The property was not appraised before the sale.
By TIM YOVICH
VINDICATOR TRUMBULL STAFF
GIRARD -- The appraised value of Girard Lakes is about 25 percent of what the city will have paid for the property.
The appraisal conducted by James E. Lignelli of Diversified Evaluation Co. of Pittsburgh places the market value at $1.25 million.
The city bought the lakes and the immediate property around them in mid-1995 from Ohio Consumer Water Co. for $2.51 million.
City Auditor Sam Zirafi said that when the $2.51 million loan is repaid in 12 years, the city will have paid $4.7 million for the lakes. The city can't pay off the loan early to reduce the finance costs.
The city administration and council bought the lakes as a potential water source.
Since then, the move has become a political and economic football being cited by the state auditor's office as one of the reasons the city was placed in fiscal emergency in 2001.
Lignelli said Wednesday that he didn't include the aged concrete dam the city owns as a liability in appraising the property.
The property was never appraised before it was bought.
Lignelli explained he was told by Mayor James J. Melfi not to factor in the dam because a grant will be available eventually to repair it.
Estimates have shown that it will cost $10 million to $12 million to replace the dam.
Lignelli said that if the dam liability was included in the appraisal, the property would be "potentially worthless."
"The property could be worth zero," he asserted, pointed out that land doesn't have minus value.
Melfi said he is "very upset" that city residents have had to shoulder the property's financial burden.
"The big dream of a water treatment plant by previous administrations has put this city's back against the wall the past three years," Melfi said.
"During these tough economic times, we should be reducing costs and passing that savings to our residents," he added.
Melfi is seeking re-election to a second four-year term. Among his three challengers is former Mayor Vincent Schuyler. Schuyler's administration pushed for the purchase of the property.
In a letter to The Vindicator, Schuyler wrote that the city did not go into fiscal emergency because of the lake property purchase.
He said water revenues, not the general fund, have been used to pay for the property.
Schuyler pointed out that the lakes could not have been bought without the approval of council.
Sell for development
He explained that the city could sell the lake property for a profit. There are 1,600 half-acre lots that can be sold for $45,000 each.
In his appraisal, Lignelli said the best use of the land would be a planned unit development. It should include, he wrote, a single-family subdivision with some land dedicated for a retirement community for the growing elderly population.
It should take 18 months to two years to secure a buyer, he added.