Appraisal lacking in Rouse deal

January 26, 1995|By Adam Sachs | Adam Sachs,Sun Staff Writer

The Columbia Association has agreed to terms of a $1 million land deal with the Rouse Co. for a recreational vehicle storage park without an independent appraisal that might take into account adjacent hazardous waste dumps.

The deal will be contingent on an environmental study, said CA spokeswoman Pamela Mack, who added that "we go in with anticipation that there's not an [environmental] problem."

The Columbia Council, the CA's board of directors, hasn't decided whether to get an independent appraisal of the proposed $1 million purchase of 4.75 acres in the former General Electric industrial park off Snowden River Parkway in east Columbia.

The council must approve the deal.

The lack of an appraisal or an environmental analysis has given ammunition to critics of the deal, which was negotiated privately with Rouse, Columbia's developer, in recent months and made public with the proposed CA budget last month.

Critics say the CA is paying too much for the land, they question the need for the project, and they say it illustrates a cozy relationship between Rouse and the private, nonprofit homeowners association that provides the community's services and facilities.

"It makes no sense without an appraisal. That's blatant bad management," Long Reach village resident Judith Todes told the council recently. "Big decisions shouldn't be made in reaction to the Rouse Co. but to the real needs of the community."

Some council members and residents say the deal is a good one financially for the CA and will provide a valuable service to residents.

"I just don't see any real downside to it," said Councilman Michael Rethman, calling the appraisal issue a "red herring."

The proposed storage park, which would cost $400,000 to develop in addition to the land cost, is intended to help residents comply with Columbia rules prohibiting campers and boats on residential lots.

In exchange for the land purchase, Rouse has agreed to subject to the CA's annual property levy two properties now excluded from that fee. Those commercial and residential properties eventually would generate an additional $350,000 annually for the CA.

The Rouse deal has a number of concerns, chief among them environmental ones about the former industrial park land.

The property in question is about 100 yards from two fenced-off dumps containing industrial waste that includes metal hydroxides, which can contaminate water.

The former manufacturing property also contains a third landfill and other areas where cleanup and monitoring of soil and water contamination are taking place.

The industrial sludge from General Electric's appliance manufacturing operation was buried with state permission between 1975 and 1982. The three landfills were capped in 1988 to protect ground water.

General Electric still owns the parcels containing the dumps and is responsible for monitoring and cleanup. Ground-water tests are being conducted on a quarterly basis, under federal Environmental Protection Agency supervision.

The latest well tests, conducted last fall by a General Electric consultant, didn't detect any "metals of concern."

Commercial real estate experts say buyers should thoroughly investigate risks when purchasing land near environmental cleanup sites, but they say that contamination, if contained, doesn't necessarily affect neighboring property values.

"The existence of an environmental problem on adjoining property shouldn't affect the value of a clear piece of property so long as you have no reason to believe that the problem will spread," said Robert Z. Smith, vice president of KLNB, a commercial Realtor in Columbia.

State and federal environmental officials say that General Electric is cooperating in the cleanup and that the risk of contamination spreading sites appears low.

On the issue of a prior appraisal, activists say it is important because they question whether CA is paying too much.

The 4.75 acres is part of a 168-acre parcel, according to state tax records. The state-appraised value of the entire 168-acre property is $4.7 million, about $28,000 per acre.

The CA has agreed to pay far more than that for the proposed storage park land -- $210,526 per acre -- and needs only about half of that land to meet projected demand.

CA's own market survey showed that five sites currently available along U.S. 1 would cost between $70,000 and $114,000 an acre. And the study says the CA could buy the 2.5 acres it needs for less than $300,000.

Association officials argue that an appraisal might not be necessary, saying the deal remains a good one financially for the CA.

The reason is that Rouse, in exchange, would place the 55-acre Snowden Square retail center and a nearby 54-acre undeveloped parcel planned for about 650 housing units under the CA levy, generating revenue that would far exceed the costs of providing services there.

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