Contra Costa County appears to be overpaying for Pittsburg motel for homeless by more than $5 million, releases appraisal

“In the interests of transparency” – Chief Assistant County Administrator Eric Angstadt

“The difference is primarily due to the below market purchase price” – from the appraisal

“This is a classic example of a gift of public funds” – County Assessor Gus Kramer

By Allen Payton

After learning that the county’s outside appraisal for the Motel 6 in Pittsburg was $16.7 million, and the purchase price offered by the Board of Supervisors of $17.4 million, was only 4.2% higher, it was learned today that the same motel sold for just $12 million in February 2019. In addition, it was assessed on January 1st, this year slightly higher at $12,226,480. After requesting a copy of the appraisal since last week, the County Counsel’s office released it, today “in the interests of transparency.” The appraisal shows last year’s “purchase price was modified to $13,200,000.” (See related article)

Asked for copies of what was believed to be both internal and outside contract appraisals from the Public Works Department Real Estate Division, Chief Assistant County Administrator Eric Angstadt responded, “I’m only aware of one appraisal. It was contracted out. I can give you what the topline is, but the appraisal is not available until after escrow closes.”

“The appraised value is $16.7 million at $96,000 per room,” he stated. “It’s 4.2% above the appraised value.”

Asked if the appraisal was done internally or contracted out, Angstadt said, “We always contract out appraisals. We have staff with real estate licenses. But I don’t believe we have any licensed appraisers on staff.”

“The state was very public about how much they were willing to pay, at $100,000 per room,” he continued. “So, it didn’t leave us with much room to negotiate.”

“We have not signed the purchase and sale agreement, yet. That will happen once we finish the due diligence. We are working our way through all of it. It’s scheduled to close escrow on November 10th,” Angstadt added.

However, Angstadt released the appraisal to the Herald, today after obtaining permission from the County Counsel’s office. It was done by West Hollywood-based HVS Consulting & Valuation, a Division of TS Worldwide, LLC which, according to their website, provides highly credible hotel valuations and appraisals.” (See page 13) HVS Appraisal – FINAL – Motel 6 – Pittsburg CA – 09

The sale price for the 41-year-old motel was $68,000 per room, last year.

In a search of the Assessor’s Parcel number for the property, which is 088-152-039 on the ParcelQuest Lite website, a link to which can be found on the Contra Costa County Treasurer-Tax Collector’s webpage and which any member of the public, county staff, Board of Supervisors and any appraiser can do, it provides the details of last year’s sale and this year’s valuation.

The closest comparable sale was the Ramada Inn, now Comfort Inn, in Antioch which sold in March 2017 for $50,000 per room. That’s a much higher end hotel than the Motel 6. Another comparable property, the Marina Bay Inn & Suites on Cutting Blvd. in Richmond near Pt. Richmond sold in August 2017 for $80,000 per room, and that’s in an area considered nicer than where the Motel 6 is located in Pittsburg.

“The real comparable sale is the property itself,” said County Assessor Gus Kramer, who has been an outspoken critic of the county’s purchase of the motel. (See related article)

“Did the appraiser back into the state’s and county’s number?” he asked. “How can the appraiser say the value of the motel increased in the last year by 45%? No property in the county has increased in value that much during that time.”

Asked when the property was assessed this year, Kramer said his staff did that on January 1st.

“This is a classic example of a gift of public funds,” he stated. “Just because the state is giving us this amount of money doesn’t mean we need to spend that much.”

“This is why local government is in trouble,” Kramer continued. “It’s not that they don’t have enough money it’s that they don’t manage what they have, well.”

An email was sent to all members of the Board of Supervisors, County Administrator David Twa and Angstadt asking them why there is such a difference in the value arrived at by the county’s contract appraiser as well as the offer price, and last year’s sale price and this year’s assessed valuation. They were also asked to confirm that the property in the online search was in fact the Motel 6, since it has the same address and the photo of it appears to be the motel. In addition, they were asked why the appraiser didn’t take into account the sale and assessed value for the motel and if they will now seek a second appraisal.

Text messages were also sent to Supervisors Federal Glover, in whose district the motel is located, Diane Burgis and Board Chair Candace Andersen informing them of the difference in appraised value and assessed valuation and to please check their emails.

The Board was holding a special closed session meeting, today beginning at 9 a.m. to discuss both Kramer’s lawsuit against the Board over allegations of violations of the state’s Brown Act open meeting law, as well as potential candidates to replace Twa who is retiring, this year.

The email and texts were sent between 11:08 and 11:10 AM Wednesday morning and the recipients were given a deadline of 1:00 p.m. to respond.

Angstadt responded with, “The appraisal does include a discussion and analysis of the past sale of the property and the reasoning, changes and circumstances that led to the appraiser assigning the valuation they did.  As I said in our earlier discussion Government Code Section 6254(H) exempts release of the contents of an appraisal before the acquisition of the property is complete.  Therefore I can’t directly answer your question about how they justified the higher value, but I can assure you they did discuss the issues you raised and their methods of determining the higher value they assigned to the property.

However, California Government Code § 6254 (2017) reads “Except as provided in Sections 6254.7 and 6254.13, this chapter does not require the disclosure of any of the following records:

(h) The contents of real estate appraisals or engineering or feasibility estimates and evaluations made for or by the state or local agency relative to the acquisition of property, or to prospective public supply and construction contracts, until all of the property has been acquired or all of the contract agreement obtained.”

A further question was asked if the county is prohibited from releasing the appraisal or just not required to and if they can release it to please provide it, as has been requested since last week.

In response Angstadt wrote, “I spoke with County Counsel and they said they we could disclose the appraisal at this time in the interests of transparency.  A number of the issues you raised are discussed starting on page 13.”

Appraisal Explanation for Higher Value Than 2019 Sale Price

On that page, the appraisal provides the reason for part of the higher price. It reads, “The ‘as is’ market value opinion in this appraisal is approximately 27% higher than the February 2019 purchase price. The difference is primarily due to the below market purchase price, as described throughout this report.”

Please check back later for any responses from the Supervisors and any other updates.

Below is the information from the ParcelQuest Lite property search of the Motel 6 property located at 2101 Loveridge Road in Pittsburg.

Russell V. Watts , County Treasurer-Tax Collector

Property Address: 2101 LOVERIDGE RD PITTSBURG CA 94565-5019

Full Detail $14.95  The Full Property Detail includes everything displayed here plus completed information for those fields where “See Full Detail” is shown. If a field is empty on this page, no data is available, and the field will also be empty on the Full Property Detail.

Property Address: 2101 LOVERIDGE RD PITTSBURG CA 94565-5019

General Information

Parcel # (APN):	088-152-039-9
Owner:	See Full Detail
Mailing Address:	25920 VIA MARGARITA CARMEL CA 93923-8313
Legal Description:	PCL MAP 78 PG 36 POR PCL A
Use Type:	COMMERCIAL
Tax Rate Area:	007-004

Assessment

Total Value:	$12,226,480	Year Assd:	2020
Land:	$2,550,000	Zoning:
Structures:	$9,424,800	Use Code:	See Full Detail
Other:	$251,680	Census Tract:	See Full Detail
% Improved:	See Full Detail	Price/SqFt:	See Full Detail
Exempt Amt:
HO Exempt:	N

Sale History

	Sale 1	Sale 2	Sale 3	Transfer
Document Date:	02/12/2019	See Full Detail		See Full Detail
Document Number:	19052	See Full Detail		See Full Detail
Document Type:
Transfer Amount:	$12,000,000	See Full Detail
Seller (Grantor):

Property Characteristics

Bedrooms:		Fireplace:		Units:	See Full Detail
Baths (Full):		A/C:		Stories:
Baths (Half):		Heating:		Quality:
Total Rooms:		Pool:		Building Class:
Bldg/Liv Area:	43,352	Park Type:		Condition:
Lot Acres:	2.905	Spaces:		Site Influence:
Lot SqFt:	126,542	Garage SqFt:		Timber Preserve:
Year Built:	1979			Ag Preserve:
Effective Year:	See Full Detail
**The information provided here is deemed reliable, but is not guaranteed.