Letter: Too much faith in Basalt projections
November 30, 2015
The Basalt Town Council gave Cottle Carr Yaw Architects and the Lowe development group more master-plan development-level rights after an extremely low real estate valuation projection was inserted into the "park affordability" formula by the town manager and the financial consultant. The formula works like this: The lower the future projected value of the real estate used in the formula, the more development rights that need to be granted on the Community Development Corp. parcel to return a profit to the developer and money the town has invested previously.
Neither the manager nor the finance consultant is more qualified for this task than the typical person would be, and yet the council is basing its decisions on their "guess" valuations. The overworked Town Council has so far been unquestioning and accepting of the consultant's low valuations and the false conclusions that say that even 75,000 square feet of development on the river in Basalt is going to result in a $2.21 million shortfall. To understand the effect on the council's opinions regarding whether Basalt can afford an open river park or not, I offer you the following: A low projected valuation of $100 per square foot by the town manager multiplied by 75,000 square feet of buildings over what they will be worth equals $7.5 million of pure developer profit less broker commissions. A low-valuation error of $300 per square foot by the finance expert and town manager multiplies and adds to the developer-projected profit windfall by a whopping $22.5 million.
Realistically, only 30,000 square feet should conservatively provide a cash-on-cash return on assets to a talented developer team of somewhere between 29.6 and 74 percent. It would meet all the obligations and leave about 75 percent of the Community Development Corp. parcel open from road to river rather than the 35 percent that the master plan is as of Nov. 24.
The deflated developer profit projections made by the financial consultant, with no public discussion or comment allowed at presentation or since, provided the ammunition that the development team needed last week to enlarge the contemplated area of development. Cottle Carr Yaw architect Chris Touchette, within the past nine months, has served in three influential capacities for this critical town parcel: head of the Planning and Zoning Commission, architect for Lowe Enterprises when it was proposing 150,000 square feet and, most recently, consultant architect for the town. On Nov. 24, after letting all know that his actions have been "at the highest standard and transparent" but not identifying which representation hat he was wearing that night, directed blame at the council and amplified the fear level by saying that the proof is in the numbers and, based upon the truth of financial-consultant findings, that Basalt cannot afford the park and it would be irresponsible to support any plan that limits development to anything less than 75,000 of development as it would threaten day care, school programs, affordable housing, underpass funding and more. Reader, is this your Basalt, too?
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