Former Mayor Ken Kearsley’s letter in the Times last week regarding the value of the Legacy Park site is, I guess you could say, informative. Ken’s point was that we shouldn’t bemoan the cost, $20 million and counting, because three appraisals put the value at about $33 million although the breakdown in value of the developed and undeveloped parts of the property Ken didn’t mention. Once in my checkered career, I took a course in real estate appraisal and learned that the main criterion is that of comparable sales, modified by a reasonable estimate of future value. In other words, to appraise house A, find out what house B across the street, which is in about the same condition, sold for recently.
In the case of raw land, appraisals of the park site should have been based on the price for which a nearby 15 acres that could never be used for anything but a water treatment facility recently sold. The thing of it is, there isn’t any such comparable property in Malibu, in terms of size and restricted use. Therefore, there is no basis to estimate its present value and, sad to say, its future value is negative, because of park maintenance costs.
Moreover, the sales CCRs say that if the City decides in the next 75 years to use the park for income, for example as rental for an amusement park or some such thing, the title reverts to the seller. That’s also kind of interesting because, to hear the County tell it, Malibu could be wiped out any day now by a tsunami so that there would be no one around in which title to the park could vest. In another checkered career move, I once studied law, and to me this sounds like a violation of the rule against perpetuities, which is why I am a geologist.
But I don’t mean to be too critical of Ken. His position that Legacy Park is a good thing for Malibu clearly is justified, because everybody knows that chili is fattening.
Don Michael