OSU’s Bend Campus Purchased from Bend Docs, Hospital for 22% Higher than Appraisal
A recent land deal for St. Charles Medical Center and a group of Bend physicians may have been sweeter than first reported.
Not only did their investment group, Cascade Property Holdings, sell the land for the new Oregon State University campus at a $3 million profit -- they sold the 10-acre parcel for 22 percent more than the appraised value.
The sellers walked away with $890,000 more than the appraised value of $4,090,000. That price tag was just under the $5 million cap which would have required prior approval of the State Board of Education.
Kirk Schueler, a university trustee and former St. Charles executive who served as an officer for Cascade Property Holdings, conceded that his group was able to sell the property higher than the appraised price when he spoke to The Lund Report.
As a longtime Bend real estate developer, Schueler had served on a special OSU committee tasked with exploring land for a new four-year college in central Oregon. He also told The Lund Report he resigned from that committee once they began considering the Cascade Property group’s site. He recused himself from the Oregon University System vote that approved the purchase.
Oregon State has justified the higher offer by noting that the appraisal was made in 2011, when the real estate market was more depressed. The new, nearly $5 million offer that OSU agreed to was made based on comparable commercial real estate sales in 2012 and 2013 of $11/square foot, according to a September 2013 report before the Oregon State Board of Higher Education:
“OSU-Cascades is requesting approval to purchase this parcel (along with the other parcel) at a purchase price higher than appraised value as this site represents the only 45-66-acre contiguous site on the west side of Bend. OSU-Cascades has unique needs to ensure the future success of the four-year campus that aren’t reflected in a traditional appraised value. The real estate market in Bend is also on an upswing, meaning that comparator sales in the appraisal are from a time when property values were severely depressed.”
OSU-Cascades spokeswoman Christine Coffin said the new price was negotiated between Oregon State and Cascade Property Holdings.
The university hopes to join the 10-acre parcel with an adjacent 46-acre pumice mine that will need significant mediation to make it suitable for a college campus. The price of the larger parcel with the mine is $7.9 million, but the university is holding off a purchase until a more thorough environmental review can be completed. A preliminary estimate put the cost at cleaning up the mine at $4 million to $7 million, depending partly on how much of the landscape is overhauled.
The 46-acre plot was actually appraised at $10.4 million, but that appraisal assumed that the mine would be cleaned up before the sale.
The pumice mine is owned by 4-R Equipment, a general construction contractor with seven rock quarries in central Oregon.
Just north of the two lots is an 80-acre demolition landfill owned by Deschutes County, where decades of waste have left the site hazardous and prone to fire. The county is currently studying the cost of its clean-up. The campus could potentially more than double in size if this land could be incorporated into the other two parcels.
Chris can be reached at [email protected].