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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

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16 COMMENTS

  1. Why is your community so oblivious? In CA, when citizens find out about improprieties such as these, we contact our state’s attorney offices and the Govenor to inquire into such dealings. Follow the money, who is the company that is buying these buildings for such ludicrously low prices? Do your research! Raise some dust, and do something!

  2. The corruption runs deep with the Roanoke City council. The old police horse farm which was about 17 acres was given this year to a private non profit business for a 30K rent to own agreement. And it was valued a few years ago at 2.5 million. Nice way to take money from the citizens and hand it over to their special interests.

  3. Roanoke City Council does this as often as it can get away with it. Soon they will do it all the time. This scam is worked the other way too… The city council voted to buy the condemned seed building for $750,000 and have it renovated. I wonder who owned it and who’s company gets the renovation work? A needy Roanoke firm or two I hope. There is far too much favoritism in Roanoke for the size of the fish bowl here.

  4. Roger Malouf is running for Commissioner so that he can help change the shadiness going on behind the scenes. The only way he is “involved” in this deal is by trying to find out the truth. It’s unfortunate that people who know the business, know the area and are trying to help the economy and the city are turned down on an offer that would only help the community and the taxpayers…

  5. To Tom: Regarding the name(s) of the people involved with Fifth and Church, I have heard that they are John Khan and his son Faisal Khan. This has been told to me informally and I have not been able to confirm it. Thanks for your message, dickBaynton

  6. I think where I lose it is how these unused buildings are even purchased this way. I mean – how do you even find out about them. What happened to the auction block so that anyone who was interested had a shot at renovating a piece of Roanoke. Why are these always closed deals? More politics in a place they DO NOT belong. We ALL live here and we all pay taxes here. Tired of the same old players making all the decisions and doing it behind a closed door. Equally as tired of things like this happening and no one doing anything about it who can. Shame on all of you… You embarrass me Roanoke. Last time I checked, I don’t live in Chicago.

  7. So, where is the reporting here? Find out why the council did this and report it. Don’t just tell us what happened, interview the council, their families, their neighbors, hell their cats if you have to, and tell us something we don’t already know!

  8. This article is full of misinformation that could have been easily clarified with a couple of phone calls. The city owned the land where the new Y is located, and they swapped it for the old site. No money actually changed hands, but the land values were recorded as sale prices. The property was publicly listed for sale for years, but the city did not spend many taxpayer dollars in a marketing campaign. Savvy real estate investors should have known how to find out what surplus property the city wants to sell. Even if they did not, several news reports described the previous efforts to sell the property to another investor who was not successful in securing financing and performance bonds. Getting the property back on the tax roles produces additional revenue for the city indefinitely, an advantage not available to private sellers. The value of having the building used productively is difficult to calculate exactly, but it definitely is in the best interests of the citizens of Roanoke.

  9. Bill Bestpitch suave little double talk up there would have you believe that accepting the $50,000 offer instead of the $10 one would not have gotten this property “back on the tax roles”.
    Bill, you are a fraud and a liar.
    This begs the question: Did the buyers have any connection to Bill Bestpitch? Will the people getting the contracts for renovations have any connection to Bill Bestpitch? If not, which member(s) of city council will those people have a connection to?
    Shame on you Bill and shame on the City Council. You are corrupt and should be impeached out of your offices.

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