YMCA Sale In Roanoke Raises Big Questions

The YMCA building in Downtown Roanoke was sold by Roanoke City Council for $10.
The YMCA building in Downtown Roanoke was sold by Roanoke City Council for $10.

Roanoke Star Columnist Dick Baynton was asked to look into the recent sale of the YMCA building in downtown Roanoke and filed the following column this week.

One of the most sacred responsibilities undertaken by elected officials is the deft handling of taxpayer’s contributions called taxes, licenses, fees and penalties. Once anointed, these former politicians levy taxes and procure funds for ‘the greater good’ of their electors, also known as taxpayers. These elected officials oversee payments to public workers, vendors and maintenance. When equipment and buildings become obsolete or unused, these officials also have the responsibility of disposing of the surplus items at the highest value available in the market in an orderly and timely manner.

For example, the federal government wastes more than a billion dollars a year to maintain thousands of unused buildings scattered around the country. Like the former Countryside Golf Course and other properties, the former YMCA at the corner of 5th Street and Church Avenue SW was an unused building on the Roanoke City books.

This ‘old’ YMCA was built in 1956 and served the community until the new modern Kirk Family YMCA was constructed several years ago. According to city real estate records, the property was assessed at $901,000 on January 1st, 2013, lower by $52,000 than the assessed valuation of April 1st, 2009. According to these same real estate records, the City of Roanoke paid $2,856,200 for the four-story property on February 6, 2006.

Commercial realtor Roger Malouf attended the council meeting on May 6 of this year and learned that the property was being offered to a buyer for the token amount of $10. Taking this information to friends who are executives of Real Estate Investors of Virginia (REI), a local ‘C’ corporation, an offer was developed.

Mr. Malouf and the CEO of Real Estate Investors of Virginia, Dan Cullather, attended the city council meeting on May 20. Thinking that public input was being solicited, REI presented an offer for the YMCA property at 5th and Church of $50,000. The company agreed to all conditions of transfer of ownership except two. The two changes requested as conditions of the offer were: 1. A price of $50,000 instead of the $10 by the other prospective buyer and 2. Postponement of thirty days before closing to allow time for due diligence of the property. This brief delay request seems reasonable for a building that contains 52,276 square feet of space with considerable plumbing, wiring, heating and other important structural components that must be subjected to inspection and risk evaluation.

Mayor Bowers and other council members hastily brushed aside the REI offer despite their almost certain knowledge that REI members are collectively one of the largest property owners in the city of Roanoke. REI members present were surprised when the Mayor indicated that the sale to someone else would move forward.  REI is an organization of like-minded business people with several hundred years of accumulated experience in development, construction, maintenance and management. Collectively the 550 members own and manage real estate investment amounting to many millions of dollars. All this experience and investment capital could focus on the YMCA project to develop it into the highest and best use.

Real estate records show that the sale to the firm Fifth & Church LLC was transacted on July 1, 2013 for $10.

The question that evolves from this episode is; does the city council work in the best interest of the citizens? Or are the citizens simply a part of the landscape that provides for self-serving pay raises for the Mayor and council members?  Should the city officials conduct negotiations for disposal of city assets in obscurity or should transactions be exposed to the sunlight of transparency?

Consider this: If the Mayor and City Council can walk away from an offer of $50,000 in favor of a $10 one, forfeiting $49,990, what other transactions may be costing taxpayers? What other ‘deals’ are taking place that may be infested with political quid pro quo?

-Dick Baynton