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Joel Purchase?

Funny that the city would be looking at a cash infusion of $47 million (based on the appraisals) and annual savings of $1.6 million and all the comments from the city council are about preserving the names on the Coliseum and the Stadium. And an appraised value of $37.1 million is worth looking into. There is only one logical buyer for the property and given enough time, the buyer has other options than to purchase the arena. Wake should look into buying the note on the property and then forgiving the city's remaining debt.

If the city council discussed the apparisal of the buildings in an open meeting, I would assume that the appraisal is available for the public to examine.
 
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tsywake said:
Todays article: http://www2.journalnow.com/news/201...quotaggressively-pursuequot-sale--ar-2091027/

The Joel was appraised and valued at 37.1 million, which seems high to me.
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It depends on how the appraiser arrived at the value estimate. Appraisers use multiple approaches to arrive at an estimate of value. One approach is to estimate the replacement cost -- what would it cost to rebuild it today plus the value of the land underneath it -- and $37.1 million does not seem high at all for that. In fact, it may be low.
 
I could see that as the replacement cost, but its almost 25 years old now. There's got to be some depreciation on it. I cringe at the thought of having to build a new arena right now.
 
Forsyth County appraised the land (11.83 acres) and building for about $25 million in 2009. The also estimated that the 20 year old building is only 20% depreciated, meaning that with regular upkeep, the expected economic life fo the building is 100 years (straight line depereciation). that's obviously less than the $37.1 million mentioned in the article. the university should buy more land than is currently allocated to the Coliseum in the parcel, as the lot basically includes the parking lot in front of the Coliseum to the west and some to the east, but none of the parking to the south.
 
Wake should lease the building 24/7 from October 1- March 31.
 
The assessed value that the tax assessor's office comes up with rarely equals the market value, and it's often lower. If assessed values equaled market values, there would be no need for appraisers.

ETA: Any potential buyer will hire its own appraiser instead of accepting the seller's appraisal, so Wake is not going to simply accept an appraisal commissioned by the city.
 
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DinDC said:
The assessed value that the tax assessor's office comes up with rarely equals the market value, and it's often lower. If assessed values equaled market values, there would be no need for appraisers.
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Done properly it should at least approximate market value. And it is required to be so by NC law. The people in the assessors office are typically appraisers. We've got 42,000 tax appeals in Mecklenburg County where they proeprty owners (residential and commercial) think the values are too high.

Steel prices and oil prices (asphalt roofing materials) have risen since 2009, which could account for some of the difference in cost.
 
Yes. And typical coliseum design has changed a lot in the past 22 years since the Joel opened. Which makes the coliseum obsolescent in a number of ways. Compare the design and features of the Joel to the new UVa arena. That's obviously a nicer building from the word go, but that's how they're built now. If Wake were to build an arena now, it would look nothing like the Joel.
 
tsywake said:
I could see that as the replacement cost, but its almost 25 years old now. There's got to be some depreciation on it. I cringe at the thought of having to build a new arena right now.
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Didn't UVA's new arena cost somewhere in the neighborhood of $150 million? It holds maybe 1,000 more than the Joel. $37.1 million is a bargain. (And that includes the value of the land.)
 
HeavyPetter said:
Yes. And typical coliseum design has changed a lot in the past 22 years since the Joel opened. Which makes the coliseum obsolescent in a number of ways. Compare the design and features of the Joel to the new UVa arena. That's obviously a nicer building from the word go, but that's how they're built now. If Wake were to build an arena now, it would look nothing like the Joel.
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Right, but the appraiser is only concerned with the cost of rebuilding the same structure plus the land value.

The appraiser would have also estimated the value based on an Income Approach (the present value of future cash flow) and Comparable Sales (problematic to say the least).
 
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DinDC said:
The assessed value that the tax assessor's office comes up with rarely equals the market value, and it's often lower. If assessed values equaled market values, there would be no need for appraisers.

ETA: Any potential buyer will hire its own appraiser instead of accepting the seller's appraisal, so Wake is not going to simply accept an appraisal commissioned by the city.
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No kidding.
 
DinDC said:
Didn't UVA's new arena cost somewhere in the neighborhood of $150 million? It holds maybe 1,000 more than the Joel. $37.1 million is a bargain. (And that includes the value of the land.)
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Disagree. $37.1 would be a rip off. The property has one potential buyer as a coliseum. Otherwise, it's value is only in the land it sits on. The market value of the property is well below $37.1 million IMO. A property like the coliseum is difficult to appraise, because different appraisal types will likely come up with very different numbers. Ultimately, it's only worth what Wake Forest, it's only potential buyer, is willing to pay for it.
 
DinDC said:
Right, but the appraiser is only concerned with the cost of rebuilding the same structure plus the land value.
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Not true. The assessor's office is required to estimate market value -- what a buyer would pay for the property. Even in mass appraisal an appraiser is expected to account for economic or functional obsolesence as a buyer would take these things into account. In a special purpose building that gets special attention from the assessor's office, it should absolutely be taken into account.

Maybe it's worth $37.1 million and the county missed it. I really don't know.
 
HeavyPetter said:
Not true. The assessor's office is required to estimate market value -- what a buyer would pay for the property. Even in mass appraisal an appraiser is expected to account for economic or functional obsolesence as a buyer would take these things into account. In a special purpose building that gets special attention from the assessor's office, it should absolutely be taken into account.

Maybe it's worth $37.1 million and the county missed it. I really don't know.
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I was talking about the private appraiser who appraised the Joel for the city, not the tax assesor, and I meant the same structure without all the additional bells and whistles that places like UVA's arena have.

You're correct that the tax assessor's office estimates market value based in part on comparable sales. Appraisers and tax assessors do a lot of the same things, but they often (usually) will come up with different answers.

Does NC require properties to be assessed by the tax assessor's office at 100% of market value? I don't know the answer to that.
 
I would have to guess that the city's appraiser was asked to estimate the market value in today's market. His cost approach would have to take into account the economic and functional obsolesence of the structure. His measurement of these would be difficult, but nobody would build a structure just like the Joel today. It would be like building a warehouse with 14' ceilings.

Yes. You have to estimate market value in the first place to get to any sort of assessment ratio. SC does this.

Tax assesors use the same methods as fee appraisers. They often just don't have the correct assumptions about rental rates, cap rates, and vacancy levels or know about interior upfit, which accounts for their differing values on commercial properties especially.
 
RacerDeac said:
Disagree. $37.1 would be a rip off. The property has one potential buyer as a coliseum. Otherwise, it's value is only in the land it sits on. The market value of the property is well below $37.1 million IMO. A property like the coliseum is difficult to appraise, because different appraisal types will likely come up with very different numbers. Ultimately, it's only worth what Wake Forest, it's only potential buyer, is willing to pay for it.
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True.
 
Are we sure that Winston-Salem owns the arena? After the past two seasons I would say that pretty much every other team in the ACC could try to lay claim to owning it (*not so fast BC*)
 
DinDC said:
Didn't UVA's new arena cost somewhere in the neighborhood of $150 million? It holds maybe 1,000 more than the Joel. $37.1 million is a bargain. (And that includes the value of the land.)
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Yeah... except UVA's Arena is really really nice.
 
There was a figure of about $8 or $9 million for the Joel floating around for awhile in the press. Does anyone know where that came from?
 
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