Properties in WVU's $14.5M deal appraised at $4.5M, records show
MORGANTOWN, W.Va. -- The properties that West Virginia University is spending $14.5 million to buy are appraised for about one-third of that -- just $4.5 million.
The Charleston Daily Mail says that's what it determined after examining Monongalia County tax records for 2012.
But Board of Governors Chairman Drew Payne told The Associated Press there's a big difference between appraised and fair market values, saying that his own home is probably appraised at one third of what he could get for it.
"You have somebody willing to sell it and somebody willing to buy it, that's the market," he said Thursday. "The location makes it worth it."
WVU was closing Thursday on 39 parcels in a deal the board approved earlier this week, along with the issuance of revenue bonds. Although records show the agreement was reached in May, it was only revealed to legislators in a report last month.
The sellers are Paradigm Development Group and RCL Holding, two of five companies incorporated since spring 2011 by Ryan Lynch. Paradigm approached WVU with the deal, offering to sell the properties in exchange for the right to develop, finance and manage at least one new student housing facility.
Paradigm's principals are Lynch, James E. Brown, engineering professor David R. Martinelli and a real estate developer, Peter Prokophchuk. Lynch also formed WV Campus Housing LLC, in which Brown and Martinelli are also partners.
Payne called the project "transforming" for a blighted neighborhood and said that quality housing has long been a problem. He characterized the deal as a public-private partnership in which WVU will basically manage the new properties that are created.
"To me, it's pretty amazing what they've done to put this deal together," he said. "I'm very excited about it. I just think it's a game-changing type of project."
The negotiations over the past few months have been secret by necessity, Payne said, allowing Paradigm and RCL time to buy up properties so they could complete the deal with WVU without creating a holdout situation where one person demanded more money.
"I think the people did a wonderful job of going out there and doing this, and keeping it quiet," he said.
While none of the buildings included in the sales agreement is especially valuable, the land itself is increasingly desirable, said Jim Hunt, former executive director of a redevelopment initiative called Sunnyside Up.
Recent construction projects have increased the population density, creating a shortage of housing near campus, he said. That forces many to live far off campus and commute.
"Living eight miles out of town and driving in on a bus is not the college experience to me," he said.
This is the latest in a string of big real estate deals for the university.
Just last month, WVU acquired more than 25 acres, including rental properties, three other lots and an unoccupied apartment building, for about $10 million. Last year, WVU bought the Augusta apartment complex property out of bankruptcy for $13.1 million.
WVU says the Sunnyside parcels are "uniquely positioned to meet critical current and future needs of WVU" and part of a plan to increase the number of beds for students from 6,000 to 7,600.
WVU has been aggressive about acquiring property when it makes sense, and Payne said people should expect that to continue "where it makes sense for the university and the city," particularly around the Evansdale campus.