Deeds steamed: The appraisal that may have burned taxpayers
Any homeowner seeking a loan or a refinancing might be wise to hire Patricia Filer. If her appraisal of Biscuit Run is any indication, she has an ability to find value above and beyond what the market will bear.
Biscuit Run–- a massive undeveloped neighborhood saddled with debt and trapped by an unforgiving housing market–- appeared to be rescued by a year-ago deal that hinged on a mysterious appraisal. When Courteney Stuart penned her investigative cover story two months ago, she theorized that the only way the tract's wealthy investors could have paid off their delinquent loans and retained their investment was finding an appraiser willing to value the place four times higher than one arm of the state did.
Apparently, they found such an appraiser in the form of Filer at Orange-based Piedmont Appraisal Company. A story by freelance reporter Will Goldsmith asserts that Filer valued the land at $87.7 million.
"That's a big number," says State Senator Creigh Deeds. "That's just a big number."
But as Goldsmith reports in an upcoming issue of C-Ville Weekly, the big number is already receiving state scrutiny, as it comes in nearly double what was paid for it and more than seven times larger than the 1,200-acre parcel appraised for the Virginia Department of Transportation.
Finding a large appraisal was the key to an effort to trigger massive tax credits for the property's sellers who bought their parcel in 2005 for a then eye-popping $46.2 million and then made the mistake of rezoning it for housing–- just in time for a collapse of the housing market.
Any reduction in the allowable tax credits would appear to create wallet-shock for the wealthy Biscuit Run investors who include Dave Matthews band manager Coran Capshaw, Dave Matthews Band violinist Boyd Tinsey, and banker Hunter Craig. Their end-of-2009 deal selling the place to the state caused controversy not only over the secrecy-shrouded appraisal but because it took the land out of the Albemarle growth area for a state park of questionable value.
The deal was approved at the highest levels of state government complete with a sort of victory lap press conference presided over by outgoing governor Tim Kaine.
"I think somebody's head has to roll," says Rob Schilling, a former Charlottesville City Councilor who now works as a talk-show host with a particular affinity for shedding light on abuses of taxpayers. "That this number had to be dug up or extracted shows that somebody was scared of the media finding out."
Throughout the various media investigations, state officials insisted that revealing the number would somehow compromise private taxpayer information, and Goldsmith reports that deal orchestrator Hunter Craig, recently appointed to the UVA Board of Visitors, hung up before they could discuss the Filer appraisal. Courteney Stuart had a similar experience a few months ago–- with Filer.
When investigating her story, Stuart began calling the major Central Virginia appraisers qualified to value such large enterprises. While most denied any knowledge of the Biscuit Run deal, Filer gave this tantalizing reply: "I can't help you with that– I'm sorry," she said before hanging up the phone. A new request for comment, left December 22 on her office voice-mail, was not immediately returned.
Records on file with the state's board of professional regulation show that Filer, whose last name in the state database is given as O'Grady-Filer, earned her appraisal license in 1995. The state is prohibited from revealing whether any active complaints are lodged against her, and the record shows no evidence that Filer has ever been the subject of a completed investigation. She will, however, need to renew her license by next October.
The Department's records indicate that two appraisers had their licenses revoked last year and that already this year there have been four revocations in addition to various other lesser punishments for appraisers who fail to abide by professional standards set by the federal government.
"The entire industry has been getting more scrutiny due to the real estate bubble," says Mary Broz-Vaughan, the spokesperson for the Department of Professional and Occupational Regulation.
As for the value of the Biscuit Run tract, journalist Goldsmith asserts that the state Department of Taxation chose $39 million as its worth, a measure lower than Filer's but more than triple VDOT's, which was at $12 million.
For State Senator Deeds, the bigger picture is not one particular deal but the viability of a program he considers his "baby," something he pushed fellow lawmakers to create when he was a Delegate representing the greater Bath County area.
"The tax credit program was my baby because I was convinced we had to create incentives to protect open space," says Deeds. "When I see the tax credit program abused, it really bothers me."
Deeds says he plans to introduce legislation enacting stricter standards during the upcoming session of the General Assembly.
–updated 12:15pm Thursday, December 23 with Filer's good standing with the state and again at 2:19pm with comment from Schilling.