Biscuit Run “Donation” Keeps Getting More Expensive

The specifics of how the Biscuit Run deal went down have been trickling out over the past couple of months, but The Hook got a real break recently when somebody gave them some confidential documents detailing some of the finances behind it. In this week’s cover story, Hawes Spencer writes about the ever-increasing cost to taxpayers of the state’s acquisition of the failed housing development. Hunter Craig, Coran Capshaw, and Boyd Tinsley were all investors (among others) in the 3,100 unit housing development on 1,200 acres just south of town. But spending $46.2M to buy that land only made sense in the crazy logic of the housing bubble. They put the planned “Fox Ridge” development on hold two years ago, and wound up selling the land to the state for $9.8M. Which is probably about what it was worth. But then they started negotiating tax credits—which is to say, taxpayer dollars—and that’s where the latest story unfolds. We’ve got a suspicious appraisal ($87.7 million), ever-increasing valuations, developers who may manage to turn a profit on this boondoggle, and what generally looks like a serious lack of accountability. Although it looks like the state should really investigate this apparent abuse of the open space donation system, both the governor and the attorney general have close ties to Craig, so that’s probably not going to happen. Read the article—it looks like quite a story is unfolding.

8 thoughts on “Biscuit Run “Donation” Keeps Getting More Expensive”

  1. Read the Hook story during lunch. Some points:

    — The appraiser who valued the land at $87.8 million is nuts.

    — The current appraisal of record, however, is more reasonable: $39(?) milion. At that level, the developers are losing money. Unless and until they convince someone to sign off on the crazy appraisal, there really is no big story here.

    — That said, I do appreciate The Hook for playing watchdog on this. That’s jouranlism’s best role.

  2. C-Ville broke the appraisal story Dec. 22.
    By my recollection, the The Hook followed with a short post linking to the C-Ville story, but with an opposite slant in the headline.

    C-Ville: “State paid Biscuit Run one-third of what developers sought”

    The Hook: “Deeds steamed: The appraisal that may have burned taxpayers”

    The Hook quickly expanded its post and removed the link to C-Ville, as I recall it. The longer Hook post is in the archives, datelined 3 hours after the C-Ville post.

    The most recent Hook story is based on a “bulging, taped-up envelope” containing more financial info than just the appraisal.

  3. Even at the higher appraisial, which i seriously doubt will go anywhere, do you really think they will turn a profit after the additional costs (loan, design and negotiation costs, etc)?

    That doesn’t mean that we shouldn’t watch what they are doing and make sure the state doesn’t over pay.

  4. Unless and until they convince someone to sign off on the crazy appraisal, there really is no big story here.

    The story is that they tried at all.

  5. I’m a bit concerned that some of the spin around the financing of this park may have truely negative consequences. Certain groups have already used the parks donation as an excuse to advocate for “restoration”/expansion of the growth area; nevermind that too much inventory on the market already was a significant part of the downfall of the development.

    I think it’s pretty typical that when a large property is donated that there is some give and take about what the real value is in regards to the tax credit. Keep in mind though, you don’t get full value for tax credits. They are usually sold at a loss. I’m willing to bet that all investors get is that they may not lose as much as they would have otherwise, but it’s really doubtfull that they’d make a profit.

    Either way, I can see some people’s point that the process may not have been conducted in the best way possible; however, both the State and our area stand to benefit greatly from this park. Leaving aside how the finances were allocated, it doesn’t change that this is a great deal for taxpayers. In the past few years Virginia state parks have seen more visitors than ever before. Tourism is still one of the largest economic forces in our State, especially in Charlottesville.

    Trust me, our tax dollars will be far better spent on this park, than the kind of massive subsidies that are required to support unsustainable residential growth in undeveloped areas.

  6. I’ll second Mr. Murray’s concerns.

    I’d like to add two thoughts:

    1. Taxpayers may subsidize growth whatever label is placed on the land.
    We could change Biscuit Run from rural area to growth area at the drop of a hat. A quick change in designation would not necessarily mitigate the real costs (or benefits) of plans developed thereafter.

    2. Some benefits of a park, as with many things in life, have no economic measure. These benefits are worthwhile nonetheless, as they bring joy, health, and well-being in non-fiduciary facets of life.

  7. Has there been any suggestion of criminal activity on the part of these fine folks? ie why would the appraiser give a such a wild valuation without “proper inducement”?

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