|The VA homes in Tower Park have plummeted in value over the last seven years.|
However, it appears the nearly decade-long road to approval has yielded a stark decrease in the properties' value and allowed the homes' continued deterioration, which may have mixed consequences for the city.
City Administrator Don Martin explained to FTM that the properties have decreased in their appraised value by approximately seventy percent since 2007. Here is how the properties were valued at each appraisal, which were completed under a VA contract, over the last seven years:
But that last figure, $800,000, is not the end of the line, Martin explained, because a statement in the 2011 appraisal documents indicated that the appraiser believed the homes sitting on the properties, which will require major restoration work, detracted from their value to the tune of another $290,000.
The VA examined the documents and agreed that the appraisal should be revised to reflect the detraction making the:
VA Approved Appraisal Amount: $510,000
It is this appraisal amount the VA is using to establish the purchase price of the properties for the city.
"The appraisers did not indicate why the value decreased," Martin said. "I can only speculate that the decreases are due to the economic downturn, the condition of the homes, and the appraiser fully understanding that the homes must remain." Ultimately, this made the purchase of the properties by the city more fiscally feasible.
But selling them to a developer might not prove as favorable for the city.
Because the homes are on the National Register of Historic Places, part of the city's agreement with whichever developer wins the bid for the properties will be that the homes remain historically accurate. This means a mountain of restoration work, including the abatement of asbestos and lead paint from the homes, work that could cost the developer an additional $1 million, according to Martin.
This does not include the cost of installing new utilities, restoration of the street, and other home restoration costs, Martin added.
Bill Kreutzjans, of Ashley Builders, was one of three developers to submit a letter of interest in purchasing the properties back in 2011. After last month's announcement, he said his company would still be interested, but it would have to depend on the details that the city would lay out.
"With any historical development, there are going to be hurdles," Kreutzjans told FTM shortly after last month's announcement. "Back (in 2011) the abatement required and those historical guidelines, as well as the price, made it very difficult to work out. We'd like to pursue if the city were in a position to incentivize the deal. It would depend on that final package."
Mick Kennedy, President of Kennedy Homes, was also one of the developers to submit a letter of interest three years ago, and has a more skeptical outlook. "Unless you have someone like Bill Gates that's going to come in and see this project through, there's just no way."
Even still, Fort Thomas Renaissance Manager and Economic Development Director Debbie Buckley remains optimistic and committed to maintaining the homes' historical integrity, especially now that the city is in a position to ask a lower price for the properties.
"I can tell you that we have had good interest from several developers," Buckley said in an email shortly after the deal with the VA was finalized. "We are most interested in keeping the integrity of the homes. When people walk by, we want them to see what visitors saw 100 years ago."
What's more, no matter which way you look at the project, progress is being made, as Martin explained in a statement shortly after the deal was finalized. "We fully expect the process to move at a much faster pace from this point forward. After muddling through nearly a decade of federal red tape, the light at the end of the tunnel suddenly looks much brighter for these important, historic homes."
Establishing a timeline for receiving and selecting a bid is the next step for the city, which officials remain optimistic should take place over the next several weeks.