Appraisers took center stage recently in an eminent domain case in Kansas City, Kan.
The city’s Unified Government (UG) is trying to acquire the Indian Springs Mall for redevelopment.
According to the Kansas City Kansan, the current owner of the mall and the UG remain far apart on the fair market value of the mall site.
On June 4, the parties met at the Wyandotte County Courthouse to submit information to a three-person panel of appraisers.
The panel will consider arguments made during a public hearing to determine the value the UG must pay Joseph Kashani - the mall’s owner - to acquire the property, according to the newspaper.
The two appraisers for the UG submitted values of the mall between $4 and $5 million.
Both appraisers said there was “some speculation” in their reports because they did not have full access to financial information of the mall or access to the mall site proper.
The appraisers both claim Kashani denied them entry, acknowledging that full access to the information could potentially lead to a change in their valuation.
Even a slight change in the UG appraisers’ valuation wouldn’t come close to the $35 million to $40 million Kashani says his property is worth. He added that he received an offer of $7.4 million for the mall in 2004 and an offer last year of $7.5 million.
Although Kashani had his own appraiser at the hearing, the appraiser did not give a report to the panel and wouldn’t state what he thought would be a fair market price.
The UG, as required by the condemnation process, made an offer of $6.8 million last year after the redevelopment district was approved but prior to the eminent domain proceedings. Kashani didn’t accept the offer.
Joe Vaught, president of the Vaught Group, a commercial real estate firm working with Kashani at the mall, said he believes a fair valuation for the mall site would be around $10 million.
Kashani originally purchased the mall site for $1.7 million in 1995, and has seen the mall travel a rough road since then. As the mall slowly declined from a lack of retail presence, Vaught said he encouraged Kashani to pursue a business park for the site.
TeleTech, a call-center company, operated out of the mall for five years but left in 2002. Shortly after that, the mall’s last major retail anchor, Montgomery Ward, went bankrupt.
The panel has until June 18 to reach their valuation, after which a notice will be sent to the county clerk. Once the UG makes the payment, the Indian Springs Mall will belong to the UG, according to the newspaper.
David Hutton is the editor of Valuation Review , the leading source for news and analysis for the real estate appraisal industry. Valuation Review provides its members with relevant content that informs them about the valuation profession and helps keep them ahead of the competition. Valuation Review is a publication of October Research Corporation , the nation’s leading provider of market intelligence, business news and regulatory information for the real estate, settlement services and mortgage origination industry.