Some Spanish Town residents are raising questions about the proposed sale of the 17-lot tract that formerly housed the state Department of Insurance building, which is one of dozens of state-owned properties the Division of Administration is hoping to sell collectively for $47 million to help balance next year’s budget.
Residents of the historic neighborhood, who are echoing concerns raised last fall by some legislators when the sale was first proposed, want to know what kind of guarantees will prevent a buyer from developing the lot—which is part of the Capitol Grounds and adjacent to a historic district—into, say, a gas station or high-rise hotel.
“The lot is zoned C-5, which means anything could go there,” says real estate broker Darryl Gissel, a longtime Spanish Town property owner and leading preservationist in the area.
What’s more, Gissel points out, the state is budgeting some $5 million from the sale of the property. To justify that price, a buyer would need to “develop something with a sizable income stream,” he says. “Suppose you have a hotel or an office building. Where would the parking go?”
Questions have centered on that particular tract of land, among the many on the list of properties to be sold, because of its proximity to the Capitol and also because of discrepancies over its value. Last year, an appraisal for the state valued the property at just under $3 million. The state then sought a second appraisal, which put the price tag closer to $5 million, the number that is now being used on the revenue side of the 2014 state budget.
State economist Greg Albrecht says the state typically sells surplus assets but that it is unusual to use the proceeds of unrealized property sales to balance the operating budget.
“It is not usual to do an asset sale to support state operations,” he says. “But if you don’t have a recurring revenue source, you have to go to things like this.”
Today’s poll question: Do you think the state should sell the vacant property on the Capitol Grounds near Spanish Town to a private developer?
