There is a historic fire station in downtown Charlotte, North Carolina that the owners wants to tear down and sell the raw land to a developer. It is designated as an historic landmark but the owner has followed the procedures to circumvent the historic designation.

Now here is the interesting part for real estate enthusiasts.

The Historic Landmark Commission’s chairman, Bill Hobbs, said his group stands by its current offer, which he said is based on a recent appraisal. The commission uses public money in a revolving fund to buy historic properties, which they then try to resell with preservation convents to protect the buildings’ futures.

“It would be a reckless use of public funds to use the revolving fund to acquire this property at the inflated price that Mr. Stark needs for a bailout of his investment position, given the current real estate market,” Hobbs said. “I think it would be a tragedy for the city of Charlotte if Mr. Stark chooses to tear it down. It’s a real treasure.” via the Charlotte Observer

The preservation group feels they made a worthy offer for the value of the building. Yet the owner knows that the actual value of the land is greater than the value of the building. And there is an overriding rule in effect for the deal.

The owner of the land only has to sell it at a price he or she is comfortable with.

The preservationists are failing to recognize that the land is more valuable without the building, but all they can see is the value of the building.

Instead of preserving the historic fire station that is their goal, they are low-balling the owner of the property by their failure to understand the raw land is what has the value. The building is lowering the value of the land by the historic designation.

Think of it this way. Big powerful developer in town is not going to take on the wrath of the community by destroying a landmark building to buy it at 1 million dollars. Instead they let another small businessman to tear it down and then buy it for 1.5 million dollars. They know that the cost to their reputation would be more than the 500,000 dollar difference in price they are paying. By allowing the small business person to take the public relations hit they are spared the bad press. In the end, everyone wins.

Except the community because the preservationists FAILURE to understand basic business…

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