The city's pending appraisal review of city park land that is the centerpiece in the city's proposed trade for property owned by The Broadmoor isn't intended to perform new appraisals, but rather determine whether previous appraisals are credible.
But the review will be based on "restricted appraisal reports," according to records obtained by the Independent via an open records request.
That's professional appraiser parlance meaning "minimal details and content," leading the firm hired for the review, Muegge & Associates, Inc., to give this warning in its April 7 proposal:
"Please note that a restricted appraisal report provides very limited information to review regarding report quality. Review of the City's restricted appraisal reports will address USPAP [Uniform Standards of Professional Appraisal Practice] compliance and to the extent possible an opinion of the quality and credibility of each restricted appraisal report." (Emphasis added.)
How much the parcels are worth, especially the city's 189-acre Strawberry Fields open space, has been hotly debated since the city unveiled the appraised values on March 30 during a public meeting at Gold Camp Elementary School. (The city has refused to release the appraisals themselves.)
Now, records show the city launched the appraisal process in September 2015 for the "North Cheyenne Cañon Park Disposal Project," i.e., Strawberry Fields, while several Broadmoor parcels weren't appraised until March 30 — the date of the public meeting.
At issue is a trade of city property, including Strawberry Fields, valued at $1,581,000, and a half-acre parking lot at the base of the Manitou Incline owned by Colorado Springs Utilities, valued at $580,000, for a total of about $2.2 million.
Those appraisals were conducted by Kyle Wigington. He was hired for the Strawberry Fields appraisal in an agreement signed by Parks Department official Chris Lieber last Sept. 4.
Wigington's proposal letter states the city asked him to prepare a "narrative report format" report, the purpose of which was to provide an opinion of the "as is" market value. Wigington also notes that "it should be noted that the report may not be fully understood without access to the appraiser's workfile or those of other experts retained for purposes of the valuation." A narrative report can be either a restricted report or an appraisal report.
Attached to Wigington's agreement is a list of "assumptions and limiting conditions" which states that "Unless otherwise noted, all prospective value estimates, if any, in this appraisal are based on the market conditions which exist at the date of inspection combined with an informed forecast, based on current trends in supply and demand for the property type under appraisal ..."
Wigington appraised Strawberry Fields on Oct. 14, according to his invoice for the $7,500 fee.
No such letter or agreement was provided to the Indy for Wigington's appraisal of the parking lot, for which he invoiced the city on March 15 for a fee of $4,000.
The Broadmoor's parcels, appraised by Thomas Colon, who was hired by the resort, have a combined value of $3.6 million. Those include 208 rugged acres around Mount Muscoco west of Strawberry Fields, portions of the Manitou Incline and Barr Trail, easements for the Chamberlain Trail and nine acres of residential-zoned property south of Bear Creek Regional Park, which alone was deemed to be worth $1.4 million.
After the values were announced at the March 30 meeting, some citizens disputed them. Kent Obee, longtime open space advocate and past Parks Advisory Board chair, noted the El Paso County Assessor's Office shows Strawberry Fields' value at $2.3 million, and that based on neighboring home-site costs, the value could surge to $10 million.
Real estate broker/Realtor Mike Dorsey called the city's open space appraisal "complete nonsense," and said if viewed for its development potential, the property might command as much as $50 million.
On April 7, at 8:06 a.m., city real estate services official Ronn Carlentine emailed Richard Muegge, President of Muegge & Associates, seeking an appraisal review and saying a report was needed for the May 10 City Council meeting where a vote on the trade is planned.
At 5:18 p.m. that same day, Muegge submitted a proposal, noting, "Completion in time for May 10 City Council meeting will be tight."
Muegge's proposal was based on the city's requirement that the review would consider The Broadmoor's "narrative appraisal reports" and the city's "restricted appraisal reports."
A restricted appraisal, according to Denver-based Colorado Appraisal Consultants, is the least common among appraisal types and, according to its website, "contains minimal detail/content and can legally only be relied upon by the client, not any other party. This type of report is not appropriate for most appraisal situations due to the fact that it contains minimal details and content. Further, this report type may not be understood without additional information contained in the workfile that is not transmitted in the report."
The firm adds that restricted reports are sought when clients are "already familiar with the property to some extent, and they do not desire to see details regarding the subject or the valuation."
On April 13, the city gave Muegge a notice to proceed, with a due date of May 9.
Attached was a list of parcels to be included in the appraisal review, with dates of valuation. The Broadmoor's Incline easements and Mount Muscoco tract were valued on Jan. 12, while other tracts were valued on March 30. The Bear Creek tract was valued on May 20, 2015.
The valuation date for Strawberry Fields was given as Feb. 26 — four months after Wigington billed the city on Oct. 20 for his Oct. 14 appraisal; date of valuation for the parking lot was listed as March 16 — the day after Wigington billed the city for that appraisal.
Carlentine didn't return an email from the Indy posing several questions regarding the city's use of restricted appraisals and the valuation dates.
But the city communications office says via email that "the Parks Dept. ordered the Restricted Use Appraisal because it meets USPAP requirements and is appropriate for this proposed project."
The exchange will be presented April 20 to the Utilities Board, comprising Council members. Council is to be briefed on the swap again on April 26, and is slated to take action May 10.
It's worth noting the proposed land swap resolution states that the city would declare as a donation the $1.45 million difference in appraised value between the city and Broadmoor parcels, which provides The Broadmoor with a tax benefit.