In the last two months I have listened to the Charlestown Town Council discuss purchasing the Browning beach house, Oyster Drive and Tucker Estates for potentially outrageously high prices. Fortunately, nothing was decided, but in the future we need a more rigorous method to evaluate any type of property purchase.
I have no problem with the town purchasing property if it satisfies two criteria:
Purchase is at a reasonable price; and
There is a valid/reasonable purpose for the purchase; which means it benefits the majority of taxpayers. Purchasing property just to take it off the market, i.e. to deprive it of usage, is not a reasonable purpose, nor is it being fiscally responsible.
An example of a beneficial purchase is the town’s purchase of Blue Shutters Beach, because it serves many town citizens and earns money for the town. Two prime examples of what I call deprivation purchases are the driving range (Pawaget Park) and Whalerock (The Moraine Preserve). The driving range was purchased for approximately $1 million, now it sits idle. Calling it a park is a joke; weed patch would be more appropriate. Whalerock was purchased for $2.1 million by a CCA-controlled town council. (I’ve heard all the excuses why they HAD to pay that price.) Now it is basically sitting idle except for a small trail.
I believe CCA’s philosophy is not to purchase property for the common good of the town’s citizens, but to deprive the property for other uses by other people. This means CCA is willing to spend considerable taxpayers’ money to achieve their goal of “non-use.” The CCA pushed for a conservation easement on Whalerock that would have ensured the land was never used, but it failed.
One time, a senior CCA member told me the town could never buy too much open space. I disagreed then, and I do now, unless my two criteria are met. I believe we have plenty of open space, especially when you add state and federal land into the total. The town’s responsibility is to protect and maintain all our properties. This year, the budget commission had to add additional money to the budget to supplement maintenance of our existing open spaces.
Once a purposeful purchase is identified, it should be purchased at a reasonable price. I have serious doubts about the quality of some of the high appraisals the town is receiving. I also have concerns about sole-sourcing appraisals. Potential property sellers look on the town’s coffers as a gravy train they can dip into with their bloated prices. Sadly, the town is allowing this to happen because we don’t have a better decision-making process.
In the business world, companies try to receive multiple, competitive bids before awarding work in order to avoid sole-sourcing. Once the bids are received, they are “equalized” by the contract manager. Equalizing bids means analyzing the bids to ensure the bidders understood the bid, there is no missing or unnecessary information, no math errors, no unrealistic low or high prices, etc. In other words, make an accurate apple-to-apple comparison of bids. A comparison table would then be generated for management justifying why a certain contractor was awarded the work.
Charlestown needs to adapt a modified version of this business approach. We should request two appraisals, instead of one, for any property. We are purchasing very expensive properties; the cost of two appraisals is miniscule compared to the overall cost of the property and the potential savings from overpricing. In addition to the two appraisals, the town’s tax assessor should provide a third price data point; his office has a very good handle on local sale prices. The tax assessor, after equalizing the prices by checking prices, data, appraisal methodology, etc., would prepare a comparison table for distribution to the public and town council for a decision. Another option could be after the tax assessor equalizes the three prices, he then automatically deletes the highest price, and the average of the 2 lower prices is the recommended purchase price forwarded to the town council for approval.
Don’t be surprised when the Browning beach house, Oyster Drive and Tucker Estates come back on the agenda with their bloated asking prices.
Steven J. Williams
This article was published as a Letter to the Editor in The Westerly Sun on August 20, 2020.