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Sunday, May 1, 2016

County agrees to buy apartment buildings

Tuesday, January 24, 2012

The two apartment houses at 520 Norris Avenue in McCook, Nebraska, will become county property when Red Willow County commissioners sign purchase agreements Monday, Jan. 30. The county already owns the stucco house in the foreground and the brick garage and lot upon which it sits in the background.
(Connie Jo Discoe/McCook Daily Gazette)
McCOOK, Nebraska -- Red Willow County, Nebraska, commissioners agreed Monday afternoon to pay Greg and Janet Hepp of McCook $160,000 for two apartment houses north of the courthouse in McCook.

The purchase means the county will own all the land between the courthouse and West F on the west side of Norris Avenue. It's a possible location for a county jail.

Commissioners came out of a closed session with Greg Hepp to approve the purchase of the property. Money for the purchase will come from the jail sinking fund.

The purchase price represents the value of the property and rental income for 20 years, commission chairman Earl McNutt said this morning.

The two two-story houses, both built in 1907 according to the county assessor's records, have seven apartments.

The Hepps bought the properties in 2005 for $55,000. Its tax valuation for 2011 is $70,200.

McNutt said that commissioners will meet Monday -- they don't usually on the fifth Monday of a month -- to discuss tenants and leases, and to sign a purchase contracts.

The meeting begins at 9 a.m., in the commissioners' room on the third floor of the courthouse.

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When are the people of this county and city going to rise up and do what is necessary to stop these idiots. More housing will be destroyed but they don't care about the people. The survey overwhelming said the people wanted the county to use the McCook Jail instead of building a new one but the commissioners don't represent the people they are suppose to represent. Even though I don't always agree with the occupy movement, this bunch here is one of the reasons they are able to have any support. I wish a bunch of them would come in here and occupy the houses and yards of these idots that are not representing us.

-- Posted by geewhiz on Tue, Jan 24, 2012, at 4:28 PM

A good move to quit throwing millions of Red Willow County taxpayer dollars over the years to other surrounding countys to house our prisoners at Hilton Hotel rates. Glad to see finally some commissioners with some forsight and guts to do the right thing for local taxpayers.. Now just get jail built you dont need a vote just do it like most other cities and countys do in the state .. Regardless at 3% interest or less for 20 year bonds its time to rebuild or replace vs what we have done throwing rent money away for years and still have nothing to show for it.. A few new jobs will be created with local jail and help local jobs seekers..

-- Posted by Cornwhisperer on Tue, Jan 24, 2012, at 5:38 PM

Let me see if I understand this, the tax valuation for 2011 is $70,200 and the county paid $160,000! That's over 100% of the valuation! How in the heck can the county justify that??????? And to top it off the Hepp's only paid $55,000 back in 2005! Does ANYONE see any problem with this? I'm sure the Hepp's laughed all the way to the bank! This is what is wrong with our current commissioners and quite frankly our city, state and federal governments!

-- Posted by remington81 on Thu, Jan 26, 2012, at 10:05 AM

It was for the property valuation PLUS 20 years worth income created by the rent projection.

That actual property value is increased due to the nature of the investment value which is derived from projected rental income.

If someone buys an apartment building, car-wash or commercial rental property, they're actually paying not only for the real property but speculation of income that they will receive from that property.

2 things:

1st, Why 20 years? Perhaps it is a standard time frame,

2nd, the county purchased only the real property, not an investment property or Speculation Property.

That being said, although the county isn't using the structure itself, it will be using the land (lot) that it's on as a business venture, not exactly as a money maker so much as a money saver.

I don't oppose the jail, but I still wonder if the county shouldn't have put it to vote as it was the way the country was designed: "Of the People, by the People, For the People". An open an honest set of facts representing the county's income & expenses regarding the existing jail situation, vs. the projected income & expenses of a new jail.

It should really be easy to see if this is worthwhile. Its much like deciding whether one should purchase an electric car or not. Sure, you save $ on fuel, but is the astronomical purchase price truly going to offset each other to the extent of being a sound investment.

The true complexity however depends entirely on how honest and open the facts can be. That will probably never be possible.

And so.... A public vote will be based on publicized factpinions, a word I'll coin meaning opinions represented as facts. Those that weigh heavily on their own factpinion that its a waste of $ will vote against, those with factpinions that it will save $ and create jobs will vote for. My factpionion is that it will be a good thing, as the longer the facility is used, the less it will cost the taxpayers and the more control our county will have over expenses. This is entirely based on logic and bits of information from here or there. Information by the way, that I received from others with factpinions. Still..... Its the American way! Let the people vote!

I said it before.... If I were a commissioner, I would want to make sure my decisions of how to spend taxpayer's money was based on popular majority.

-- Posted by Nick Mercy on Thu, Jan 26, 2012, at 7:13 PM

This empire-building group of power-hungry individuals doesn't care what the public thinks, Nick. One can present facts to this group until s/he is blue in the face and still they will do as they please...and then write a law to prevent that individual from interfering with their omnipotency ever again. The public needs to get their blinders off and remove these grandstanders who are going to ramrod a useless debt down the throats of the taxpayers without even asking.

-- Posted by speak-e-z on Fri, Jan 27, 2012, at 9:40 AM

Nick, I understand the 20 years of income the property MAY have generated. But as a business owner I know the first 20 years of income and possibly more would have went back into the property (loan payment, taxes, up keep ext). There is not a bank around that would have loaned a normal person that kind of money on projected income down the road. My case in point is the original price paid by the Hepp's which did not include any future generated income.

-- Posted by remington81 on Fri, Jan 27, 2012, at 12:46 PM

That's a good point remington. The Hepp's purchase price would have included that as well unless they made an arrangement with the prior owner for projected profit.

I know that hotels, and carwashes aren't purchased by a mere land and structure valuation, it's projected out with income generated as speculation. Banks DO actually factor that into the loan process but again, that would have been, or should have been reflected in the Hepp's purchase price.

-- Posted by Nick Mercy on Fri, Jan 27, 2012, at 1:11 PM

Another thing to remember for most places is that Tax valuations and Market value are two different things.

Actually the peak of the real estate market for most of the country was between 2005 and 2007. It wouldn't surprise if the Hepps sold it today under regular conditions that they would have gotten less than 55,000.

-- Posted by npwinder on Fri, Jan 27, 2012, at 5:39 PM

I won't comment on the purchase price as it has already been discussed, but one thing confuses me. The taxes on this poperties have went from $1800.00 in 2007 to 1368.00 in 2011. Please tell me how this happens, as I would like to apply it to my property.

-- Posted by Pigman1 on Sat, Jan 28, 2012, at 12:49 PM

Lower tax valuation either by the county reevaluating it as they occasionally do or by the Hepps challenging the valuation and winning.

Looking around http://www.nebraskataxesonline.us/search... it would appear that overall most of the valuations went down from 2007-2011.

I also believe (don't take my word for it though) that in Nebraska, the counties have to asses values close to market value. Prices started to fall after 2007

-- Posted by npwinder on Sat, Jan 28, 2012, at 10:57 PM

This property's tax valuation was $89,398 in 2005,2006,2007 and 2008. In 2009 it was reduced to $70,200. This property's tax valuation was reduced 22%. My property's tax valuation remained the same during those years. I had to fight to get a metal building reduced, as it was valued at twice my actual cost. If your reasoning is correct, my property should be valued at 22% less than it was in 2008. I'll challenge my tax valuation again and report back with the results. I doubt it will be reduced anywhere near 22%.

-- Posted by Pigman1 on Sun, Jan 29, 2012, at 12:00 PM

You still need to compares apples to apples and oranges to oranges. Just because the value of the apartment complex decreased 22% does not mean the value of a single family home decreased 22%.

There's going to be more demand for a single family home than an apartment complex so the value probably wont drop as much on a home before a buyer comes in.

You also have to look at the homes similar to yours in the nearby area.

-- Posted by npwinder on Sun, Jan 29, 2012, at 1:46 PM

I compared three other apartment complexes in the area of Norris Park. The largest decrease in value was 10%. Houses in my area stayed the same or went up due to land price increases and no sign of any reduction in value. With the limited amount of rentals in this area, I'd think an apartment house would hold it's value. I haven't seen any tremendous boost in house prices.

-- Posted by Pigman1 on Sun, Jan 29, 2012, at 5:31 PM

What are the closed sale prices? How do the other Apartments compare as size, number of units, amount of land? Had any improvements been done to any of the units?

Are there any apartment complexes currently for sale? If so, how long have the been on the market?

Is it possible the the Hepp's apartment complex was grossly overvalued and that's the reason for the big drop? How do the dollar value valuations compare across the board?

-- Posted by npwinder on Sun, Jan 29, 2012, at 7:01 PM

If you look at the article here http://www.mccookgazette.com/story/18101...

It says the Complex appraised at 90,000 using the sales approach and 110,000 using the income approach.

-- Posted by npwinder on Mon, Jan 30, 2012, at 5:50 PM

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