Claremont
“This property likely has development potential, but after the EPA activity use restrictions are determined (that is years away), and whatever development will still take investment of hundreds of thousands of dollars, if not millions,” McNutt told councilors. “The best way for the city to start to see new taxes paid, and eventually higher values, is to recognize this thing was not going anywhere burdened by the pervious values. Now either the current owner, or a new owner, can begin to find options for funding to undertake any development.”
McNutt’s Sept. 12 memo was in response to several questions emailed by Assistant Mayor Allen Damren on the property and the new assessment.
“I understand how folks might see this as an amazing arrangement, but there are many complicating factors that make this property not worth what KRT (assessing firm that did the city’s revaluation) had it assessed for; similar to the Wheelabrator property,” McNutt wrote, referring to the shuttered trash-to-energy incinerator on Grissom Lane.
McNutt provided a recent history of the ownership and assessment of the five-story brick structure on Mulberry Street that was built as a mill in the early 1900s. Currently it is vacant except for tenants on the first floor, including a restaurant owned by city councilor Nick Koloski.
McNutt said that former owner, who sold the property in 2006 before the EPA issues arose, sought an abatement but instead saw the assessed value increase $28,000 to $488,000.
“Why this was done is not clearly documented,” McNutt wrote.
McNutt said in 2013 the building was valued by KRT at $498,600 and reassessed by KRT in 2014 with an increase to $670,400.
“We have no real documentation on how or why KRT increased the value to that degree,” McNutt wrote.
An abatement was filed in 2016 and an appeal sought with the state Board of Tax and Land Appeals (BTLA). McNutt said the appeal triggered a request by the BLTA to have a municipality’s assessing office try to mediate with an owner.
“This is where Joe Lessard (the city’s contracted assessor) was finally able to sit with the remaining owner and come to the present arrangement for the main parcel,” McNutt wrote to councilors. “In mediation I asked Joe to try and find some amount to keep the owner moving forward with the clean-up and potentially see some hope of righting this ship; $175,000 (assessment) is the amount that made sense to both parties. Both Joe and I are certain we would not have done any better at BTLA. The owners did not receive any money from the city in the abatement; in fact we made them pay the $8,000 lump sum.”
McNutt called the EPA (environmental) issues “serious in terms of regulations and costs to clean up” and said there is the possibility of litigation against abutting property owners because they may be the source of the groundwater pollution on the Topstone property.
He said the building was sold to three investors for $495,000 12 years ago, but only one owner remains active in the property, while the investor who was the manager had health issues that prevented him from continuing his involvement and the third investor simply walked away because of the financial losses.
“They paid $495,000,” he said. “Then enter the EPA and the collapse of the economy in 2008; and going forward, approximately, $1,000,000 of sunk costs by the new owners with very little likelihood of recovery due to all the restrictions that were being placed upon the building by codes, and the environmental issues.”
McNutt blamed most of the unpaid taxes on the one owner who became ill unable to help the others find new management to take care of the responsibilities.
Patrick O’Grady can be reached at pogclmt@gmail.com.
