LSARA sent a letter to Council in December with concerns on the PROCESS of the sale of the Old Administration Building. We are definitely not opposed to a sale but our concerns are:
- Were council advised by the CAO properly of the processes necessary to sell this building?
- It is the responsibility of the LSAC CAO to inform the council of the background history of this building. There was a motion (812-16 November 10, 2016 “Direction for old office”) on the table put forward from a previous council to obtain costs to demolish.
- LSAC CAO should have advised current council that before any other discussions, this motion needs to be dealt with, even if just a motion to rescind.
- There is no evidence that there was discussion in any LSAC Council Meeting minutes regarding this motion. Administration did not follow the direction of previous Council's motion in obtaining costs to demolish and certainly the “request for proposal process” would have been part and parcel of that motion.
- Also of note was the fact that “A GROUP” came forward with the recommendation of selling the building. Was this group one and the same as the one that a Council member is a Director of?
Their overall decisions must always be to have the RATEPAYERS best interests in mind. Did they? We are not necessarily opposed to selling the building, but a Process should ALWAYS be followed to ensure our Assets are being managed in a proper manner.
This is the Post that Lac Ste. Anne County posted on Facebook. They also provided the report to the Mayerthorpe Freelancer and the Lac Ste. Anne Bulletin on Thursday Feb 22, 2018.
We took the liberty to respond to this "Report on the Disposal of our County Asset" and our comments are highlighted in yellow below.
Disposal Process for Vacant Old County Administration Building
23 Feb 2018 Posted on LSAC Facebook
The following article has been prepared by Lac Ste. Anne County to chronicle the administrative procedures and Council decisions behind the disposal process for the derelict County Administration Building located at 4927 Langston Street in Sangudo.
In November of 2016, with the new County Administration building nearing completion, County Council made motion directing Administration to proceed with a demolition plan and inclusion of the cost to demolish the vacant old County Administration building located in Sangudo, Alberta. An amount of $163,000 was authorized to be included in the 2017 ( By way of motion? When? The Ratepayers wonder, where is this money today? ) operating budget, though the amount was thought to only be a portion of the remediation, ( What was the “thought based on? ) demolition and reclamation costs required; full cost estimates were not able to be obtained without a Request for Proposal (RFP) process.
( When was this authorization completed as we are unable to source it in the meeting minutes from November 2016, to current. An RFP has a cost to the contractor submitting the bid, not so much to the County. Additionally, what was the process to dispense of the motion that was made in November of 2016? )
At that time, it was accepted that the building deficiencies, which included the presence of asbestos, water infiltration, mold concerns, roof conditions and other major structural flaws and deficiencies, were so significant that selling this building would not be possible due to lack of interest.
(How would they know, it was never identified as an option? If there was a potential buyer today why not a year ago? The old administration building has not been assessed for any structural, roof, asbestos or mold deficiencies since it had major upgrades and repairs to our knowledge since 2007 . Additionally, asbestos is not a concern or an issue unless it is disturbed. If it is such a health concern, we had best be moving all of our children out of Northern gateway schools and other buildings owned by the county.) With annual building maintenance costs estimated to be in excess of $18,000.00, action was necessary to reduce the financial strain this building was having on the taxpayers of the County. (Agree, something should have been done in the past year to lessen this cost to the ratepayers. Direction had already been given to obtain costs to demolish How were these maintenance costs arrived at? )
While Administration continued to develop the demolition plan requested by County Council, (Review paragraph above. Indicates that full cost estimates were not able to be obtained so what plan did they continue to develop ) a number of businesses from the Sangudo community came forward with concerns about the plan to demolish the vacant old County Administration building. The group ( What group? What skin does this “Group” have in the game? ) felt demolishing the building would be a detriment to the community and were confident that, if the County would explore selling the building, an alternative could be found. ( County received an Offer to Purchase in Mid December and it was then that they decided that selling the asset may be viable. 4 short days after receiving said offer a listing agreement was signed. There is NO EVIDENCE of any previous discussions in council minutes or special meeting minutes that would indicate a rescinding motion and a New Motion or Resolution at that time to sell. An offer to purchase is what we believe propagated this process. How is it that the loss of one reportedly uninhabitable building has the ability to be detrimental to the Hamlet? )
As Administration is charged with providing County Council with information on all alternatives to build the foundation of good decision making, the task of gathering the necessary information took place. It was determined that the opportunity to sell the building should be investigated. ( Where is this direction in the minutes to Administration? ) Selling the vacant old County Administration building would be favorable over investing hundreds of thousands of dollars for its demolition. (Let’s be very clear here. We do not disagree that this might be the best and most viable option. It is not the sale we are opposing but rather the lack of processes are the concerns. If the discussion to sell came up, the first question should be “What Policy is in place to deal with this?” According to current Administration and Council, no Policy exists. Perhaps enacting one should be first order of business as was pointed out by LSARA prior to the offer being accepted)
The Municipal Government Act (MGA), s. 201, gives County Council the ability to build policy and programs (They must also follow or amend current ones) for the municipality. In this, Lac Ste. Anne County does not have a policy for the disposition of assets such as this building (LSARA has confirmed that there is a Policy for disposal of County assets in the Policy Handbook that Council and Administration is in the process of updating. LSARA has requested this policy handbook
(A Public Document) in a number of written communications and have not been successful in our requests. A FOIP access request was submitted this morning.) and, as these situations are of such a rare occurrence, ( Not so RARE as we have many other real property assets that this and next Councils will have to deal with in the near future. Community Halls, Old Public Works Buildings, other county facilities that amalgamated into the New Council Admin Building ) County Council has the authority to make these types of decisions by resolution, on an individual basis as required. ( This action is within Council and Administration authority however, they also must be instructed by CAO that there is already a Motion that needs to be dealt with prior to going forward with a new “resolution”. There is no evidence of this Resolution in the minutes. When was this resolution made and voted on? )
Ensuring that any offers received on the building would be subject to County Council approval, and preserving Council’s authority to determine the ultimate fate of the building, it was listed for sale on December 19, 2017, at the estimated market value of $99,900. ( LSAC Assessment department relies on a "Mass Appraisal Approach" for the majority of their assessments in the county including "Commercial and Institutional Properties" as has been documented in the past. The assessment departments "Accredited Assessors "estimated market value of $99,900" would not be applicable in this circumstance as the "FAIR MARKET VALUE". ) Other conditions were established with the real estate agent that are standard to our tax recovery property listing ( What conditions are those? Selling real property assets should not be treated same as the tax recovery guidelines ( Process part 10 of the MGA provides for 3 tax recovery processes 1. Recovery of taxes related to land, 2. Recovery of taxes related to designated manufactured homes (division 8.1) and 3. Recovery of taxes not related to land). This Listing should NOT be Standard to the Tax Recovery Process when it is a sale of a LSAC Asset! ) procedures, such as no offers will be accepted until the property is advertised for sale in a listing for 14 days, and property is for sale “as is, where is.” ( Was the offer that was put forward in Mid December withdrawn? The proper advisements with respect to “alleged public health issues” were not included in disclosure of the listing)
As to the advertisement of the sale, the MGA, s. 70(1) (a), requires that if a municipality proposes to sell property for less than market value it must advertised.
In the MGA, “market value” means the amount that a property might be expected to realize if it is sold on the open market by a willing seller to a willing buyer.
Assessors receive training in a variety of areas, including property valuation techniques, legislation, and quality assurance, all in accordance with the provincial legislation and regulations which govern assessments. County Council is confident in the estimated value supported by the County’s Assessment Department. The County’s Assessment Department assesses more than 10,000 properties annually, with less than 0.01% of those assessments being appealed to an Assessment Review Board. ( That statistic is irrelevant. Again, LSAC Assessment department relies on a "Mass Appraisal Approach" with the majority of their assessments in the county including "Commercial and Institutional Properties" as has been previously documented. The assessment department Accredited Assessors "Estimated Market Value" or "Approximate Market Value" of $99,900 would not be applicable in this circumstance as a determination of the "FAIR MARKET VALUE". LSARA’s recommendation was an Independent Appraisal. )
Ensuring that any offers received on the building would be subject to County Council approval, and preserving Council’s authority to determine the ultimate fate of the building, it was listed for sale on December 19, 2017, at the estimated market value of $99,900. ( LSAC Assessment department relies on a "Mass Appraisal Approach" for the majority of their assessments in the county including "Commercial and Institutional Properties" as has been documented in the past. The assessment departments "Accredited Assessors "estimated market value of $99,900" would not be applicable in this circumstance as the "FAIR MARKET VALUE". ) Other conditions were established with the real estate agent that are standard to our tax recovery property listing ( What conditions are those? Selling real property assets should not be treated same as the tax recovery guidelines ( Process part 10 of the MGA provides for 3 tax recovery processes 1. Recovery of taxes related to land, 2. Recovery of taxes related to designated manufactured homes (division 8.1) and 3. Recovery of taxes not related to land). This Listing should NOT be Standard to the Tax Recovery Process when it is a sale of a LSAC Asset! ) procedures, such as no offers will be accepted until the property is advertised for sale in a listing for 14 days, and property is for sale “as is, where is.” ( Was the offer that was put forward in Mid December withdrawn? The proper advisements with respect to “alleged public health issues” were not included in disclosure of the listing)
As to the advertisement of the sale, the MGA, s. 70(1) (a), requires that if a municipality proposes to sell property for less than market value it must advertised.
(This is Absolutely Correct!!)
With regards to the vacant old County Administration building, this property was being sold at market value, not below, and therefore advertisement would not be necessary as per this section of the MGA. (The evidence Shows that this statement is incorrect as "Fair Market Value" was never determined. LSAC Assessment Department only provided an opinion of "Approximate Market Value" and an "Estimated Market Value" as admitted in this Disposal Process Report. What process was utilized to determine market value? Was a market comparison even completed? We wonder if we will have to FOIP it??)
In the MGA, “market value” means the amount that a property might be expected to realize if it is sold on the open market by a willing seller to a willing buyer.
( According to the MGA the ACTUAL Definition of "Market Value" means:
MARKET VALUE : The price a property might reasonably be expected to sell for if sold by a willing seller to a willing buyer after appropriate time and exposure on an open market.
"Fair Market Value" is NOT an "Approximate Market Value" nor an "Estimated Market Value" which LSAC admits to have used to determine the Listing Price for the Property. )
To establish the listing price at approximate market value, the County’s Assessment Department, which prepares assessments for all types of property in the County by professional, accredited Assessors, was brought in for the valuation process.
( LSARA suggested as part of the process that an INDEPENDENT APPRAISAL be obtained. This would accurately determine the value of the ASSET. Our County Departments can not obtain a “fair market value” in 4 days and remain unbiased. Did the department determine the value in 4 days or under? Yes, an Appraisal would have cost money, perhaps as much as $2500.00 however would we would have recovered this in the sale. In our opinion, is this not a part of due diligence in obtaining an independent value to determine "Fair Market Value". What do all other Municipalities do when selling real property assets? LSARA asked several and they all indicated they have Procedures and Policies in place along with a Tender Processes once a value through Appraisal is obtained. Does this not sound like a Reasonable process? )
Assessors receive training in a variety of areas, including property valuation techniques, legislation, and quality assurance, all in accordance with the provincial legislation and regulations which govern assessments. County Council is confident in the estimated value supported by the County’s Assessment Department. The County’s Assessment Department assesses more than 10,000 properties annually, with less than 0.01% of those assessments being appealed to an Assessment Review Board. ( That statistic is irrelevant. Again, LSAC Assessment department relies on a "Mass Appraisal Approach" with the majority of their assessments in the county including "Commercial and Institutional Properties" as has been previously documented. The assessment department Accredited Assessors "Estimated Market Value" or "Approximate Market Value" of $99,900 would not be applicable in this circumstance as a determination of the "FAIR MARKET VALUE". LSARA’s recommendation was an Independent Appraisal. )
The MGA sets out two (2) types of valuation standards—the market value standard and the regulated standard. The market value standard is considered the most fair and equitable means of assessing property. It is fair because similar properties are assessed in the same manner; it is equitable because owners of similar properties in a municipality will pay a similar amount of property tax. Unfortunately, if the building is unique in the area, finding sufficient market data for this type of valuation may not be possible.
( Therefore it is reasonable that an independent Commercial Appraisal would be the only way to determine a Fair Market Value to determine what the listing price should be if offered on the Multiple Listing Service. )
In situations of insufficient comparable sales,legislation recommends the cost approach. ( In situations of insufficient sales in the area, to determine a Fair Market Value for such a property one must go outside of the area to find such "Comparables" including" Sold Comparables" to determine "the price the property might reasonably be expected to sell for if sold by a willing seller to a willing buyer after appropriate time and exposure on an open market" as described in the MGA. Why was only a portion of the definition supplied in this article by LSAC? That is why an Independent Certified Appraiser is required to determine such value as they DO HAVE the resources to accomplish such a comparison where as our LSAC Assessment Department does NOT.) In this approach, the Assessor discounts the market value of the land and the replacement cost of the building by all forms of depreciation and obsolescence. The amount of depreciation is determined by using the effective age of the building and applying the factors from the Costing Manual. The obsolescence factors of the building are functional obsolescence and physical obsolescence. Functional obsolescence occurs when a property loses value due to its architectural design, building style, size, outdated amenities, local economic conditions, and changing technology. Physical obsolescence in the building is calculated by the amount of repairs required due to a building being worn out. In the case of the vacant old Administration building, depreciation and obsolescence factors, previously published as the presence of asbestos, water infiltration, mold concerns, roof conditions and several major structural flaws ( What are these major structural flaws? Does a document exist that was prepared by a structural engineer? ) and deficiencies, meant significant repairs by any purchaser and greatly reduced the market value of the building. ( Where is the estimated cost of remediation on this? Would this not be necessary in the process of determining depreciation and obsolescence )
In situations of insufficient comparable sales,legislation recommends the cost approach. ( In situations of insufficient sales in the area, to determine a Fair Market Value for such a property one must go outside of the area to find such "Comparables" including" Sold Comparables" to determine "the price the property might reasonably be expected to sell for if sold by a willing seller to a willing buyer after appropriate time and exposure on an open market" as described in the MGA. Why was only a portion of the definition supplied in this article by LSAC? That is why an Independent Certified Appraiser is required to determine such value as they DO HAVE the resources to accomplish such a comparison where as our LSAC Assessment Department does NOT.) In this approach, the Assessor discounts the market value of the land and the replacement cost of the building by all forms of depreciation and obsolescence. The amount of depreciation is determined by using the effective age of the building and applying the factors from the Costing Manual. The obsolescence factors of the building are functional obsolescence and physical obsolescence. Functional obsolescence occurs when a property loses value due to its architectural design, building style, size, outdated amenities, local economic conditions, and changing technology. Physical obsolescence in the building is calculated by the amount of repairs required due to a building being worn out. In the case of the vacant old Administration building, depreciation and obsolescence factors, previously published as the presence of asbestos, water infiltration, mold concerns, roof conditions and several major structural flaws ( What are these major structural flaws? Does a document exist that was prepared by a structural engineer? ) and deficiencies, meant significant repairs by any purchaser and greatly reduced the market value of the building. ( Where is the estimated cost of remediation on this? Would this not be necessary in the process of determining depreciation and obsolescence )
In total, the property was listed for 57 days ( Said listing was propagated by receiving an offer to purchase prior to the listing and by the fact the Council must have time to convene and deal with the offer(s) on MLS.ca and Century21.ca. )
( Again, According to the MGA the Definition of Market Value is:
MARKET VALUE : The price a property might reasonably be expected to sell for if sold by a willing seller to a willing buyer after appropriate time and exposure on an open market! "Fair Market Value" is NOT an "Approximate Market Value" nor an "Estimated Market Value" which the LSAC admits utilzing to determine a Listing Price for the Property. Also on the MLS Listing Highlight Sheet the following remarks were listed; "Priced to sell to an end - user who can bring collateral economic benefit/employment to the local community. Sale must meet with Council approval - please allow 15 days for acceptance of any offer". This statement on its own suggests a bargain price (Below Market Value) and that the purchaser meet the requirements set out by LSAC which would "limit the end use of the property" as well as "limit potential purchasers". This would suggest that this asset was NOT offered for sale on the open market to the "general public" as it should have been to ensure that the ratepayers receive fair market value for the LSAC Asset. ) These sites were visited nearly 120 times over that period, including 26 realtor visits. The real estate agent had print advertisements in local and capital region publications, as well as web listings, throughout the listing period. During the listing period, there were three (3) viewings, resulting in two (2) offers. The offers, received on January 8, 2018 and February 2, 2018 respectively, were presented to County Council at the regular County Council meeting on February 8, 2018.
( SEE COMMENTS BELOW THIS REPORT )
( What happened to the offer that was made in December of 2017 which was disclosed in the Dec 22 meeting wit LSARA and LSAC Councillors? First off, 57 days is almost unheard of for sale of commercial in County of Lac Ste Anne and specifically Sangudo. The average comparable type of property days on the market are almost 1 year. It may have been Listed and Advertised through Real Estate for 57 days but evidence is that an offer was received well before this 57 days identified. The statistics with respect to sales of commercial property of any kind in a 3 week span in this area is unheard of. Average days on Market are almost 1 year. This begs the question, “ Is the price reflective of Fair Market Value or is it indeed Below Market Value as the current activity would indicate?")
The purchase offer language in the two offers received was reviewed by County legal counsel to ensure that the liability obligations of the County were addressed, and that the “as is, where is” nature of the sale was clearly highlighted.
At the February 8, 2018 meeting, pursuant to the MGA, s 197(2), County Council closed the meeting to review the offers. Further, as per the Freedom of Information and Protection of Privacy Act, s 16, revelation of third party business information supplied in confidence, County Council had the authority to review and discuss the offers in the closed session upon return to open session,
The purchase offer language in the two offers received was reviewed by County legal counsel to ensure that the liability obligations of the County were addressed, and that the “as is, where is” nature of the sale was clearly highlighted.
At the February 8, 2018 meeting, pursuant to the MGA, s 197(2), County Council closed the meeting to review the offers. Further, as per the Freedom of Information and Protection of Privacy Act, s 16, revelation of third party business information supplied in confidence, County Council had the authority to review and discuss the offers in the closed session upon return to open session,
County Council made motion that they had reviewed the assessment information provided by the accredited County Assessor and discussed the two offers received, and based upon legal opinion regarding the conditions of sale, accepted the contract number 29769848 Dec 23 Offer to Purchase of the vacant old County Administration building.
( SEE COMMENTS BELOW THIS REPORT )
To ensure that the County was fair and open regarding the conditions of the vacant old County Administration building, copies of all building reports were provided to the purchaser. As well, the purchaser had access to the building to complete their due diligence. The building reports included the 2005 Engineering report, all Asbestos and Mold remidiation reports (Was the old Administration Building not in the Condemned State we were all led to believe when deciding on the New Administration Building? What issues were remediated to ensure the condition of the building now makes it viable to Sell?) the 2014 George Cuff (George Cuff is not a structural engineer, not a hygienist, not a mold specialist, not an asbestos abatement contractor, not a roofer so HOW or WHY would his Report be relevant? George Cuff was also an interim CAO so his OPINION should be excluded due to conflict) report which summarized the known defects of the building.
(Click to View the 2014 George Cuff Report)
To ensure transparency, (Ensuring transparency would have meant that process would have been followed or established, Independent value would have been obtained and answers of concerns in the letter from LSARA on December , 2017 would have been addressed.) Administration will be advertising the completed sale of the vacant old County Administration building, although no advertisement can be made until all conditions of the offer are met. At that time, advertisement will run in the Bulletin and here on the County website for a total of four (4) weeks, between the removal of conditions and the March 30, 2018 closure dates.
To ensure transparency, (Ensuring transparency would have meant that process would have been followed or established, Independent value would have been obtained and answers of concerns in the letter from LSARA on December , 2017 would have been addressed.) Administration will be advertising the completed sale of the vacant old County Administration building, although no advertisement can be made until all conditions of the offer are met. At that time, advertisement will run in the Bulletin and here on the County website for a total of four (4) weeks, between the removal of conditions and the March 30, 2018 closure dates.
( What would be the point of the advertisement? The conditions will already be removed and effectively the asset will be sold with no due process. )
FACT OR FICTION
THESE TWO PARAGRAPHS FROM THE LSAC DISPOSAL REPORT ABOVE CONTRADICT THEMSELVES!! SO WHAT IS THE REAL TRUTH ??
During the listing period, there were three (3) viewings, resulting in two (2) offers. The offers, received on January 8, 2018 and February 2, 2018 respectively, were presented to County Council at the regular County Council meeting on February 8, 2018.
County Council made motion that they had reviewed the assessment information provided by the accredited County Assessor and discussed the two offers received, and based upon legal opinion regarding the conditions of sale, accepted the contract number 29769848 Dec 23 Offer to Purchase of the vacant old County Administration building.
LSARA met with 3 LSAC Councillors on Dec 22, 2017. At that meeting it was revealed by a Councillor that in fact an offer did come in regarding the purchase of the Building and he was made aware of it on the 15th of December. During that meeting a member of LSARA pulled the listing up on the MLS® system and informed the Councillors that the Building was Listed on Dec 19 2017 AFTER THE FIRST OFFER WAS RECEIVED! This my friends, even the 3 Councillors present were not aware of.
The copy in green above contradicts any reasonable timeline that you are led to believe. If they accepted an offer that was dated December 23rd, then how would we have known there was an offer already received by LSAC on the building. Even if an offer was written on December 23rd then that makes it 4 short days on the market, not 57 days like they would like you to believe after the MLS® listing hit the system. Would that be considered enough time to be advertised properly or a better question yet:
Did LSAC Dispose of this LSAC Asset to ensure that the disposition is done in a manner which realizes the highest possible return to the County?
Again, According to the MGA the Definition of Market Value is: The price a property might reasonably be expected to sell for if sold by a willing seller to a willing buyer after appropriate time and exposure on an open market! Was this property listed for "FAIR MARKET VALUE"!
LSARA requested that if a policy was not in place then a new Policy which sets out guidelines to ensure that the disposition of properties is conducted in such a manner that it will realize the highest possible returns to the County is implemented prior to the disposition of any county assets.
LSARA met with 3 LSAC Councillors on Dec 22, 2017. At that meeting it was revealed by a Councillor that in fact an offer did come in regarding the purchase of the Building and he was made aware of it on the 15th of December. During that meeting a member of LSARA pulled the listing up on the MLS® system and informed the Councillors that the Building was Listed on Dec 19 2017 AFTER THE FIRST OFFER WAS RECEIVED! This my friends, even the 3 Councillors present were not aware of.
The copy in green above contradicts any reasonable timeline that you are led to believe. If they accepted an offer that was dated December 23rd, then how would we have known there was an offer already received by LSAC on the building. Even if an offer was written on December 23rd then that makes it 4 short days on the market, not 57 days like they would like you to believe after the MLS® listing hit the system. Would that be considered enough time to be advertised properly or a better question yet:
Did LSAC Dispose of this LSAC Asset to ensure that the disposition is done in a manner which realizes the highest possible return to the County?
Again, According to the MGA the Definition of Market Value is: The price a property might reasonably be expected to sell for if sold by a willing seller to a willing buyer after appropriate time and exposure on an open market! Was this property listed for "FAIR MARKET VALUE"!
LSARA requested that if a policy was not in place then a new Policy which sets out guidelines to ensure that the disposition of properties is conducted in such a manner that it will realize the highest possible returns to the County is implemented prior to the disposition of any county assets.
LAC STE. ANNE COUNTY IGNORED CONCERNS! WHY?
0 comments:
Post a Comment