The Feoffees of Ipswich (Mass.) are still considering selling Little Neck!

Little Neck appraisal should be released - Ipswich, MA - Ipswich Chronicle.

Remarkably, the Feoffees (trustees) for the 360 year old trust created for the benefit of the public schools of Ipswich by a forward-thinking and public-spirited landholder when he donated to his community – forever – a beautiful 32-acre almost-island in trust. The conditions included the provisions that (1) the Feoffees should collect market-level rents and (2) that the land could never be sold. Little Neck has 167 lots, and the tenants own their cottages, the majority of which are 70 to 90 years old and under 1000 square feet, on lots of 3000 to 5000 square feet. The tenants pay land rent to the Feoffees, which is supposed to be paid to the schools of Ipswich.

Well, the Feoffees have failed to collect market rents, and the tenants seem to think that that might be sufficient reason for them to be able to buy the land – and at a very moderate price!

After the jump, you can read three recent articles, and the comments to date.

As you read this, remember that about 1/4 of the Little Neck tenants are also year-round residents of inland Ipswich, and are likely well-known to the Feoffees. This may tend to create some conflicts of interest between the Feoffees’ role as trustees of this property for the benefit of the public school system – forever – and their role as good neighbors to some of Ipswich’s long-time residents.

Click on the “Feoffees’ land” link at left to read all the posts on this topic; I’ve been intrigued with this story since I first read about it in 2008.

The newest appraisal is 50% higher than the previous one – but still only about half of what I estimate Little Neck’s land to be worth.

First article:

http://www.wickedlocal.com/ipswich/newsnow/x827973272/Little-Neck-appraisal-should-be-released

Little Neck appraisal should be released

GateHouse News Service Posted Sep 14, 2010 @ 07:26 PM

Ipswich —

Sometime, someone is going to have to say what Little Neck is worth — someone other than the Feoffees and the Little Neck tenant’s association who value the land at $29 million.

The FinCom commissioned an independent appraisal of the same land, but that value has been locked behind the closed doors of executive session for most of the summer.

Apparently, letting Ipswich taxpayers know how much their land is worth via an independent appraisal would disrupt negotiations over the sale of the Little Neck land trust to the Little Neck tenants.

The tenants now rent the land from the Feoffees, but own their buildings.

The Feoffees oversee the Little Neck land trust to benefit the Ipswich Public Schools, but haven’t paid anything to support the schools for several years.

The Feoffees hope to sell the land for $29 million to a Little Neck condo association made up mostly of current tenants.

The terms of the trust forbid the sale of the land and the School Committee and the Feoffees are fighting over the sale in court.

“I’m not able to reveal the outcome of the most recent appraisal (done for the Finance Committee). The proposed sale to the tenants is for $29 million. The Feoffees’ Attorney Bill Sheehan has alleged that is supported by an appraisal,” said FinCom member Michael Schaaf.

“The School Committee can’t comment further because it does affect our negotiating position,” School Committee Chairman Hugh O’Flynn said.

Translation: The independent appraisal is so much higher than the Feoffee’s sale price that if the public found out, there would be riots on Market Street — or people would at least speak angrily over coffee at Zumi’s and Marty’s Donuts.

In all likelihood, town officials fear revealing the independent appraisal would inflame public opinion and derail any hope of a settlement.

To which we say: Good.

If the Feoffees valuation is so far off from the independent appraisal, any deal should be derailed and fast.

Schaaf said a third appraisal might be needed. That is probably the best route to take at this point. Most accurate appraisals require three estimates. If the FinCom goes forward with another appraisal, another appraiser, independent of the Feoffees, should perform the work.

If the second, independent appraisal comes in much higher than the $29 million, as the first independent appraisal appears to have done, the FinCom, the School Committee and the Board of Selectmen will have firmer ground to stand on.

But, at some point in this process, the FinCom must release the independent appraisals to the public — and long before any possible deal between the town and the Feoffees may be reached over the proposed Little Neck sale.

The taxpayers have a right to know what their land is worth.

Loading commenting interface…

and the second article:

http://www.wickedlocal.com/ipswich/news/x995825512/Little-Neck-appraisal-remains-secret

Little Neck appraisal remains secret

By Jane Dooley,GateHouse News Service | Posted Sep 17, 2010 @ 06:00 PM

Ipswich —

Town officials have yet to release what an independent appraisal says Little Neck is worth, nor has consensus been reached on the value.

The Feoffees, the board of trustees that oversees the Little Neck land trust, places the value at $29 million.

The independent appraisal has been kept behind closed, executive-session doors for much of the summer.

The Board of Selectmen, the FinCom and the School Committees have been meeting in executive sessions all summer long to discuss a proposed settlement between the Feoffees and Little Neck tenant association to sell Little Neck and convert the cottages to condominiums.

Due to disagreement about the results of the Ipswich Finance Committee’s consultant appraisal compared to the value of Little Neck determined by the Feoffees officials are discussing the possibility of doing another appraisal.

An executive session was held last week with the Ipswich School Committee and Feoffees to discuss the Little Neck proposal.

FinCom member Michael Schaaf was unable to attend last week’s meeting since he was notified one-hour before it occurred. The Feoffees are responsible for posting their own meetings, he said.

The Little Neck property appraisal “is still in discussion relative to the negotiation with the School Committee and the Feoffees. Appraising is both a science and an art. Some folks have said indeed that perhaps another appraisal would be useful,” said Schaaf.

The centuries old trust with the Feoffees of the Grammar School forbids sale of the land and the School Committee has filed litigation opposing the sale of Little Neck in probate court, which needs to approve changes in the will for the Little Neck sale to go forward.

A review of the Finance Committee’s appraisal was paid for by the School Committee to make sure it was sound and that hasn’t been released, said Ed Traverso, School Committee member.

“I can’t understand how a decision of this magnitude involving so much resource can be made by just the School Committee and the Feoffees without involving the whole town. I think the final decision on the sale, the price and everything else, ought to be handled through the Town Meeting. It is that important. It is at least a $29 million and might be as much as a $40 million asset,” said Traverso.

The recent meeting between the School Committee and Feoffees was considered “a reasonably productive, friendly meeting with the full contingent of Feoffees, including Selectmen Feoffees, except for lifetime Feoffee Jimmy Foley,” said School Committee Chairman Hugh O’Flynn. “It was nice to get face-to-face with the actual Feoffees not just their lawyer. We didn’t discuss the Feoffees governance.”

In regard to the Finance Committee’s decision not to release its appraisal of Little Neck to the public, “The School Committee can’t comment further because it does affect our negotiating position,” O’Flynn said.

“The public and others are very interested in this matter that is why we have tried to position the School Committee and the Town most effectively to maximize the price in the interest of the school children. We are sympathetic to public knowledge of this information, but also know negotiations can be delicate. It has been determined that temporarily the negotiations could be affected adversely by releasing the Finance Committee’s appraisal,” said Schaaf.

“I can’t give you a timeframe, but everyone involved is aware of and sympathetic to the public having complete transparency about this. Part of the problem in my judgment with the Feoffees is their absence of transparency for years,” said Schaaf.

Although attendees at the recent executive session gained a clearer understanding of positions by both parties no conclusions resulted.

“This is a matter of active negotiation. I can’t see it trudging along for months without a tangible change. I can’t predict resolution since it could get complicated legally. We are working on this hard as three independent bodies, the Selectmen, Finance Committee and School Committee, striving to achieve unity in the negotiation,” said Schaaf.

Loading commenting interface…

Comments (1)

Thank you for the abuse report. We will review the report and take appropriate action.

Loading comments…

LVTfan

The individual citizens of Ipswich ought to be demanding to understand the methodology and assumptions by which each appraiser reached his valuation, and included in the package ought to be a list of the instructions given to the appraiser.

That information ought to be made public, in time for experts to evaluate the assumptions.

Just like the Congressional Budget Office can provide some very rosy outcomes by sticking to the assumptions that the requesting legislator provides, they don’t mean much if the assumptions themselves are crazy!

And I hope that each appraiser will disclose their affiliations and relationships with any LN tenants.

Anyone who has been executor for an estate knows that appraisers will provide a very different kind of appraisal for that purpose from what they might provide to a purchaser or to a lender.

I still can’t see why anyone thinks that the Feoffees should even entertain an offer, based on the terms of the trust they were ENTRUSTED to carry out, but that is a separate discussion. They still must recognize who the beneficiaries are, and whose interests they must hold foremost.

and now a third, reporting the new appraisal:

http://www.wickedlocal.com/ipswich/news/x1685474072/Ipswich-FinCom-releases-private-Little-Neck-appraisal

Ipswich FinCom releases private Little Neck appraisal

By Dan Mac Alpine

GateHouse News Service

Posted Sep 20, 2010 @ 05:33 PM

Last update Sep 21, 2010 @ 11:57 AM

Ipswich —

A private appraisal the Ipswich Finance Committee commissioned values the 35-acre drumlin at $42.5 million.

The current tenants of Little Neck and the Feoffees have reached an agreement to sell the land to a tennant’s condominium association for $29.5 million.

Little Neck is a land trust charged with providing revenue to support the Ipswich schools, which the Feoffees of the Grammar School administer under a 1650 will.

The Feoffees have paid nothing to the schools for several years.

The Feoffees hope to sell the land to the current Little Neck tenants, who own their cottages but rent the land from the Feoffees.

The School Committee is fighting the sale in probate court because the original will stipulates the land will never be sold.

The Chronicle will update this story.

Loading commenting interface…

Comments (12)

Thank you for the abuse report. We will review the report and take appropriate action.

Loading comments…

TickedTaxPayer 2 days ago

A trust is a trust is a trust. This is land is not to be sold. And why, if the value is 42.5 million is it being considered to be sold for 29.5? Yet again the school will be ripped off.

salifdiallo 2 days ago

nothing has been agreed to…and LN is better than Nantucket, humm…you should get out more…ITS NOT THE SAME…it’s the same as Great Neck…and the lots there sell for $500,000 and are 4 times the size! Let’s say it’s twice as good as GN, then the land is worth twice as much…so, a lot the same size on LN should sell for $500,000/2 which is $250,000. How can you argue that that is not fair? That a lot on LN cost twice that of a lot on GN of the same size which would be $250,000? You are the greedy people, and you never answered the other question about the land up town?

I posted that four days ago and LTVfan doesn’t agree and said that the reason they didn’t release the amount was because it was such a high valued assessment and then threw a lot of numbers around…well I guess he was/is wrong. It seems to equal about $250,000 per 167 lots and the common land split between those lots or $41,750,000… Yet LVTfan says/will say it’s worth $83 million and that the assessment is wrong even though he is the ONLY one who places that value on it…not the town not all the appraisals just him…maybe you should check your facts and your mouth before you speak…you obviously do not understand real estate only accounting tricks…

FinallyTruth 2 days ago

Finally, Truth is coming Out! The close ties between the people who have tried to lock the Ipswich Children out of the Trust will be the next stunning description presented in the News. So many of us have been badly hurt by this for many years. On the one hand, the public gets told to ‘Stand Up’, make the issue known to all and in the press. On the other hand, when I tried to do that, I was put in shackles, placed in a choke hold by one of the present Trustees when he was assisting the former police chief (now on the selectboard), fictitious charges were placed against me, wrecking my professional reputation, and costing me a small fortune to fight in court, with No Show plaintiffs finally ending up in a dismissal. I am SO HAPPY the TRUTH is COMING OUT. It feels like sunshine!!!!! Shame on those intimately involved, and one of our leading media people!!!!!! Keep up the great work Dan, Jamie and Bill…and Ed!!!!

FinallyTruth 2 days ago

Thank you LVT Fan.! Thank you for taking notice and keeping track intellectually. Your numbers, your math and your investigation were invaluable!

salifdiallo 2 days ago

Finally Truth, are you serious? LVT fan has made mistake after mistake in his math? Why would you commend him? And what does ’lock the Ipswich Children out of the trust’ mean? LN paid every year until we needed to pay for our septic system _which the town didn’t help us with - we had no choice. We had to install the system and there was no money left. The trust says that what ever money is left over is to be given to the schools. No money left means no money to the school. If you want to hate be an equal hater and place some of the blame on the town for not helping us…that was a town vote where LN got ONE vote for 167 houses. That’s fair.

rcg 1 day ago

The Feoffees contributed very little or nothing each year, and then all of a sudden had alot of $ to conribute for a couple of years. Where did that $ suddenly come from? Also, to be fair, the Town of Ipswich is not responsible for the apparent mismanagement of $7,000,000 for the sewer project. That is a Feoffee problem.

salifdiallo 1 day ago

That is true that the town is not responsible for the mismanagement of the sewer project but how are the people on the LN supposed to feel when they are told they ARE NOT part of the town and that the town WILL NOT help with the sewer and then the towns people turn around and say that the people on LN don’t care about the trust and the schools and the kids…the town left us out to dry when the EPA/Gov told us we needed and sewer system and the town would not run a line out here…how would you feel if you lived up town and the town would not plow your street? Give you a sewer line? Let your kids go to school in town? That’s what Ipswich says to LN. That is why there is no money to give…and now it’s the lawyers…

BrokenAnkle 1 day ago

‘LN paid every year until we needed to pay for our septic system _which the town didn’t help us with - we had no choice. We had to install the system and there was no money left’

You used to have your own septic systems out there, so you’ve got a pair of brass ones to think that the town should have helped you with it. Join the club – pay for your own septic. Look – everyone who connects to the municipal sewer pays their share of an extension by way of a betterment. ‘The town’ doesn’t pay for anyone. And some of the betterments have been very high.

Then ask some of the folks on GN who’ve paid $50-60,000 for a new septic system about your common system that came in at about, what, $37,000/lot. Now, if you hadn’t asked the feoffees to build the common system, each cottage owner would have been required to put in his own tight tank for about $20,000. And, by the way, how do you think you would have liked a couple of pump trucks on your block every couple of days all summer as various owners had their fluids and sludge pumped?

DEP required the work under the Clean Waters Act. Hurrah, for the Ipswich River! My memory is that the owners wanted a common system … and asked the feoffees to spend a lot of extra money to run a connection under the marsh to the municipal sewer and when that didn’t work out because it was too expensive, you pushed to get the pump station outside the gate but that didn’t work out either because of the conservation commission or the state. Those attempts cost you time and the state deadline was approaching, so guess what – the contractors hosed the feoffees. Well, you got what you asked for … so pay for it.

salifdiallo 1 day ago

really, you had to pay for the sewer line to your house? you are so full of $^%# and yes there is no money left now so like you said ‘you got what you asked for’…the trust says ‘what ever money is left over will be donated to the schools’ well, there is nothing left over…so we are living up to the letter of the trust…what’s your problem? don’t want to pay for your kids education? again, I will quote you ‘so pay for it’.

LVTfan 24 hours ago

FinallyTruth, I’m glad something I wrote was useful to those seeking to protect Ipswich’s future. I hope that the logic of what I’ve been laying out reaches the attention of those making decisions on this.

And obviously I hope that today’s decision-makers are not acting only in the interests of today’s generation or putting the interests of the tenants above those of the trust’s beneficiaries.

Little Neck’s specialness belongs to Ipswich’s children of the future, most particularly including those who will never set foot on it because they aren’t in the tenants’ circle of acquaintances and guests.

salifdiallo 6 hours ago

um, that’s not fair….loads of people who do not live on LN walk, bike, go to the beach, use the dock and drive around there all the time…could I do that at your house? Could I park in your drive way? lay-out on your lawn? I doubt it….so stop acting like you are some kind of saint and that the people at LN are snobs. what a joke this guy is…LVTfan didn’t even mention that his estimate is twice that of every other assessment of the value…why are you so quiet on that now? Useful, more like useless…

LVTfan 3 hours ago

Salifdiallo, I was assuming that the ’no trespassing’ ’tenants and guests only’ signs at the entrance to LN were enforced. I guess I might be wrong about that. Sorry.

Regarding the value of the land at Little Neck, I think I am closer to the reality than are the valuations I’ve seen from others.

I laid out the logic by which I arrived at my estimates of the aggregate value of the land.

I have yet to see the assumptions and instructions by which any other appraisals were arrived at.

I hope that Ipswich’s taxpayers will demand to know what underlies each appraisal, and consider whether the approach I laid out sounds logical, or whether they feel that the land is fairly valued and the rent fairly set when $75,000 cottages are selling for 2 or 3 or more times that value.

Until you ask the right questions, you seldom get right answers! And many requests for appraisals do not ask the right questions, for a variety of reasons.

I’ve done my best to lay out what I believe to be a sound methodology. See also http://lvtfan.typepad.com/lvtfans_blog/feoffees-land/ for more discussion.

The land is worth more than the $42.5 million appraisal, but $42.5 million is definitely a step in the right direction. And keep in mind that the $42.5 million is (I assume) summer 2010, after a significant ‘dip’ in the year-round housing market; the $29 million figure is from a few years ago. And the $29 million figure is roughly consistent with the current land rent figure, which, as I’ve repeatedly said, is not enough to bring the asking prices on $75,000 cottages to $75,000.

The math: quick and dirty –

$29 million, divided by 167 lots is $173,652 per lot on average.

$173,652 divided by 20 (‘20 year’s purchase’ or capitalized at 5%) is $8,683 per lot per year in land rent, which is less than the Feoffees are currently charging. So this valuation is below the valuation the current rents would suggest.

And the fact that at the current rents, $75,000 cottages carry asking prices of 2, 3, 4 (or more) times $75,000 means that a huge share of the land rent is NOT being collected at the current annual rent levels.

Just collect the rent. Pay the costs of maintaining LN, accrue something for future needs, and pay the rest to the beneficiaries. Repeat annually. Forever!

This blog has more observations and history on this story. See them collected at http://lvtfan.typepad.com/lvtfans_blog/feoffees-land/.