How much is the former downtown McDonald’s worth? Far more than city officials thought it was.
The vacant, one-story building on East Main Street sits wedged between a stretch of other, mostly vacant buildings. And the city wants to buy it -- just to tear it down.
But when an outside appraisal came back at $800,000 – nearly three times the assessed value – it caught some in City Hall by surprise, including Dana Miller, who leads the city’s neighborhood and business development efforts. Even though the building sold for the same amount last year.
“We’re used to looking at those buildings on Main Street and thinking about, you know, their condition,” Miller said. "Sometimes we forget that there is also underlying value in these buildings, that may not necessarily be immediately obvious.”
The city expects to tear down the mid-block building this fall or winter to create a pedestrian plaza they call Main Street Commons. The state is chipping in $1.3 million for that effort.
“The Commons really is intended to be the city's contribution to helping to create this idea that we can have a pedestrian-friendly downtown; that we can get more (activity) on the street; that we can generate more retail opportunities,” Miller said.
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More development -- including a hotel, restaurants and housing -- is planned on either side of the plaza. The surge in investment is being spurred on by state assistance, nearly $10 million all told.
City Council could decide next week whether to move forward.
Why the difference
The disparity in assessed versus appraised values is an example of how underassessed some parts of the city have become, Miller said.
That has a particular impact on neighborhoods.
“I bought my first house in the 19th Ward. And I sold it for $60,000 to buy my next house,” he said. “That was 30 years ago. And if I go back and look at that house now, it's still worth $60,000.
“That doesn't make any sense to me. … That's not a way to build wealth in our city families.”
But while assessments, on which property taxes are based, are about what is there today, appraisals can consider what could be.
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And the sometimes glaring differences on commercial properties draw attention.
The city must get an outside appraisal, and then abide by it, anytime it seeks to buy property. And those routinely exceed the city’s own assessment of the property.
Appraisals on properties in the Bulls Head revitalization area on West Main, near the split with Chili and West avenues, ran 26% above assessed value, on average. A few years ago, the city paid $1.5 million – four times assessed value -- for a parking lot at Lake Avenue and West Ridge Road. A police substation was planned but never built.
The long-stalled stretch of East Main Street – now seeing millions of dollars in renovations -- is a good example of the future being far brighter than the present.
Investments drive values
The block once was envisioned for a performing arts center and downtown Monroe Community College campus. The failed Rennaissance Square project is blamed for freezing investment, allowing the buildings to deteriorate as developers focused instead on the rest of downtown.
Now sales prices are on the upswing, as are assessed values.
Consider: The Dutton developers – Patrick, his cousin Luke and uncle Gary -- paid $800,000 for the old McDonald’s building last August. A few years ago, they paid $500,000 for the building next door. A few years before that, they paid $110,000 -- combined -- for three other buildings on the block.
Their building next door is going to be a hotel and restaurant that will open onto the plaza and likely have outdoor dining space. As for why they bought the McDonald’s building, only to sell it months later, Patrick Dutton explained that the state required site control before considering a project for grant funding, and the city didn’t want to take the risk.
