Empire Building at Taxpayer Expense and Overpaying While At It

One of the most controversial aspects of John Martin’s reign has been his empire building program that has resulted in the taxpayers paying absurdly inflated prices for property in Downtown Glenwood Springs. One of the most egregious transactions was the purchase of the Worrell/Durrett Building in 2012 for $2.525 million dollars, a documented overpayment of $1.43 million dollars.

When pressed on the reasons for paying such a high price, Martin’s spokesperson stated that “has significant value beyond a comparison to recent sales of commercial property, because of its prime downtown location and proximity to other government buildings.”

The problem with that excuse, however, is that the appraisal took these factors into consideration when reaching its valuation. What really happened is that John Martin took the reigns of county management and gave away taxpayer money to lawyers who had previously represented him while Martin was a Glenwood Springs Police Officer facing discipline.

Can’t believe it? Look at the following evidence and decide for yourself.

Campaign Press Release About the Worrell/Durrett Building Acquisition

Settlement statement showing John Martin authorizing payment of $2.525 million dollars

Appraisal Showing the Fair Market Value Was Only $1.095 Million

Full Appraisal Showing How the Valuation Was Reached

Contract to Buy Worrell/Durrett Building for $2.525 million

Dossier on the Worrell/Durrett Acquisition 

But if only John Martin overpaid for one building. The fact is that the county’s purchase of the Worrell/Durrett Building caused the county’s later purchases of downtown Glenwood Springs property to be more expensive than market value as well.

John Martin wanted to purchase the building located at 810 Pitkin Ave as well. Just like with the Worrell/Durrett purchase the county got an appraisal and that appraisal valued the building at $600,000. The building’s ownership group, however, retained prominent Republican attorney Scott Balcomb to fight for a higher price. Mr. Balcomb obtained a second appraisal that valued the building at $1,010,000. Why the difference? Just look at the appraisals and you’ll find out.

The first appraisal, linked here, does not include the Worrell/Durrett transaction, as it had not yet occurred as of the date of the appraisal. The second appraisal, linked here, however, relies almost entirely on the the valuation given to the Worrell/Durrett building to achieve its price. As a result, instead of paying $600,000 for 810 Pitkin, the county paid $865,000, and you can the contract with that price here. Another $265,000 taken from the taxpayers needlessly because John Martin wants to play property speculator with our money.

The story behind how county got the money for 810 Pitkin also shows the incompetence of John Martin.The county formerly owned about five acres of property that was leased to Valley View Hospital for a term of 99 years so the hospital could be built. Ever since then, Valley View Hospital has wanted to own the property outright so it could more easily issue bonds secured by the hospital and property as collateral.

Over a decade ago, Valley View Hospital bought an office building across the street from the courthouse, the Petrie Building, with an eye to trade this property to the county for the land underneath the hospital. In the meantime, Valley View Hospital leased the building to a couple of law firms and a locksmith.

For about decade that was it, Valley View Hospital was a downtown Glenwood Springs landlord while it waited for the county to act. Only in 2012, after Commissioner John Martin took personal control over county land acquisitions, did the county decide to swap properties with Valley View Hospital, getting the Petrie Building (appraised at $1,815,000 in 2008), and roughly a million dollars in cash in consideration.  There were two main problems with this transaction.

First, the county failed to get a proper appraisal of it property underneath Valley View Hospital before agreeing to the swap. See the appraisal here. This appraisal valued the property at $4.406 million but assumed that the property was unencumbered by leasehold and was a vacant lot. So this appraisal was essentially worthless as to determining reasonable terms for the land swap and stale by the time of the swap. Instead of obtaining an appraisal that considered the leasehold and the value of the reversionary interest, John Martin negotiated the terms of the land swap from the hip. The county did not bother with obtaining an accurate appraisal for its own property before it traded it away. This was a breach of the fiduciary duty the County Commissioners owe the people of Garfield County to knowledgeably use county resources.

Second, the county had no plan for the Petrie Building other than being a landlord. Upon consummation of the swap, the existing tenants were on month-to-month leases and the county could have had immediate use of the building. The county instead decided to sign leases with the existing tenants and the inherited tenants are still there.

See the documents proving this here:

Petrie Building Appraisal

County Land Under Valley View Appraisal

Real Estate Transfer Agreement Between County and Valley View

County Lease Index As Of 01-08-2015