The developer renovating the first floor retail space of the Deport Square Apartment block in St. Johnsbury pushed back hard against the town’s re-appraisal of the property Tuesday night.
Brad Ashley, CEO for Kingdom Development Company, told the St. Johnsbury Board of Civil Authority that the town’s recent assessment of the retail space amounts to a 167 percent one-year increase over the 2017 appraisal commissioned by non-profit housing organization Housing Vermont prior to its purchase of the property last year.
“Sheer logic,” said Ashley. “Knowing the property has not been touched or improved or occupied since that appraisal in 2017. Sheer logic says the assessor’s figure is absurd.”
Ashley leads New Depot Square Commercial Properties (NDSCP), LLC which is a local investment group affiliated with St. Johnsbury Academy and Northeastern Vermont Regional Hospital. NDSCP purchased the 10,000 square foot commercial space at Depot Square for $400,000 after Housing Vermont purchased the the whole building from Massachusetts landlord Herb G. Berezin for $1,850,000 in 2018.
NDSCP plans to redevelop the commercial space with a goal of reviving the downtown retail sector.
But after the town re-assessed the space at $368,700, NDSCP appealed.
On Tuesday, Town assessor Bill Krajenski appeared to touch a nerve with Ashley when he testified that, “There is no better evidence as to the value of a building than what it sold for…Fair market value is fair market value,” said Krajenski.
Ashley said that argument simply didn’t apply.
“When the assessor lists us as a willing buyer and a willing seller, I would say that’s probably not quite the case when it comes to Depot Square,” said Ashley. “It’s been vacant for a long, long time and there’s nobody on God’s earth who would buy it.”
Ashley then said the recent history of the building supported his argument.
“It is a matter of public record,” said Ashley. “Beginning with the statehouse of Montpelier all the way down to the town manager of St. Johnsbury that it was an above-market purchase. Housing Vermont purchased the building, was not allowed by its board of directors, was not allowed by Vermont statute to purchase the building above appraised value. It took a special dispensation from the state legislature to allow housing Vermont to go above the market appraised value here.”
“The board of directors of Housing Vermont required a local community investor to add to the price in order to meet - not not the market price - but the seller’s price. The assessor looked at me dumbfounded in the first meeting and said, ‘Why would anybody buy something above appraised value?’ The answer is very simple. To try to help the town of St. Johnsbury.”
Ashley said the building should be assessed on what it’s worth now and not what it may be worth in future years.
“We will pay our fair share,” said Ashley. “Absolutely, Mr. Assessor. We recognize what the value of the property might be. We also know what it’s worth if I leave it boarded up again - for the next ten years.”
Ashley said he and his partners were “trying to do the right thing” for the town when they agreed to invest in Deport Square to make sure that the building was no longer under Berezin’s control.
“He held the business and the community hostage for decades,” said Ashley. “He refused to sell to anybody other than Housing Vermont. He got an above market value price for that…Now, let no good deed go unpunished. Now you want to asses us because we paid the price and got it out of the slumlord’s hands and launched the process for renovation and renewal. You want to asses for that even though it’s double the current appraised value. It’s insane.”