CCDC to pay 22% above appraisal for ‘once-in-a-lifetime’ property downtown

The Capital City Development Corporation’s board of commissioners voted to buy a roughly 8,000-square-foot piece of land near the Boise Library.

The agency will pay $1.9 million for the land and then transfer it to the City of Boise. The agency held off on purchasing it last month after board member Rob Perez suggested the agency get an appraisal on the property.

The appraisal came in with an estimated market value 22% lower than the agreed-upon price – $1,557,400.

The property is on a block otherwise owned by the City of Boise. Immediately to the south of the site at 703 S. 8th St. is a warehouse the city owns that’s on a long-term lease. It sits across from the Boise Public Library’s downtown location and along the 8th St. Bikeway.

Escalating price

It’s unknown how much the agency paid over what others were willing to pay. The agency submitted a lower initial bid of about $1,559,500 but told the seller it would pay one percent more than any other offer received, up to a cap of $1.9 million.

The seller – the Lydia Merril Trust – came back with a counter offer: the very top of CCDC’s cap of $1.9 million. The trust’s real estate firm, TOK Commerical, told CCDC that it had multiple other offers on the property but declined to say what the price on those offers was.

“Is the trust operating out of goodness of its heart, or was there an assumption (by the seller) that CCDC is flush with cash, especially in this district, and let’s see how far we can take this,” CCDC commissioner Ryan Erstad asked.

“We asked the listing broker to disclose (the other offers) for our confirmation,” CCDC’s commercial broker Jay Story said. “Because this offer had multiple properties, the listing broker was unwilling to share offers.”

The agency decided to move forward, echoing comments made last month about what it called a ‘once-in-a-lifetime opportunity.’

‘It’s the opportunity.’

“Buying above market, while it’s no fun, it’s the opportunity. To pass up an opportunity like this for a difference of $324,000 would be very short-sided,” board chair Dana Zuckerman said. “One could say we overpaid. It was not an overpayment… it was a purchase of an opportunity to serve our city better than the market could have.”

Boise Mayor Lauren McLean, who also sits on the urban renewal board, said this is an investment in the future.

“We can’t act now because of the Biomark lease, but we will be able to eventually,” she said. “I look at it not as the cost today – but the opportunity cost in the long run. We can’t time value the price out because we don’t know exactly when we would be able to move on all these parcels. I think there is something we would lose if we don’t move on this.”

The city in 2011 signed a 45-year lease in 2011 to an LLC related to Biomark USA for the warehouse building directly to the south of the parcel CCDC will buy. Biomark is now a unit of Merck Animal Health, and still occupies the building.