NEW ORLEANS (WVUE) - The value of 3101 Erato St. in Central City is between $809,000 and $290,000, depending on who you ask.
The New Orleans Redevelopment Authority is purchasing the land and the warehouse to build a low-barrier homeless shelter. The shelter will provide assistance to people with disabilities and sobriety issues and work with them to find permanent housing.
NORA's appraisal, performed by Gayle H. Boudousquie, values the property at $690,000. The property owner's appraisal, performed by Murphy Appraisal Services, values it at $809,000.
"Between those two appraisals, we arrived at $750,000, and we think that's fair to citizens," Mayor Mitch Landrieu spokesman Tyronne Walker said.
But as Landrieu's administration backs the $750,000 purchase price, the Orleans Assessor believes that price is too much.
"From my view and from my appraisal staff, the price being paid for this property is well over what the true fair market value of this property is, even despite having two independent appraisals look at it. We can't get to where they are," Assessor Errol Williams said.
The assessor's office recently reviewed the property and valued it at $290,000. Earlier this year, the assessor's staff did set the value at $690,000 but readjusted the price when the property owner disputed that value.
"We had (the building) at a little over 14,000 square foot. When we went and measured, it was 10,000 square foot. So we valued it based on buildings of comparable size," Williams said.
Williams believes the other two appraisals comparable land values may be a reason for the jump in price. In the owner's appraisals, properties on Magazine St., Tchoupitoulas and Poydras were given as examples of comparable land.
"If I put it Uptown on Tchoupitoulas St., I may pay $20-$30 a square foot for the land. If I put it in East New Orleans, it might be $2 a square foot for the land," Williams said. "Here we have $7. The appraisers are saying it's worth $11. It's a difference of opinion."
NORA'S appraisal does select properties closer to the Central City location, but even the values of the other properties fail to line up. A 66,000 square foot property on S. Claiborne is valued at $625,000.
The Erato St. property is three and a half times fewer square feet and being purchased for $750,000.
Also, the Erato St. land is contaminated because it used to be a dump site.
The city has $2 million to build the low-barrier shelter. With cleanup still needed on the land, New Orleans Councilwoman Latoya Cantrell worries the money will be spent before the shelter gets started.
"We know that it will eat up the $2 million, and this is just on acquisition alone. This isn't talking about the full build-out, as well. So the numbers just aren't adding up, and I think it's revealing, over and over again that this is not the best location," Cantrell said.
The councilwoman wants the shelter to go on Perdido St. near the parish prison.
The mayor's office argues the location will send the wrong message to the homeless because its next to the prison.
The mayor's office also claims it would cost $10 million from FEMA to acquire the Perdido St. property.
Cantrell disagrees and said the Perdido St. property is ready to go and could be acquired for next to nothing.
"FEMA has not indicated that the sheriff pay the $10 million market value to keep the building. The sheriff has indicated as well FEMA will not require him to do that. This is an opportunity that we should further explore because it could potentially provide the services that we know we desperately need in this city," Cantrell said.
The mayor's office also says the assessor did not go in the Erato St. property, which is true for the $690,000 assessment.
When parish assessors went back for the readjustment, they did go inside the building.
"We have photographs of the outside and inside, and we still don't see nothing more than a warehouse," Williams said.
At this time, Walker said the mayor's office does not plan to revisit the purchase amount.
"We've done this process right. It's been done by independent appraisers and if there's anything that's presented to us that suggest that for some reason that those things weren't done," Walker said. "We believe that the appraisals have been done right and are giving the citizens a fair market value."
The mayor's office also disputes the $290,000 assessment, saying there were $381,000 in upgrades to the warehouse recently. The assessor said his agents did not see those upgrades nor were the proper permits purchased to make such upgrades on the building.
Since the announcement of the low-barrier shelter site, several community leaders have opposed the move because of the proposed location's proximity to Sylvanie Williams Prep School and the future site of Booker T. Washington High School.