Above: Concerns over parking access for the playground and ball field at Fay Park, in addition to preservation of the historic facade, are challenges for the Town as it seeks to sell Fayville Hall (photo by Beth Melo)
The Town will do more to promote Fayville Hall as it seeks to find a buyer through another Request for Proposals. On Tuesday, the Board of Selectmen discussed their options and constraints as they seek to sell the historic building and property with conditions.
The initial RFP resulted in one bid for $5,000. The offer came with promises to preserve the historic facade. But the project was also conditioned on allowing transfer of two affordable housing units from one of the developer’s other projects in town.
In the end, the board never had to decide if the preservation was worth the lost cost of a market value sale. With feedback from the Planning Board, selectmen learned it wouldn’t be possible to work through the conditions within the RFP’s 120 day window for closing on the Purchase & Sale.
This week, Town Administrator Mark Purple indicated that while the building is empty, there are still costs incurred. He said that it is heated rather than winterized and Facilities is maintaining it to keep up with insurance requirements.
Purple explained that he put the item on the agenda at Chair Lisa Braccio’s request. Before releasing a new RFP she wanted to discuss how to effectively market the property.
The TA and Chair noted public concerns that the sole low bid was due to lack of promotion for the first RFP. Selectman Brian Shifrin said he disagreed with the complaints. Given the restrictions on parking and preserving the exterior, he said the bid received was appropriate and generous.
Purple countered that critics had a point. After news came out about the bid, he was contacted by 3-4 more interested parties. They asked if the process was closed and to be notified if it reopened.
Ideas the board agreed on for the next release included:
- Working with the Economic Development Committee to get word out
- Inviting local realtors to an Open House hosted by the Town
- Reaching out to the former bidder and other companies like his
- Notifying attendees of a breakfast EDC held last year in which they talked about the property prior to the RFP opening
In later public comment, resident Louise Barron asked why the property wasn’t listed on MLS. Braccio responded that better marketing the property was why they had the talk. She told Barron, that they’re “on the same page”.
In past meetings and blog comments, many have focused on the property’s preservation challenge. This week more discussion was on one of the Town’s other priorities noted on the RFP – parking.
Purple told the board that if it wasn’t for the priorities of publicly available parking and the preservation, he would have hired an auctioneer to market and sell the property. He also said that a residential project may be less ideal than commercial. A business’ hours could allow more parking at appropriate times for the ball park and newly equipped playground across the street.
On questioning, Purple couldn’t specify the parking capacity of the lot. Recreation Commission’s Kristen Lavault said that people now park “overlapping” in the unlined lot and on the grass. Selectwoman Bonnie Phaneuf asked for the new RFP to specify the amount of parking that the Town is seeking to keep. Lavault (who served on the dissolved disposition committee) said she would dig up Recreation’s requested number of spots from the final report.
[Editor’s Note: That report noted community need for 24-48 parking spots at peak times. Scroll down for the full language.]*
In preparation for this week’s talk, Braccio asked Purple to research restrictions on hiring a professional to market the property. He said he contacted the Inspector General’s office. He indicated that the likely cost of more than 5% of the property value would trigger needing an RFP. He pointed out that it would likely cost more to hire the consultant than the last offer they received. Braccio said that ruled it out as an option for her.
Phaneuf asked if there was a way to limit conditions this time to avoid a “laundry list” and links to other properties’ conditions that may tie up the process. Purple said allowing conditions gives bidders chance to be creative. He followed that limited days for completing the P&S essentially takes care of her concern.
For more background on the historic property and the Town’s efforts to sell click here.
* The Final Report of the Fayville Hall Disposition Committee included:
The Recreation Committee believes that loss of this parking area will severely impact access to the park and further congest the roadside parking, which many already feel is unsafe given the proximity to moving traffic and young children getting into and out of cars.
Given these concerns, the Committee advises that the RFP include language that provides preference to potential buyers who either:
- Agree to leave a portion of the land in lot 40 out of the sale for Southborough to retain for public parking, or
- Allow public parking in a lot on the property; note that the park is only open from dawn to dusk, so nighttime parking is not required and anticipated to be lighter during the
weekdaysIn regards to the number of spaces required, the Southborough Recreation Commission projected anticipated needs based on days and times of maximum usage. On a weekend day during the spring season, Southborough Youth Baseball uses the park’s fields for t-ball. Southborough Recreation also may use the park for youth programs, and the playground has its highest usage. Conservative parking estimates were calculated as 24 – 28 cars during peak times for the teams, spectators and playground users.
Look carefully at the appraisal. It is important to note the difference between “Market Value” and any price that would be achieved via an auction, which is “Liquidation Value” (a value that could result in a discount of up to 50% or more). Those are two completely different things. To max dollars back to the town, the focus and goal should likely be “Market Value.” The BOS’s legal fiduciary duty, presumably, is to max the price achieved back to the taxpayers.
The key problem here is that the property was never properly and professionally marketed to begin with. Narrow channels, including an ad for a day or two is not “exposure” to the open market, such as MLS. Only professional, competent marketing of a property exposed on the open market for a comparable period of time to surrounding sales might achieve “Market Value” (i.e. carefully examine the prices achieved and the accompanying marketing time of properties on the surrounding streets — might be 60 or 120 days — this info is readily available via MLS) .
The property was appraised for $1,000,000 reportedly? It came close to being let go, sold for $5,000? What is wrong with this picture? Everything.
The appraisal reported a value of the property AT MARKET VALUE for $1m. Look at the definition of market value in the appraisal (and ask for it from the appraiser; also ask for “liquidation value” definition as well) and examine both definitions carefully. The key term is “exposure” (see #3)
Market value is commonly defined as:
“The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
1. buyer and seller are typically motivated;
2. both parties are well informed or well advised, and acting in what they consider their own best interests;
3. a reasonable time is allowed for exposure in the open market;
4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
How would you sell your own house? Would you put the sale in some obscure listing service that the public at large would likely never view? Would you put an ad in the paper for 1-2 days? (Reportedly, that’s what happened here. )
The conditions of sale (façade, parking, etc.) were non-binding. The property could have been sold for $5,000 and resold the next day. Potential scary mismanagement of a sale process that was halted by the BOS.
Just a suggestion, but the property should probably not be subdivided. It lengthens and complicates the sale process and possibly achievable price.
Also, important to note that, if subdivided, the “value” may well likely change since the amount of land to sell would be altered since the time of appraisal (shrunk). The Fayville Hall land (for potential excess playground parking) is other side of the street from the playground itself. Just a thought: but it would be easier on the playground side of the street to simply move the guardrail in a foot or two and re-stripe at a diagonal, like a grocery strip center does to fit in parking. That way parents and children don’t have to cross the busy street and both properties are kept intact in a way that would make sense for marketing purposes.
As for fees, the fee to sell the property might be made contingent on the sale price (some percentage of the sale price) payable at closing. Isn’t this how most sales work? Interview 3 to 4 companies that dispose small properties like this. Importantly, the comparison is not between this past botched misfire of an offer and a quote of one fee. Make the fee contingent and payable at sale. Ask an outside professional (not the T.A. who may have little to no experience in unloading excess real estate) survey a few companies. Go back to the appraiser and ask about all of the above and speak with reputable, qualified, professional sales brokers, showing the latter the sales from the appraisal and asking their objective opinion.
All just suggestions — but hopefully this is what you or anyone would do when selling and curious about possible achievable price. The more subdividing and conditions (binding) the likely less will be achieved (and perhaps complicating the disposal). Good luck and keep the taxpayers in mind! This asset belongs to them.
Thank you.