The Reston Association Board said on Monday that the appraised value of the 3,200-square-feet set on 3.47 acres near Lake Newport is $2.65 million.
The 2014 county tax assessment for the property, which was formerly the Reston Visitors Center and currently is office space for Tetra Commercial Real Estate, is $1,248,370. The county values the land at $845,840 and the building at $402,530, according to county tax records.
RA announced last month it is seeking to buy the property, which sits amongst other RA properties such as Lake Newport Tennis and Brown’s Chapel Park. The board discussed at a meeting on Monday financing terms and borrwing up to the full purchase price of $2.65 million.
However, the community will ultimately decide wether the purchase goes forward. There will be a member referendum on the subject in April. The referendum will cost about $20,000, RA sources said.
In residential real estate, it is common practice for a home buyer to bid about 25 percent above the assessed value in a home purchase.
However, that is not typically the case when it come to commercial property, said area commercial real estate appraiser Thomas Kirchner. Kirchner is not involved in the appraisal of the Tetra property.
“There are so many factors that go into a commercial property, you can’t just say a certain percentage amount in a bid,” he said. “It doesn’t matter what the assessor says whatsoever. All they are assessing is a piece of property.”
Factored into an appraisal, rather than the purchase, is the “highest and best use of the property.” When you appraise a four-bedroom, 2 1/2 bath home, for instance, it will be used as a residence, so the value is pretty standard. With a commercial property, the limits are much different, says Kirchner.
“It is what is legally allowed [for the property] and what is economically feasible,” he said. “you can have two identical buildings next to each other, but one is a hotel and one is a condo and they can be appraised with millions of dollars difference.”
Also, complicating matters for this property is the Tetra building has not been sold in more than 10 years and there are no comparable nearby sales since it is an unusual piece of property.
The building is currently used for office space. RA CEO Cate Fulkerson said RA will get input from members at public hearings Feb. 26 and March 26 to determine the best uses of the property.
Some of the suggested uses could include holiday and break camps, after school programs, event and meeting rentals, extended child care for camps, art and fitness programming, all of which would bring in revenue for RA.
The building is in the current Reston Master Plan as a convenience center, which means it could be used for a variety of purposes, including retail and restaurant.
The original plans for the building approved years ago include a second story addition that could make a 6,930-square-foot restaurant, RA officials said. The restaurant would also be allowed to construct up to 50 feet into Lake Newport.
RA is working to remove the convenience center designation under the ongoing Reston Master Plan Phase 2 draft process. RA attorneys are recommending the plan designation be changed to limited office and community use whether RA purchases the property or not.
RA said it will not make the appraisal public until it has a ratified contract for the property.