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Op-Ed: Why RA Held Tetra Appraisal

by RestonNow.com — April 7, 2015 at 2:00 pm 25 Comments

Tetra Building/Credit: YelpThis is an op-ed by Reston resident Terry Maynard. It does not represent the opinion of Reston Now.

In the debate over Reston Association purchasing the Tetra property at Lake Newport, a major source of frustration has been RA’s refusal to release the Feb. 4, 2015 appraisal until seven weeks later.

RA released the report only after two public hearings were held, the referendum question and fact sheet were finalized and approved by the RA board, and the $2.65 million dollar conditional sales contract was signed on March 27.

Appraisals like this are prepared to aid in assessing the value of a property, its condition, and any constraints its use or development may face. They can be an excellent tool in deciding whether a purchase contract ought to be signed and at what price, but Restonians did not have the opportunity to see this appraisal until the sales contract was already signed.

Had the Tetra property appraisal been made public immediately, thus providing RA members with a meaningful opportunity to comment before RA signed the sales contract, I believe we would not be having this debate or a referendum. There are so many major problems identified in the appraisal even RA’s single-minded board would probably not have decided to move forward.

The $2.65 million valuation is the obvious place to start.  As RestonNow reported, based on comparable sales, the County assesses the value of this property at $1.25 million, less than half the sales price. The appraisal obtained by RA explains the large discrepancy: Their $2.65 million valuation is based on an RA-directed assumption of its “best and highest use” as a lakeside restaurant extending into the lake, which, of course, does not reflect the current state of the property.

Yet the appraisal also includes two “as is” Tetra property valuations, one based on comparable sales ($1.45 million) and one based on an income approach ($1.1 million). Both of these prices reflect the true current market value of the property and the price Restonians should be willing to pay.  Moreover, they are consistent with the county’s assessment.

Assuming that there is a lakeside restaurant is only one of dozens of assumptions in the appraisal that led to that high valuation. There is a list of 18 assumptions in the appraisal and variations on the word “assume” appear in more than four dozen places in the 26-page appraisal, many of them by RA instruction.  For example:

  • “The purpose of this appraisal is to estimate the “as is” fee simple market value of the subject assuming by client instruction that restaurant uses are permitted.” (p.1)
  • “We assume that there are no environmental conditions that would negatively affect any development or value of the property.” (p.10)
  • “It is our understanding that the subject has deferred maintenance, but by client instruction, we have been informed to assume that any and all deferred maintenance currently existing at the subject as of the effective date of appraisal has been corrected . . .” (p.11)

The appraisal is also clear on the scope of the many easements on the property. Besides the non-exclusive RA easements referred to in the RA “fact sheet,” the appraisal describes eleven other easements (pp. 8-9). These easements generally preclude redevelopment of the site except for the current building’s location and a small area west of it that obviously reduce its value.

Most important, however, is a major environmental restriction on the property’s development. The appraisal states, “According to Fairfax County Chesapeake Bay Resource Protection Area (CBRPA) maps, Lake Newport is shown as a Resource Protection Area (RPA) and the subject directly abuts, and extends into or over it.”  (p. 9)

The Virginia Department of Environmental Quality (DEQ) says that, in an RPA like this, the lake and the shoreline area within 100′ must be kept as is or restored to its natural condition if changes are made to prevent polluting runoff.  The Tetra property cannot become a restaurant no matter how much RA’s Board wants to assume that one is there.

Had the RA Board shared this information with the community in a timely manner, many Restonians would have quickly pointed out the flaws in the property’s valuation and the impracticality, if not illegality, of a restaurant being located there. That’s why restaurants did not buy the property earlier.

Instead of transparency, however, the RA Board of Directors chose secrecy again in a move that discredits them, costs us, and undermines the community’s trust in its leaders.

Now it is up to all of us to vote “NO” on this ill-advised Tetra referendum question.

Something on your mind? Send an op-ed to [email protected] Reston Now reserves the right to edit letters for spelling, style and clarity.

  • Eddie from Northpoint

    Thank You Mr. Maynard for another thoughtful analysis. It is very apparent that the only one competing for this property is RA, and they are essentially competing against themselves, and at very unfavorable terms. This deal just doesn’t make sense as you have pointed out above, as Mr.Flashman did yesterday and Mr. Farrell did last week.
    The CEO has railroaded this deal on the board and now the membership without a proper analysis, and need’s to be held accountable for either her incompetence, deviousness, or both depending on your point of view.
    This purchase must be defeated, and we shouldn’t have to bear the expense of a referendum, on a deal that seems increasingly dead on arrival.

    • Sally Forth

      Eddie, hold the phone on blaming RA’s CEO: She serves at the pleasure of the RA Board of Directors. Period. If you are looking to blame, and I think we should for the failure to disclose facts & appraisals and for failures of due diligence, then the BOD are your targets. Tens of thousands of dues dollars go into expensive RA PR campaigns yet time and time again, members are frozen out of meaningful discussions and decision making by a small group of insider elites who are trying to manipulate the rest of the board and all of us.

      Members HATE RA’s continuing secrecy on one issue after another. No amount of chest beating about how appreciative the board is of members’ interest and ‘getting involved’ will be believed when important info is omitted over and over from those of us who pay the bills.

      Now from Patch we learn that a 3rd RA meeting and tours of the Tetra building are scheduled for April 21 at 6PM at Brown’s Chapel. How transparent will this meeting be? Will dissenters be allowed to speak? Will members be allowed to ask questions AND get answers? At the 2 bogus, pro forma Tetra hearings, members asked questions but few if any answers were forthcoming.

      For sure reasons too numerous to list here, the Tetra purchase is flawed beyond repair. My question is: WHEN will our RA Board shape up and STOP the parade of fraudulent behaviors that damage our ability to love our HOA?

      • FULL TIME BOJANGLER

        The answer is NEVER. They will never shape up and stop their course of action on this, or any of their pet projects. Civil disobedience through not paying our dues may be the only way.

        • edgyone

          This is not a pet project. These people are stealing our money! Wake up! 2.65 million dollars will be disbursed from a bank the owners of the Tetra property, Reston will have to pay that back over the next 20 years. Who ever is in charge of this deal at Reston Corp is going to get paid. I have no doubts about that. And there are no secrets, this is all done in the open. They take us for a bunch of sheeple that won’t do anything to stop them. Who is up to proving them wrong?

          I think I hear crickets….

          • JCSuperstar

            Hey edgy, you not taking your meds again?

            https://www.youtube.com/watch?v=KYUTPdyFbik

          • edgyone

            Why are you for this? if this is just a bad deal where RA is insisting on paying double for a piece of property is that you are just as intellectually challenged as our BOD? You seem like a real cheerleader of this project. What are you getting out if it?

          • JCSuperstar

            edgy, just shows how daft you are. If you would just read and gather facts, what a wonderful thing that would be.

            As I have sated already: If you would bother reading the facts about this, for instance, on Reston Now, you’ll see this referendum has been discussed ad infinitum.

            I say just let it be the restaurant in the development plan.

            The county development plan states it can only be a restaurant/office.

            The site for the additional restaurant over the lake looks awesome.

            The owner of the building wants to sell it, so let the natural course of events take place.

      • JCSuperstar

        With two of the four Director’s seats going unopposed this election, I’d say there’s another issue.

      • LeftPolitico

        Why was Brown’s Chapel chosen for the April 21 meeting? It has a very small seating capacity. Is RA trying to limit the number of people who can get in?

        • Terry Maynard

          My understanding is they will do a walking tour of the Tetra property.

    • FULL TIME BOJANGLER

      The Board will probably give the CEO another performance bonus. I’d love to have the time to properly research all decisions made by this board including finding out if any of the consultants hired have any direct or indirect relation to the board or the CEO. If the community had any true investigative reporters who would do it, that would be great.

    • Terry Maynard

      Thanks for your comments Eddie.

  • ConcernedDuesPayer

    Thanks for the analysis… Unfortunately those reading RestonNow are not necessarily representative of those who will be voting. Those who will be voting will be basing their decision on the same rose tinted info we have already seen published.
    As it stands, I’d estimate the cost of administering the referendum to be about $50K+, (based on the article about savings if going electronic voting), and the contract backout date for a refund of the $27K deposit is April 25, before the referendum ends. So regardless, it is going to cost us close to $100K.
    I really do think using the publicly available voting record addresses of who is likely to vote on the referendum is one way to get some alternative facts out.

    • edgyone

      Don’t you think this looks like a corrupt deal? Even from the rosy picture that Reston put out? Could the directors of Reston possibly be so naive, so devoid of knowledge of how a real estate transaction works that this could just happen? I have seen this type of thing in third world countries, we all know what the deal is there. This real estate transaction is a little to similar for me to be able to take it at face value.

      • ConcernedDuesPayer

        I don’t think this looks like a corrupt deal. I don’t think the RA board has mal-intentions. However, I do suspect that they believe it IS in the best interests of the RA members to purchase the property at almost any cost to prevent a developer from acquiring the property. That any cost probably is the value a restaurateur would be willing to pay to realize the assumptions in the appraisal.
        If that is the case, then the question is do we want to pay an extra 1.5 million over the value to us to simply prevent a restaurant from maybe expanding the property. And do we want to pay the on-going costs to redeem that premium by re-purposing the property to something we would be better served by elsewhere.

        It’s a shame there isn’t a forum for a two-way dialog between the members and the board.

        • edgyone

          So are they just really, really dumb? Why would they gift 1.5 million dollars to the land owner? And if there was a nice developed area in the middle of 100 acres of park that would be appreciated a lot more than what they ate planning. Reston needs more nice places for us to go. I still think this is suspect. If there is a question have an auction and see what an interested party would pay.

        • Terry Maynard

          The possibility of redevelopment as a restaurant is virtually nil because of the extremely limited space to do so and the FACT that the Chesapeake Bay Preservation Act and a County Resource Protection Area (RPA) ordinance implementing it here PROSCRIBE development within 100′ of the Lake Newport shoreline to protect the Bay. There are also other easements besides RA’s that crisscross this property that would hinder any development.

          You might be able to put a food truck in RA’s parking lot, but that’s about it. And some of them serve great food!

    • a 44 year Reston resident.

      I fully agree that purchase of the property at the excessive price would be a financial bonanza for Tetra, much to the chagrin of the homeowners. RA does not need another facility to play with and the citizens should not have to pay the cost over the next 20+ years. The citizens of Reston need this facility even less than the grand sports facility that RA wanted to build in that area.

  • Fix your site

    How does one go about voting against this?

    • Secret Observers

      …..YES Vote or NO vote will not change outcome. History has shown that the outcome is already secretly decided/controlled. “Manipulate To Control” is well known with HOAs.

      “They will never shape up and stop their course of action on this, or any of their pet projects”
      …… May God bless member(s) with courage and luck to go against them.

      “RA’s CEO: serves at the pleasure of the RA Board of Directors. Period…..”
      ….. or CEO secretly controls/manipulates BOD to serve his or her pleasure.

      • edgyone

        This is why we need to start a grass roots campaign to return the land we own to America. This fiefdom that is Reston exists at our pleasure, and we can vote to throw off the yoke it imposes. Or are you all willing serfs?

    • JCSuperstar

      Read.

  • JCSuperstar

    Just noticed a lot more info showing up at the Reston web site. In my opinion, the renderings of the restaurant look beautiful.

    • LeftPolitico

      JC Superstar, did you read the part of Terry Maynard’s op-ed that says a restaurant could not be built on the site because of VA DEQ requirements? Do you think that Mr. Maynard is wrong? If so, let’s hear your reasons.

      • JCSuperstar

        Didn’t say he was wrong, just hoping he’s wrong. It’s a beautiful venue.

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