City Attorney Jay Rubin said the ordinance will announce the City’s private sale of real property. “We have a negotiated purchase agreement,” he said.
The ordinance to be advertised agrees with Rubin’s statement: “The city shall sell and convey the above-described property to Claudea DePalma and Kevin DePalma, husband and wife, for the consideration of $26,000, to be paid at closing. Attached hereto as Exhibit 1 is the Purchase Agreement.”
Two other city officials made contradictory statements. After the meeting, the Sierra County Sun asked if others may make offers on the city land, given that there is a negotiated purchase agreement. Mayor Pro-Tem Cathy Clark said, “There is no negotiated purchase agreement.” The ad will put the land “out to bid,” she said.
City Manager Morris Madrid agreed, stating others could make offers on the property.
A request for a copy of the legal ad was not provided, nor was it published by press time.
The six lots comprise a total of .41 acres, which are 120 feet by 150. The land is located at the northwest corner of the intersection of Wyona Avenue and Clancy Street in the Hot Springs District.
There is no hot mineral well on the property, according to the appraisal. There is no “vertical improvements” on the level lot. A manufactured home was on the lot, the appraisal said, evidenced by “concrete runners.”
There is not only confusion about the sales ad; there is also confusion about how the city acquired the land.
Rubin said–and the ordinance states–the city acquired the property through a condemnation procedure. However, Sierra County produced a deed that indicates the city paid for or was given the land conditional upon its use for recreation.
The deed states, “J.A. Hodges, for consideration paid, grants to the City of Truth or Consequences [the six lots] . . .”
The deed goes on to say, “The same to be used by the City of Truth or Consequences for recreation purposes. The City of Truth or Consequences agrees to erect an appropriate, permanent sign as follows: J.A. Hodges Recreation Center.”
City Manager Madrid was asked to clear up the discrepancy but did not supply an explanation by press time.
State law allows the city to sell property worth over or under $25,000 privately or publicly. If it sells it publicly, it must advertise the sale twice. The value must be determined by a licensed appraiser. If the city sells the land publicly or privately, it must do so by ordinance, which must also be advertised. A minimum of two legal ads of the ordinance are required, once before adoption and at least once after adoption.
If the City is following the law, it appears Rubin is correct. The City is selling the property privately to the DePalmas.
The appraiser was Eric Van Pelt of the Las Cruces firm, Van Pelt Appraisal Group, formed in the early 1990s. Van Pelt has the highest certification given by the state, a General Certified Appraisal license, which allows him to appraise commercial and residential properties of unlimited value.
His license has been active since 1992, and in his appraisal he says he has made a study of Sierra County for many years.
He couldn’t do an “apples to apples” comparison of properties and their sales prices, he said. This area, like other “small markets” in the Southwest, is recovering slowly from the Recession. There were not enough sales over the last year to consider, the usual standard. He compared sales since 2010, when the local housing market stabilized after the previous years’ highs and lows.
He also qualified his appraisal by noting the depressed market. The area’s 8.7-percent unemployment rate is much higher than the state’s 5.1-percent and the nation’s 3.9-percent unemployment rates, he said.
He looked at several sales in the Hot Springs District, two with homes, subtracting the home value to get the land value. Both had smaller lots, but he cautioned larger lots always have less value per acre than smaller ones. He estimated a hot springs well added $15,000 to the lot value. Since the land has no well, he adjusted the value accordingly.
If the City marketed the lots for one-to-two years, it would probably sell at about $26,000, Van Pelt said. The six lots are platted but not officially subdivided, he said, the depressed market not making it financially feasible to go to the expense. He therefore concluded the highest and best use of the land would be as a single-family home site, “taking advantage of the corner lot.”