Tim Olsen on Generating Cash from the Doyle Administration Land/Building

Tim Olsen’s email to Madison Board of Education Member Ruth Robarts:

And below are the specifics you requested re calculating an estimated value for the Doyle site. You are welcome to share this email with anyone interested. And thanks for the opportunity to speak to the Board, for your comments, and for including Lucy Mathiak’s blog-article. Someone told me about her article and I’m happy to receive a copy.

My estimate of the value of the Doyle Building is straightforward and based on current City assessments of the Doyle property and of Howard Johnsons just across the street. This public information is freely available via the City of Madison Assessor’s site. Similar calculations can be made by anyone. The Excel spreadsheet I used (complete with embedded formulas) is attached as an example. Here’s how anyone can make their own calculations:

  1. Go to the Assessor’s site.
  2. Since the phone book etc. will show that the Doyle property is at 545 W. Dayton, you can “Query by Address
  3. Fill in 545, then W, then Dayton in the form and submit.
  4. Click on the parcel number and you will then be shown the Assessor’s records for the District’s parcel.
  5. You can do the same for the Howard Johnson property and compare the two. The Howard Johnson Motor Lodge street address is 525 W. Johnson and the back of the hotel is across the street from the front of the Doyle property (originally called Washington School when it was built).
  6. The key calculation (per the attached spreadsheet [.xls file]) is figuring out the assessed value of Howard Johnson LAND (not including the “Improvements” i.e. building and parking lot etc) PER SQUARE FOOT. For HoJo’s the calculation is $4,237,000 divided by 70,611 sq. feet in the parcel = $60 per square foot.
  7. Then, to calculate an estimate for the Doyle property land value (ignoring the building value), simply multiply $60/sq.ft. * 115, 927 sq. ft. = $6,955,620.
  8. Since the Doyle property is adjacent to the Kohl Center, and generally parcels in Madison sell for substantially more than assessed value, I’m guessing it’s actually worth a lot more than $7 million.

    To sell, lease or develop the Doyle property, the zoning classification would have to be changed, which is not a trivial matter. But just as Ms. Mathiak points out with regard to City Landmarks, such obstacles have been overcome for good reasons many times in City history. The Hilton Hotel that was developed on Catholic Church property is a related example. It is quite unlikely that the Doyle property would ever qualify as a National Register of Historic Places landmark in my opinion but I’d suggest checking with the State Historical Society for a professional assessment.
    I think it would be great to get selling/leasing/developing the Doyle property formally on the table.
    My personal hunch is that the wisest option would be to develop the site, maintain ownership and lease space so that MMSD could continue to make money on it and maintain options for moving programs or administration in or out as enrollment changes over the decades. (Modeling needs for only the next 5 or 10 years is tremendously short-sighted. Extrapolating trends for such a short time is realistic in that projecting beyond that is highly speculative, but we need to recognize how just how limited our predictive powers are. That’s the way it is.
    But the fact is, that the property will maintain, and likely greatly increase in value for a long time, given its incredibly valuable location. Why sell the cow that will produce for generations?
    But I’m sure that by putting it on the table, and giving it a thorough analysis with expert help would come out with very good, and well-prioritized solutions, that might even disagree my hunch.
    Meanwhile, I understand that the State Cap really puts MMSD in a box. And that 7 million would not pay off $10 million of shortfall each year. Referendums will need to be passed to maintain the same quality of education over the long term. And we can’t wait for a huge change in the attitudes, or representation of legislators required for overturning or modifying the cap(s).
    Nonetheless, taking some initiative with the Doyle site could contribute positively to the district’s inbalance in funding more significantly that reshuffling students among schools or building a new building. So, in sum I agree with you in that “we must take some steps of this kind to improve public confidence and build support for referendums that we will need in the near future.”
    So — keep up the good work Ms. Robarts.
    Tim Olsen
    P.S. I would love to see MMSD Admin LEAD FROM THE FRONT by moving their offices to schools with space and low enrollments. That would be educational for all parties don’t you think?
    P.P.S. A calculation of the value of the Wingra School property on Monroe St. can be made similarly to above. To be more accurate, average the value (land and improvements) per square foot value of all adjacent property around the three sides of the parcel, then multiply the ($ average value/sqft) * (the total square footage of the Wingra School) parcel. My guess is that $750,000 is still way, way less than its market value — beneficial as maintaning its current use/zoning may be to adjacent property owners. A $750,000 sale price to the school subsidizes private education with public property value, while the green space etc. enhances adjacent and nearby property values. I’d vote for leasing the property to Wingra at a realistic rate for a shorter term (not $1 per year). Think that’s a tough approach? Ask Edgewood how much it would cost to lease a similar amount of land and/or facilities from them. That would be the ‘market rate’ for a private school.
    Ms. Robarts, ..just some quick context for my ‘specifics’.. Of course the City Assessor’s Office, any good developer, or certainly a professional appraisor would point out that many more factors merit consideration in making an accurate appraisal. Factors as diverse as proximity to a freeway ramp, brown fields, street congestion, view, whether or not its on a lakeshore and non-linear relationships with parcel size are just a tiny tip of the iceberg. Nonetheless, a quick and fair calculation of the value of the LAND (excluding improvements which is more complicated; e.g. how would maintaining the exterior of a city landmark factor into developing the site) can be reasonably approximated the way I did it.
    And for more context — How do I know?.. some further qualifications:

      dozen years on Tenney-Lapham Neigh. Assoc. Board with 2 as President inc. work on development,

    • building code and parcel assessment issues; most recently on the 800 E. Washington property (Don Miller autos) proposed for development by Gary Gorman (an excellent plan that deserves City support with TIF, in my opinion) –
    • PhD minor in Environmental Monitoring (remote sensing and Geospatial information systems science (as mentioned Monday eve. my PhD major is Curriculum & Instruction from Madison) GIS etc provides sophisticated means to estimate real estate value (along with many other applications).

    I’d be happy to help contact some developers to encourage them to look at the Doyle property. Have a great day

Terry Pristin discusses the University of Washington’s rental income generated by 11 acres of downtown Seattle real estate. A great example of thinking different.