Monday, October 5, 2009

Who are the Navy's appraisers anyway?

A lack of funding is the alleged stumbling block to the Department of the Navy's reluctance to buy out the Laurelwood housing contract at Naval Weapons Station Earle and prevent turning a section of the 11,000-acre mainside military weapons storage base in Colts Neck into an all-access civilian housing complex through 2040 and a potential terror target.

For those new to our case, the Department of the Navy argues it would be prohibitively expensive to settle with Laurelwood Homes, LLC (its developer who built the homes for military personnel in the late-1980s) on a buyout - one of two remedies proposed by NOPE; the other is outright cancellation (i.e. void the deal, as some contract language would facilitate)...on the order of $110-$120 million. Laurelwood's attorney, meanwhile, admits to the media that this Navy estimate is grossly inflated, and that his client - Teri Fischer - would take far less.

NOPE estimates the value of the 300 Laurelwood homes at $17-$20 million, based on several factors (housing upgrade and road construction costs to Ms. Fischer, contractual teardown of the homes and replenishment of the land to its "original state" in September 2040, depreciation, local real estate market values, environmental remediation, etc.)

Anyway...based a) on the disparity in NOPE's figures vs. the Department of the Navy's (no one has refuted our estimates, namely the Navy...and we are merely a grassroots coalition of volunteer efforts, not appraisal experts as you would expect the Navy would have), and citing b) some financial details about halfway into this September 22, 2009 report from The Hill on a landgrab over the Navy's shuttered Treasure Island base near San Francisco, it is pretty clear that U.S. Navy appraisers may have zero clue about property appraisal.

How else could you explain the roughly $100 million disparity between our estimate and the Navy's over the value of the existing 300 Laurelwood homes on the base, as well as its apparent $220-$230 million overestimate of the value of Treasure Island versus appraisers for both the City of San Francisco as well as the respected, independent KPMG?

In our view, it is just another example of how there is the Department of Navy is being guided or advised by people with no business sense, and that unfortunately, in our case to prevent civilians from ever residing at NWS Earle, the residents of the Monmouth County communities surrounding NWS Earle are left in the crosshairs of crippling behind-the-scenes deal-making.

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