Borough: Let bidding determine firehouse’s value

Princeton Packet
17 July, 1992

Borough: Let bidding determine firehouse’s value

Despite a request from Princeton Township, Princeton Borough does not plan to appraise the Chambers Street firehouse before auctioning it Oct. 1.

“Unless they know something that I as a former banker and current real estate agent don’t know,” said Township Committeewoman Ellen Souter, “I don’t know how they can accept bids and make a determination when they don’t have a qualified real estate value.”

Responded Borough Attorney Michael Herbert, ‘The borough does not want to expend further monies to determine fair market value. They believe the best way pf achieving this is through some form of open competition.”

The borough is responsible for selling the deteriorating structure because it is located there. But the township also has a stake in the transaction because Mercer Engine Company No. 3 will move from the Chambers Street station to a new home on Witherspoon Street in the township.

The switch has prompted the two municipalities to begin the, process of formally establishing a joint fire department.

Both hope for top dollar on the Chambers Street station because proceeds will help them fund the new firehouse, which is behind schedule, but expected to open this fall.

Anxious to expedite the sale so it can settle accounts on the new building, the Township Committee voted June 15 to ask the borough to obtain a commercial appraisal for the building. The township notified the borough of that decision in a June 19 letter.

“Presently the borough is not interested in an appraisal because it would cost at least $8,000,” Mr. Herbert said. “The borough is very concerned with spending money needlessly.”

Ms. Souter, claiming that broker Peter Calloway told her an appraisal “would cost less than $2,000,” said “the price would come off the cost of the firehouse.”

If the township conducted such a sale with no appraisal, she said, “My taxpayers could come back to me and say, ‘How do you know it wasn’t worth three times that much?’

“The borough would rather spend its money on hiring an auctioneer — for roughly $7,000-$12,000 plus commission — to reach as many possible buyers as possible.

That was the estimate given to assistant borough attorney Karen Cayci by a Philadelphia-based firm called Traiman, she said. .

Traiman has been asked to give the borough a written proposal next week outlining how it plans to market the old firehouse, she said. The company also is eager to give a presentation to borough and township officials, she said.

“Our recommendation is that we first hear from a group like Traiman,” she recommended to the Borough Council at its Tuesday night meeting. “They’d do advertising and mailings. They’ve handled real estate all over the East Coast.”

A promotion program would be a good idea because it is difficult to obtain sufficient exposure through newspaper advertising alone, she said.

Council members preferred to shop around more.

“I support in principle the idea of hiring a marketing adviser,” said Councilman Roger Martindell, but he suggested that the borough should solicit proposals from more than one company, saying, “We should look not only at companies with experience in the municipal but also in the private sector.”

Ms. Cayci said, “I’ve had difficulty locating other outfits that work on that scale.”

Nevertheless, said Mayor Marvin Reed, “If we don’t get every last penny that people think we’re going to get for this property they’re going to come back and say, ‘Why did you pick this auctioneer?’ ”

He suggested trying to find other auction consultants through the League of Municipalities. Borough administrator Thomas Shannon agreed to ask, the league at a meeting Thursday.

The borough faces two barriers to maximizing the building’s purchase price, Mr. Herbert said. First, statute does not allow any other disposition than public auction.

The borough has chosen to hold a live rather than sealed-bid auction, but in either case, he said “It’s the best way to go about this business. It’s costly and time consuming.”

Second, the firehouse is saddled with land use restrictions — including parking and setback requirements — that limit its commercial potential and therefore “tend to lower the value,” Mr. Herbert said.

For instance, he said, “We’ve been told it’s an ideal site for a restaurant, but if so, at minimum we’d have to make some arrangement for parking. Whoever the prospective purchaser is, if we have a substantial bid, we would attempt to work with that purchaser to allow for appropriate use of the site.

“We’ve been trying to correct all those limitations by at least entertaining the possibility of a zoning change for the property,” he added, but special treatment for a single parcel runs the risk of being considered spot zoning, which is illegal under state law.

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