In many ways the least surprising thing about the latest turn in the EpiCentre saga is that its lenders suddenly realized they were halfway to being the proud owners of Uptown’s very own Eastland.
The project was always built on stilts — even before the 419 condos went poof, leaving nothing but lawsuits, stiffed subcontractors, delinquent taxes, and unfinished construction in its wake. But the Uptown crowd wanted it, oh how they wanted it. Now they need it. How else are they gonna liquor up tour groups at Whisky River before running them through the $200m. NASCAR Hall they built?
To me the really interesting thing is what EpiCentre says about the value of local commercial real estate, and from there, the upcoming property tax revaluation. Everyone was shocked that the value of Eastland plunged to just $2m. from what the city’s experts had pegged at $22m. and then $7.5m. just a few months prior. But that is just a suburban big-box dead mall, 35 years old, at the end of its run. Totally different, right?
Take a look at what we know about EpiCentre.
Recall that Afshin Ghazi was delinquent paying EpiCentre’s 2009 $600K property tax bill — ironic in that Ghazi had no problem cashing checks from local taxpayers. In April, after retaining an Atlanta law firm which specializes in such things, Ghazi won a big reduction in the valuation of EpiCentre. The county cut the value of the property by 26 percent, from $61m. to $45m. In other words, the county says the fully operational EpiCentre is only worth $5.5m. more than the partially complete shell was worth in July 2008. Remember this is a property which carried some $90m. in debt as of May 2008.
Presumably, Ghazi presented the county with persuasive evidence that the property was now worth half that $90m. amount less than two years later. And we can speculate that EpiCentre’s lenders were told the same thing in the run up to the foreclosure filing. Regions, we assume, must have said no to any principal reduction based on the new valuation, opting to go the foreclosure route to save face and buy time if nothing else.
The revaluation alone tells us that the value of commercial real estate — prime Uptown, inside 277, government-advantaged real estate — has fallen at least 25 percent in the past year, perhaps more. Project that drop across the entire county and you get fiscal doomsday for Mecklenburg. Certainly every commercial property owner will be highly motivated not to pay inflated values. In fact, every property owner will be.
Just remember that when you get your new valuation to call up and ask for the Afshin Ghazi 26 percent reduction.
