Developer and businessman Mark Brown’s takeover of the company that controls most of the public parking in downtown Charlottesville last August was the sale of the summer, but the saga of the Charlottesville Parking Center acquisition isn’t over. Last week, Brown filed suit against appraiser Ivo Romenesko, who valued one of the company’s key holdings—the land underneath the Water Street parking garage—shortly before Brown bought a controlling share of CPC. Brown is alleging negligence on Romenesko’s part and claiming millions in damages, saying the appraiser violated professional standards and significantly undervalued the property.
CPC, founded in 1959, has a complicated history and structure. The company was controlled for years by bankers Jim Berry and Hovey Dabney until Brown bought it for $13.8 million. Among CPC’s properties are the land under the Water Street garage, which it leases to a condo association that runs the garage; CPC and the City of Charlottesville each own a portion of the parking spaces within the garage. The company also owns the flat surface lot at Water Street and Second Street SE destined to become part of a nine-story mixed-use development that will house the Charlottesville City Market.
Brown’s civil suit, filed in Charlottesville Circuit Court on March 27, takes aim at an appraisal of the Water Street garage land by Romenesko on behalf of CPC on June 1, 2014, two months before the sale to Brown was finalized. The appraisal was mandated by the terms of the lease of the property, which was drawn up in 1991 and calls for the rent to be reset at fair market value after 23 years—and locked in for a decade after that.
Romenesko valued the two-acre parcel, sans structure, at $7.35 million, and concluded the annual rent should be $415,000.
That number, the suit claims, is far too low. Without laying out an argument for why, the suit says fair market rent of the property should be closer to $1 million, and says Romenesko and his company, Charlottesville-based Appraisal Group, Inc., “employed inferior appraisal techniques, violated professional standards governing real property appraisals, and deviated from past applications of superior techniques involving the Property.”
Brown, who declined to comment, is suing for breach of contract, gross negligence and vicarious liability, and seeking $4.25 million in damages.
Romenesko founded Appraisal Group, Inc. in 1979. The statement of qualifications attached to the challenged appraisal says he has valued property for dozens of local and national firms as well as UVA, Albemarle County, the Charlottesville Redevelopment and Housing Authority, the Virginia Department of Transportation and many others.
He also played a major role in another local court battle over land valuation. Romenesko was responsible for one of several appraisals at the center of a long legal fight over Biscuit Run, the 1,200-acre parcel bought by developer Hunter Craig and a group of investors in 2009 for $46.2 million—the biggest land deal in county history. Craig and the investors then donated the land to the state in return for tens of millions in tax credits, but later sued, claiming the Department of Taxation had low-balled its estimate. Craig’s appraiser was Romenesko, and the developer won a big victory in 2013, when a county judge sided with Craig and the investors on Biscuit Run’s value.
Romenesko did not return a call for comment by press time.