More questions and answers on the Tetra property acquistion

We present three e-mails below.  First is a small set of questions from a cluster president to Mr. Rick Beyer regarding his "context" e-mail we've previously published with Terry Maynard's comments.  Second is Mr. Beyer's response.  And finally you'll see Mr. John Farrell's response to Mr. Beyer.  They are presented in order below without e-email addresses.

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Rick - 

Thank you for your emails. I have two questions:  

1. On the assessment, whose is it - Tetra's?  Why is it so much higher than the County's? If the higher assessment is  based in part on development, what exactly does RA propose in the way of development?  I don't expect a rescue like this to make money, but the $200K that you mention - what does that come from?

2. What is your response to the suggestion that environmental restrictions and easements already prevent development by Tetra?  Is this land subject to development or not? Why hasn't Tetra developed the property over the 17 years that it has controlled the site?

Thanks for your reply,

John *******

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From:  Rick Beyer

John,

Thanks for your note and good questions.  

The appraisal did not come Tetra.  RA has received  two separate appraisals provided Robert Paul Jones Company – certified appraisers, based on Fairfax - $2.65 Million and $2.76 on separate dates – both have detailed comps;  Documentation is on file.  Also Rescue Reston coalition reached out to their legal counsel (Stephanie C. Reger) who confirmed $2.6 Mil comp is on the low end. RA is buying for $2.6 million, the lake front facility and 3.5 acres of property.

Regarding the county assessment which is lower; this  used  for tax assessment purposes.  A good reference is to look at your own  home and its county assessment.    If we all sold our own  homes at the county assessment, we might be very disappointed.  The county assessment is usually  40% to 50% lower than actual market. 

The $200k as part of the transaction comes from Tetra. RA also has a lease commitment for up to $200k from Tetra. RA is also getting $650k proffer from a developer as part of a common area contribution to RA.

Regarding the land; yes it can be developed, even with certain restrictions and would be much more valuable than $2.6 Mil.  Why hasn't Tetra developed?  They wanted to construct 50,000 sq  ft of buildings which was going to greatly impact the RA member tennis area; but the RA members fought this as it would significantly disrupt the continuous 98 acres of common property owned by RA members.

This is a very good transaction for RA members and I hope you can vote YES to ratify the unanimous board decision.

All the best,

Rick Beyer

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From:  John W. Farrell


 John

Terry forwarded Mr. Beyer’s latest e-mail to you and asked me to respond because I am a real estate & land use attorney who has practiced in Fairfax County and lived in Reston since 1984.

I think he also thought it would be appropriate for me to respond since I am the cluster President of Colonial Oaks.

There is only one appraisal that Reston Association has disclosed. It's dated February 4, 2015, is 95 pages long, and basically agrees with Fairfax County that the “as is” value of the Tetra property is $1.3 million.  

The County is required by the Virginia Constitution to assess all real estate at its “fair market value.”  That’s the same standard that appraisers are required to follow.   In 2014, the County said the Tetra property was worth $1.246 million.  In 2015, the County said the property had lost value and was worth only $1.204 million.  To suggest that the County would voluntarily underassess real estate by 50% is to suggest that the County would voluntarily forego $10,000 in tax revenue from the Tetra property.

So how does the appraisal get the extra value?  It claims that additional office space would be worth that money.  But it quotes the current owner, on page 13,  saying there can be no expansion of the office space.  

The appraisal does mention that a 1981 drawing shows an additional restaurant but the appraisal then fails to find any comparable sales for a restaurant.  

The office comparable sales the appraisal does cite are not located in Reston but rather are found in Falls Church and Fairfax City.  Most of these comparable sales are so different from the Tera property that the appraiser had to adjust the values by 50%.  If a comparable needs that great an adjustment, most appraisers and courts would find that it is not a comparable property.

Could the restaurant even be built?  No.  Since the 1981 drawing, Fairfax County has adopted the Chesapeake Bay Preservation Ordinance that imposes a 100 foot no build zone around every water body including Lake Newport.  Further, recently adopted stormwater regulations makes building anything at this site difficult.

Also, most of the parcel is subject to a parking easement held by Reston Association and a floodplain and stormwater drainage easement held by the County.  These easements significantly restrict what can be built on the site even if the Ches Bay Ordinance didn’t preclude development.

Two different restaurant owners have looked at the site and rejected it.  The site’s lack of visibility from Baron Cameron is a serious impediment to a restaurant as the appraisal suggests. 

No 50,000 square foot buildings are referenced in the RA appraisal or in any other documents.

What Mr. Beyer repeatedly fails to disclose in his blizzard of e-mails is that his house is one of only 2-4 houses that directly overlooks the Tetra property and would be the principal beneficiary of RA’s purchase.

I’m happy to answer any questions that you or anyone else has regarding this issue.

—

John W. Farrell  Attorney at Law

1350 Random Hills Road | Suite 500 Fairfax, Virginia 22030-7421 email  jfarrell@mccandlishlawyers.com tel (703) 934-1182 | cell (703) 507-1182