by Matt Rosenberg August 5th, 2012
Under an ordinance set for approval Monday August 6, the Seattle City Council would authorize the spending of $967,617 in 2008 city parks levy funds to expand the tiny pocket park called Christie Park in the University District. Once the city completes the acquisition of a neighboring house at 4257 9th Ave. N.E. that is currently rented to University of Washington students and demolishes the structure to double the size of the 5,000 square foot park, Seattle’s government will be poised to receive a $500,000 reimbursement via a Conservation Futures grant tentatively approved by King County, according to a city staff fiscal note on the project. But the house that the city would buy for $795,000 as part of the project, is assessed for 2012 taxes at a value of just $480,000 by King County and has an estimated market value of not more than $600,000, according to a variety of informal estimates from real estate sources.
The 2008 parks levy included a spending category for city property acquisitions to develop neighborhood parks and green space in “areas with park and open space gaps.” The doubling in size of Christie Park, known before 1981 as the 43rd Street Mini-Park, would also help the city comply with expectations for additional open space spelled out in the U District’s Urban Center Village concept and a series of parks department planning strategies other than the parks levy, which were formalized between 2006 and 2011. The park has a half basketball court on rough blacktop, a picnic table, sound-absorbing walls bordering the house, and a small upper terrace with two benches, a trellis and foliage.
The residential property itself is expected to cost the city $795,000 according to the staff fiscal note, with another $200,000 for city staff work, real estate transaction costs, environmental testing, land surveying and demolition of the current house. Demolition is planned for next year, after closing on the deal. However, according to King County Assessor’s Office records the property was most recently assessed in 2011 for 2012 taxes at just $480,000, down from its peak assessed value of $575,000 in 2008 but still considerably more than its pre-bubble assessed value in 2007 of $347,000. The positive spread between the proposed purchase price and county’s assessed value of the property – which is always described as approximate and often below market value – is nonetheless a robust 65 percent.
The 2,840-square foot home on a tenth of an acre is described officially as having four bedrooms and three bathrooms. The city ordinance does include payment of $3,200 per month for up to a year, or up to $38,400, to the owners for rents foregone after the current lease expires at the end of August. Tenants on site at the property Sunday, escaping the 90-degree heat in a small wading pool in the backyard, said seven of them lived there and confirmed the monthly rents totaled $3,200. Though technically the house is listed as having four bedrooms, there are really seven, they said, including three in a remodeled basement. Zillow.com’s “Zestimate” of the property’s worth is $598,279, including rental income of up to $3,200 per month. Realtor.com’s estimate is $537,222.
Asked about the proposed $795,000 sale price for the property, Ray Akers, a Seattle realtor for 25 years, conducted a preliminary analysis and in an email interview said, “The data indicates this home could be priced anywhere from $400K to $600K, depending on the condition of the property and market conditions. Variables that affect price are interest rates, inventory of listings, economic conditions, and more. Right now, listings are in short supply and the supply of homes is less than two months. That makes this a seller’s market, with prices trending higher. In support of this, there are reports of bidding wars, especially in neighborhoods north of the (Lake Washington) ship canal……As an investment property, there is the annual income to consider. I would be inclined to suggest an appropriate price range of $450,000 to $600,000,” unless there is documentation to support unusually high rental income.”
Donald Harris, Manager of Property and Acquisition Services for the Seattle Department of Parks and Recreation, said the city hired a private appraiser and negotiated with the owner. The city did pay more than the appraised value, but this was justified for several reasons, he said. One is the opportunity to leverage an existing small park space through expansion onto an adjacent property. In addition, Harris said, there was a significant revenue stream the owner is sacrificing, and proceeding to a forced acquisition through eminent domain would drive up costs.
Tenants said Christie Park is used by homeless people and others, and has not posed any real problems for them in terms of nuisance or public safety concerns. The city’s estimated expenditures on the park expansion project include annual maintenance and operations costs through 2017, at a level then of $4,003, which is expected to continue rising two percent each year due to inflation.
UPDATE: The City Council approved the ordinance by a 9-0 vote. See video of the meeting (23:57 to 26:19).