The two appraisals for the Beaufort Commerce Park are in and already we can knock off at least $500,000 from the price Beaufort County Council was about to pay in February.
And that's assuming buying this park is a good idea. We're not convinced.
At its Feb. 14 meeting, the council delayed for 60 days a final vote on buying the industrial park for $2.5 million, the amount owed by its owner, the Lowcountry Economic Network. Since then, the network has said it would ask its lenders to take the property in lieu of foreclosure.
The appraisals certainly put the county in a better position to bargain over the price -- again assuming that buying the park is a good idea.
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The appraisal by Raymond L. Murphy of Mount Pleasant estimates the retail value of the park's 138 buildable acres at $3.65 million. That assumes the property is sold in 10-acre lots over seven years. Discounting that to today's market value, the appraiser comes up with a value of about $2 million.
The second appraisal, by Charleston Appraisal Service, comes in even lower. The company estimates a retail value of about $2.9 million and a discount market value of $1.64 million. The company advises that substantial recovery in the real estate market won't be seen for at least three years. Given the commerce park's weak sales history, expect it to be longer for the park.
Murphy calls the park's sales performance "abysmal." No property has sold since 2008, and only about 31 acres have been sold since the network bought it in 2006.
He notes that the network marketed the property only to international, national and regional companies that would bring new jobs to Beaufort County. Local light industrial and service companies that didn't create jobs were turned away. That should change, he says.
But he also notes that sales at other industrial parks in the region, many much closer to rail service and an interstate highway than the Beaufort County park, also have fared poorly in the past two to three years. Both appraisers say demand for industrial sites is very weak today. That's true whether the industrial parks are privately owned or publicly owned.
At Cypress Ridge in Jasper County, held up Wednesday by the network's executive committee as a model to follow, three undeveloped parcels were sold in 2008, the most recent sales there, according to Murphy's appraisal. Jasper County, which owns 241 of the site's 368 acres, bought back one parcel in March 2010 because the site wasn't developed in a timely manner. On another, a building was constructed, but due to the weak economy never occupied. The third tract is still undeveloped. That park's recently announced new occupant, Be Green Packaging, will move into an existing building.
The Cypress Ridge property was donated to Jasper County, allowing the county to sell property in 2008 for $10,000 an acre, according to the appraisal. At the Beaufort Commerce Park, a 27-acre parcel sold for $31,000 an acre and two small parcels for $35,000 an acre.
Beaufort County Council cited two reasons to delay the vote to buy the property: to get new appraisals for the property and to get a review of the county's economic development efforts.
But the review is not in hand, nor is it expected for months. The people appointed to the task force only recently held their first meeting and have asked for more time to do their work. And the county might hire a consultant to help them.
County staff has contacted three economic development consultants; two responded and are to be interviewed by task force members April 25.
Reviewing economic development efforts and determining the best course going forward has to be a key part of a decision on whether to buy the industrial park. In addition to considering whether the county should own an industrial park, the review should determine whether this particular site is right for the job.
The network and the council also owe the public an update on any negotiations with the lenders. County Councilman Jerry Stewart, who serves on the network board, said last week that no agreement had been reached on the deed in lieu of foreclosure proposal.
The public has a stake in all this through its investment in the network, including about $270,000 a year from the county. Other public entities also support it financially.
It's much too soon to be talking about a purchase decision.