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$600K spent for what, exactly?

Of the Keizertimes

As it turns out, the land taken over by the Keizer Urban Renewal Agency for $602,169 isn’t worthless.

The actual value of the 1.47 acre of land, deeded over to the city last month by developer Chuck Sides in lieu of the payment he owed for his local improvement district (LID) assessment, is listed as having a value of $0 by Marion County.

“That’s a misrepresentation of the property value,” said Susan Gahlsdorf, director of Finance for Keizer. “It’s not worthless. The county gives it a $0 assessed value because it’s a tract. That’s how they value different parcels. It does have some value.”

The property in question has power lines which make the land virtually undevelopable. So what is the actual value of the land?

“We don’t know what that is and we grant the fact that it does have limited use,” Gahlsdorf said last Friday.

Gahlsdorf was asked if that means the property could be worth anywhere from $0 to $600,000 — the approximate bill Sides owed.

“Well, I suppose a person could theorize that way, yeah,” Gahlsdorf said. “I don’t know that we’ve had any kind of appraisal on that.”

Nate Brown, director of Community Development for Keizer, said the city formally foreclosed on the property and bid what the LID assessment was on the property.

“Our attorney wants us to point out that the property is only assessed at $0 valuation, but that it has not been appraised and may have some valuation,” Brown said. “The reality is that Chuck is no longer responsible to pay the $600,000 but the city had to foreclose in order to pay off the LID.”

Brown, who estimated an appraisal of the property would cost around $2,500, said the city has to hold onto the property for a year and Sides can take it back during that period — if he’s willing to pay full price for it.

“Chuck is walking away,” Brown said. “The property has the power lines so you can’t do anything with it, except maybe a park.”

Sides said Tuesday alternatives were explored.

“Bottom line, we offered to donate the land to the city,” Sides said. “They said no. There were alternatives we explored but none of them worked out. We talked to partners on the other two pieces. They have value because you can do something with them. It’s hard to do that (with tract C) unless you have an idea what you can do on it. I have no idea what you can do on it, or I would have developed it. I don’t have an answer.”

Sides said he’s taken on partners to help with Area C, but took responsibility for thinking he would be able to do more.

“The reason was I had made a wrong decision on how long the down economy would go,” he said.

Gahlsdorf said urban renewal funds were used to purchase the land and pay off debt to save money long-term.

“The crux of this deal is we need to pay down on our debt,” she said. “We can only pay down on our debt with assessments we’ve received from property owners. Now that we’re the property owner of tract C, we can pay off the debt related to that, which is $600,000. If we hadn’t done that, that payment would be due in 2031 and we would owe twice as much interest cost on that debt. We would owe $1.2 million instead of $600,000.”

Gahlsdorf said Sides has lost a large chunk of money.

“Chuck lost his entitlement to the debt reserve,” Gahlsdorf said. “The deal we had with developers was that if they paid their debt on time and in full for 21 years, they would be entitled to a prorated share of $2.7 million in debt reserve. If they were late, even though they eventually became current, they would lose that entitlement. Chuck has lost $900,000.”

That makes Sides unique among Keizer Station owners.

“The rest of them are on time, are current and have never been late,” Gahlsdorf said. “Just Chuck’s have been late.”