Monday, October 5, 2009

Has the City of Winchester embraced Shenandoah University into our local community?

There is no doubt that the City of Winchester has embraced Shenandoah University into our community.

I want to make it clear that I am a supporter of SU, but I am concerned as well as a plethora of local citizens with SU's growth at the local taxpayer’s expense. SU has purchased up some very, very prime-time real-estate from the City at basically “wholesale value” vs. “true market value”.

Did you know that OUTBACK STEAKHOUSE expressed interested in purchasing the Old Winchester Volunteer Rescue Squad Building? It was shared with me that a local realtor approached the Park-n-Rec board that OUTBACK wanted to offer $2million for the property.

Could you imagine how much tax base that would have added to our City Budget?

Also, it was shared with me that Rite Aid expressed interest to purchase that land for $1million and was going to proffer up to $3million for a new Rescue Squad building up on Rt. 522 beside COSTCO.

Wonder why the OUTBACK or RITE AID interest were never pursued of why that property was not offered out on the open market?

Another somewhat controversial issue on the old Winchester Volunteer Rescue Squad building and which is the NEW home of the SU business school. There were (2) leases on that property. A prominent family in Winchester gave WPRD a 50-year lease on that property because it contained so much rock in the ground as it was not much use to them. During the late 70’s-early80’s the WPRD leased that property to the WVRS for 99yrs according to a former Park-n-Rec board member during that time-frame

This is how this deal was broken down in February of 2004, as a council member shared with me, there was a quit-claim deed in which SU paid the City $325k and $872k went to Winchester Volunteer Rescue Squad. It was shared with me from a former SU employee that an SU official stated there was some small called loop-hole and they hope nobody called them out on it.

SU got the deal of the century when they purchased Rouss Park (7.2446 acres) for $1.5million @ 0% interest on a 3yr note. $600k was paid at closing and $900k was due by July 1, 1996. (Three separate payments of $300k were made by 7/1/96)

A statement from WincStar back on November 30, 1994:

The price of $1.5million was too high for one council member; however Councilman Larry T. Omps, also a Shenandoah University Trustee, said a price of $1million or $1.2million was more reasonable. The $1.5million price tag is “an undue burden on the university”. Omps abstained from voting on the motion.

Review the real estate deals that took place between 1993 and 1996 to support what easily be called the deal of the century. Pay attention to the variance in the price per acre average and please note, 3 of the 4 real-estate transactions were less than an actual acre and as I recall, these 4 properties were vacant land with no buildings residing on them when they were purchased by Shenandoah University.

    $8.09 per sq. ft or $327,956 per acre avg – 710 Millwood Ave, 5/14/93 (0.93 acres) SU paid $305k
    (Old Exxon Station lot which is now a SU parking lot beside Bob Evans)

    $5.80 per sq. ft or $252,772 per acre avg – 1680 Apple Blossom Drive, 7/29/93 (0.3877 acres)
    SU paid $98k (piece of land behind TV3 bldg beside Jubal Early Drive)

    $4.75 per sq. ft or $207,050 per acre avg – 620 Millwood Ave, 8/17/95 Rouss Park (7.2446 acres)
    SU paid $1.5million (The home of Ohrstrom-Bryant Theater)

    $9.71 per sq. ft or $423,370 per acre avg – 647 Millwood Ave, 4/1/96 (0.5905 acres)
    SU paid $250k
   (piece of land beside TV3 bldg, at one time, there was a service station located there)

    633 Millwood Ave, 12/2/93 ( 0.9182 acres + old C&P Telco bldg) SU paid $1 buck
    (the old C&P Telco building where the NEW home of TV3 was built)

How can anyone dispute that SU did not get the deal of the century when they purchased Rouss Park (7.2446 acres) for $1.5million @ 0% interest on a 3yr note.

To give you a little history on Rouss Park, former Park-n-Rec Director, Jim Barnett raised the necessary funds to build a new baseball field in 1978 at Rouss Park (current home of Ohrstrom-Bryant Theater) and once the dirt started to move, the officials from SU came running and protesting that WPRD could not put a baseball field there that it would mar the beauty of the campus. SU officials pledged a couple of thousand of dollars for water and sewer lines if the field was moved into the Park which is current location of Bridgeforth Field beside the BMX track. Unfortunately, it was clearly stated that SU has never honored that pledged and has never given anything for the construction project of Bridgeforth field in 1978.

Most of the site work for Bridgeforth Field came through the efforts of Jim Barnett who got most of the work done through volunteerism and donations. A $50k donation from a prominent family in Winchester went for the installation of the lights at Bridgeforth field and it was not from SU as some individuals in the area have stated.

According to the VAMAT system, SU has the following real-estate within their portfolio:

City – nearly 66.357 acres/parcels with a tax exempt value of $72.156 million and on file showing they only paid $11.1million.  Keep in mind, some property was donated and a transaction value of $1 or $10 had to be recorded to free the seller of any liability.

County – just over 71.9 acres/parcels with a tax exempt value of $5.792 million and paid just a little over $710k.

Another thing folks forget about, “LIVING TRUSTS”, how many of those are active where SU will be the beneficiary of someone’s trust? We have no idea.

According to a Winchester Star article back on Friday, January 30, 2009:

Shenandoah University has $66.8 million in assessed property that is exempt from taxes. That’s about $454,720 in tax revenue each year that the city doesn’t see.

Snippet from an article in WincStar back on September 15, 2009:

New SU President Tracy Fitzsimmons said she wants to make sure the university doesn’t allow debt to become a larger part of the 3,500-student university’s annual budget.

“I will not be sympathetic to further requests to significantly expand on facilities until we have achieved progress on [paying for] those items already being built,” said Fitzsimmons, who became SU’s president July 1 and will be inaugurated in a Sept. 26 ceremony.

Another clip from WincStar's Editorial October 8, 2009:

"Fitzsimmons at SU", Academics, debt her priorities

Mrs. Fitzsimmons will not grow the institution physically. Being anything but a "midsized university," she said, "would be a disservice to the community," But her 5-yr plan, to be initiated immediately, will focus on academic excellence.

A snippet of the article and to continue to support that the City has fully embraced Shenandoah University into our community …

City losing property tax revenue
Quad - State Business Journal
March 1, 2000 Peterson, Maggie Wolff

The acquisition of the ConAgra campus for Grafton School maybe good news for Grafton and the cadre of corporate lawyers who will make the deal, but for the City of Winchester it represents another in a recent trend of conversions of tax-producing business properties to non-profit status.

Just last year [1999], the city lost $75,000 in annual tax revenue, when the former Baymont Inn became dormitory for Shenandoah University.

On the opposite side of town, Valley Health System continues to develop the non-profit Winchester Medical Center with new parking decks, offices and outpatient facilities.

As for the OLD Armory ... another outstanding deal for Shenandoah University. This place has a tax assessment of $1.918 million. Breakdown as follows: $718,600 (Building), $22,000 (other buildings, shed and pavement) and $1,177,200 (land 2.252 acres)

Snippet from WincStar, July 13, 2009:

It’s still unclear how the facility will be used, she said. “What I pledge to you is that we will preserve the honor of those who have served here. What we do with this space and these grounds will reflect their duty and love of country.”

Though Shenandoah University recently bought the old armory for $750,000, school president Tracy Fitzsimmons said the memories of troops like Beasley and Cherry will be preserved.

Fitzsimmons didn’t mention any plans for a renovation, but 69 years after it was built, everyone acknowledges that the place could use some work.

Actually Shenandoah University was 50/50 owner of this building already with the Commonwealth Of VA-Dept Military Affairs. So SU bought out VA-Dept Military Affairs half for $750,000.

Were you aware that the City of Winchester owned 50% of this building up until June of 2006 at which time the City of Winchester SOLD their 50% stake to Shenandoah University for just one-dollar, $1.00 ... to clarify, it was donated to SU. The $1.00 transaction fee freed the City of Winchester of any future liability.

Just another prime example how the red carpet has been rolled by the City of Winchester for Shenandoah University … As it's been stated previously, give and take, it's a 2-way street but the perception is that it's been 1-way for SU's entire stay in Winchester.

Many local residents express their concern that their taxes have nearly tripled over the last 10-12yrs along with rising water rates as the perception is that the previous council’s did not have a DENIED stamp when tax-exempt requests came through the door.

Now the present City Council members have locked down the doors for tax-exempt waivers request at the present time and thrown the key into the ocean for the time being. WHY, because they know the City of Winchester has lost control of the tax base, not much $$$$$$$$ coming in and folks wonder why their taxes keep increasing. A lot of citizens want to criticize the present council on the denial of non-profit tax-exempt requests BUT they are not aware of the entire story. Those critics need to do some research!

I have had conversations with various folks within Winchester and several have stated, they want the prime-time real-estate back into the City tax-base revenue stream and trade with SU more Park-n-Rec land to grow their campus which is NOT tax-able.

More tax-base lessens the tax burden on you, the citizen!

It makes a lot of sense and in my own opinion; it will come eventually when Shenandoah University takes control of the majority of Jim Barnett Park. Have you every seen a college campus grounds not properly maintained? Just go down the road to Bridgewater, what a beautiful campus that is.

The perception is that WPRD is not properly funded. You always hear they are over budget, cannot spend anymore money before their fiscal year end is up. WPRD struggles in maintaining what they have. If WPRD is going to survive, they need more blue collar workers vs. more folks pushing paper in the office(s).

Former Park-n-Rec director, Jim Barnett, nobody will have a passion for the Park as he did. It was NOT just a job to him, it was his love and he got things done! I heard the stories where he would attend meetings just after coming off a mower or ball diamond basically filthy dirty. Did he care, no because Jim Barnett loved the Park and took much pride in it.

Folks need to just drive/walk the park’s property and pay attention to the detail. Look at the buildings around the ball diamonds. They only way things have gotten done with WPRD over the years have been through Winchester Baseball and other outside contributors. One could easily see SU starting a Park and Rec major somewhere down the road.

Look over the years as a former Park-n-Rec board member from the late 70’s-early 80’s stated,
“SU is slowly surrounding and suffocating the park”.

Has SU tried to negotiate better deals on their behalf?  Yes they have! Here’s one for you after I had a conversation with a former Park-n-Rec member who was on board during 1994-1995 time-frame. In regards to the OLD Rouss Park, now the home Ohrstrom-Bryant Theater, the Park-n-Rec board went out and got that property appraised which I assume was in the neighborhood of $1.5million. Obviously, SU officials did not like that based on this quote:

Larry T. Omps, November 30, 1994:
The price of $1.5million was too high for one council member; however Councilman Larry T. Omps, also a Shenandoah University Trustee, said a price of $1million or $1.2million was more reasonable. The $1.5million price tag is “an undue burden on the university”. Omps abstained from voting on the motion.

As it was told to me from this board member that SU hired their own outside appraiser and you know what happened? The appraiser that SU hired came back and tried to low-ball the Park-n-Rec’s figure. This person shared that when Park-n-Rec voted for the sale of Rouss Park which basically did not matter because City Council voted in favor of the sale the previous week. Some say that was behind closed doors, in an "executive session". It was told that Larry Omps sat right beside Dr. Davis at the head of the table during the Park-n-Rec board meeting and left many members wondering whose side is Omps on? How ‘bout that.

(Side note, before the summer of 1994, the Park-n-Rec board was separate from City Council, they were NOT an advisory board, they had their own power to make decisions, the Park-n-Rec director reported the Park-n-Rec board chairman, NOT the City Mgr)

SU is going to continue to grow and nobody will be able to stop it, which is a good thing for Winchester BUT where they grow needs to be controlled and their growth should not be allowed to happen with prime-time real-estate venues. If otherwise then SU needs to pay “true market value” not “wholesale value".

As we continue on each day, more of the story is being shared with the local community. How can that be a negative thing? Does our local community have a right to be informed?

Inside Tip: Look for a report to be shared by Shenandoah University in the near future on their economic impact on the local community. … I sure hope this report is not conducted by anyone associated with that appraiser that Shenandoah University obtained the services of back in 1995.

To close, for anyone who states Shenandoah University is not being embraced by the local community, then they have no idea what they are talking about.

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