Zinke: Jim Torgeson’s Letter to the Town Council

After the Town Council released the Dennis Lopez retroactive appraisal report dated January 2011 regarding the February 2009 Zinke land and infrastructure purchases, and the Gary Birnbaum legal analysis dated 10/14/2010, Gilbert resident and local business man Jim Torgeson spoke out at the 1/13/2011 Town Council meeting. He then followed up with two letters to the Mayor and Town Council Members, one dated 1/14/2011, and another dated 1/17/2011. I have provided excerpts from those two letters.

Mr. Torgeson writes:

"Mayor Lewis and Town Council Members:

As I stated at the Council meeting Thursday (1/13/2011), the appraiser specificially cited an appraisal date of February 1, 2008 and specifically cited direction from Jeff Kramer as to that date (pg 67 of audit package). After my commentary, Town Manager Dewitt explained that the appraiser was not told that date and used his "professional discretion." I would like to point out that appraisers always ask a "date of valuation" and that 2/1/2008 was dramatically different than 2009. In fact, properties throughout Arizona were steadfastly declining all of 2008 and reached a freefall pitch after the September, 15 2008 announcement of the bank collapse by then President George W. Bush. Summer of 2008 through early 2009 saw almost no sales activity as most buyers were waiting to find the bottom of the market.

“It appears that three days after Birnbaum’s report, the Town ordered the appraisal. Birnbaum’s letter specifically says appraisals should not be over 90 days old (pg 15). Council asked for a date commensurate with the sale date, not a year earlier.

“Point #1
If the appraiser did pick 2/1/2008 out of his "professional discretion," we must ask for a refund of our monies and report him to the registrar of appraisers for misuse of his "professional discretion" as that date is materially inappropraite for a value comparison and not the date staff says it directed him to use. All dates on the appraisal are from 2005-2007 in a much different market that shares no base with 2009.

“If it is discovered that the date of appraisal was modified by staff, reprimands must be handed out or staff will realize there are no consequences for their actions. I would suggest that the same apply to those who knowingly violated procedures or ignored the misuse of power during the initial purchase as the same holds true; there must be consequences for actions…

“Point #2
In a situation completely void of appropriate comparison sales, it is not unsound logic to use sales that closed subsequent to the date of purchase. Using that method, we can at least feel and understand what sales were most relevant to the real date of sale. It is not sound for how appraisals are generally done, but certainly illuminating when you look at what values were just a few months or year after sale as opposed to 4 years before. In fact, more relevant than 2005 is to after the bank collapse.

South of southwest corner of Ray and McQueen, Chandler
APN 302-73-097… July 2009 18+ acres $127,165/acre

Southwest corner of Germann and Val Vista, Gilbert
APN 304-57-001Q… December 2009 61+ acres $70,261/acre

Northeast corner of Adobe and Val Vista, Mesa
APN 140-204-001A… March 2010 77+ acres $122,265 per acre

North of northwest corner of Cooper and Chandler, Chandler
APN 303-45-002P May 2010, 28+ acres $49,257/acre

Northeast corner of Sossaman and Queen Creek, Queen Creek
APN 304-61-035B June 2010, 31+ acres $54,968/acre

SW corner of Germann and Haas sold for $20,000/acre… not on the county record as of today, but coming
APN 304-62-825

“Point #3
There is no value attached to the lease back of the property. That has an incredible value and further widens the difference between the value paid and true value. It is material because it is part of the purchase. We must also keep in mind that millions of dollars of federal farm subsidies have been paid to Zinke for operating this same farm. He is being subsidized by the $1 leaseback. This makes no fiscal sense as we should be taking that money as the property owners or at least charging that amount in lease if not substantially more.

“This is easily the largest financial debacle this Town has ever experienced and has directly impeded jobs and services. There are absolutely several people at fault with a special focus upon your legal counsel not following protocol on a massive expenditure.

“We have 17 years of paying interest ahead of us, 17 years of gaining no value by a $1/year lease, the equipment is virtually worthless (appraised as new) and a huge environmental clean up ahead of us at a huge cost.

If this park were ready to play, there would be some positive and at least a hook to hang your hat on, small, but there. In 17 years, I dare say many residents will have died, many will have moved and none of them would gain anything from this.

“We will not be able to recover the losses, but we can save face by showing resolve that Town funds will be respected and that Council is not on a "need to know" basis but rather given all information for transparency and carrying out the will of the people. We cannot allow anyone to make decisions outside of stated procedures, because it diminishes the trust residents have of government and the democratic process.

"You and the Council were elected to carry out the will of the people and staff was hired to support that process, not circumvent it."