request for the records that show 320 W. 8th Street as a property on the list adopted by the RDC, and a copy of the records showing the RDC’s approval and adoption of the list. The city has not yet responded to that request.
Besides the amounts of the appraisals, of possible interest to the public are answers to questions like: Who did the appraisals? When were the appraisals done? How much were the appraisers paid?
Some of those answers are available through the city’s online financial system. On May 27, 2022, Figg Appraisal Group was paid $7,500 for its appraisal of the 320 W. 8th Street property. Also on May 27, 2022, First Appraisal Group was paid $3,250 for its appraisal of the 320 W. 8th Street property.
Based on the city’s financial records going back to 2014, those two appraisers have done much of the appraisal work for the city. For that period, First Appraisal Group has done 27 appraisals, and has received $73,950 for the work. Figg Appraisal Group has done 18 appraisals and has received $43,200 for the work.
The city’s online financial records also show that this is not the first time in recent years that the city has asked for an appraisal of the 320 W. 8th Street property.
On March 8, 2019, First Appraisal Group was paid $5,000 for an appraisal of the 320 W. 8th Street property. And on April 19, 2019, Gilbert S Mordoh & Co. was paid $2,500 for an appraisal of the property.
The “description” field for the transaction under which Mordoh was paid for its appraisal includes the note “Res. 18-63”
If that note is a reference to the Bloomington RDC’s Resolution 18-63, then it’s not clear how the payment for Mordoh’s appraisal could have been made under the authorization of that resolution. The RDC’s Resolution 18-63 gives authorization for up to $50,000 for appraisals—but it’s for property located near Switchyard Park. The Showers building is over a mile away from the closest edge of Switchyard Park.
[Added on July 23, 2020 at 10:04 a.m. As part of the initial news release from the city of Bloomington on Friday a week ago, the idea of relocating the administrative headquarters for the fire and police departments was included as part of a planned expansion of city hall.
The news release described the impetus for the move from existing fire and police facilities as the June 2021 downtown flood, which damaged the fire headquarters on 4th Street and the police headquarters on 3rd Street. According to the news release, rehabbing existing buildings is “inadvisable” due to cost and the risk of future flood risk.
About those existing fire and police facilities, the news release states, “Plans for the current police and fire buildings, at 220 E Third Street and 300 E 4th Street respectively, will be determined at a later date.”
Selling the police headquarters building looks like it has been an option weighed by the administration before last year’s flood, as long as three years ago, based on the fact that appraisals were done on the property in 2019.
On May 31, 2019 Gilbert S Mordoh & Co. was paid $2,500 for an appraisal of 220 East 3rd Street, which is the property where Bloomington’s police department is headquartered. And on Nov. 17, 2019, First Appraisal Group was paid $2,700 for the appraisal of the same property.]
|First Appraisal Group, INC||27||$73,950|
|Figg (Figg Appraisal Group), Richard S||18||$43,200|
|Gilbert S Mordoh & Co., INC||16||$38,500|
|Monroe Owen Appraisal, INC||15||$64,210|
|Pfrommer Appraisal, INC||1||$350|
|Goldin (Goldin Appraisal Group, Jeffrey A||1||$1,075|
|Environmental Hazards Services, LLC||1||$100|
4 thoughts on “Property acquisition notebook: Appraisals of former Showers building, also done 3 years ago”
Keep investigating this Dave. There is some corruption going on. I don’t know how the deputy mayor’s company can broker a deal and him say he had no hand in it, and I don’t know how the RDC can use LIT money to buy said property, or why they would pay so much over the appraisal value. Someone is getting the pockets lined. I hope you uncover who it is.
The Deputy Mayor’s company didn’t broker the deal. The companion article stated that the asking price was much higher and CFC wouldn’t accept the appraisal price, so the offer was higher than appraisal but lower than asking price
I could set an asking price for my home that was over the moon, but loan originators generally loan to appraisal value. Such a large difference between appraisals and purchase price raises questions that should be answered in greater depth–all the more so when public money is involved. Thanks for exploring this, Dave.
where does the 10.02 million dollars come from?