Particulars of WVU, private developer land deal unknown
Developers finalized the purchase of property Thursday in the Sunnyside neighborhood that West Virginia University will use for a student housing and business project.
While the university has authorized up to $15 million in revenue bonds to purchase the land from the developers, at least two former property owners said they could not talk about how much they received for their property.
"We had to sign a confidentiality agreement saying we couldn't discuss any terms of the deal," said Dow Jones, owner of the largest chunk of land involved in the development.
This week the WVU Board of Governors passed a resolution to purchase land for a student housing project. A document submitted last month by the university to the state Legislature references an agreement with Paradigm Development Group and RCL Holdings to purchase 39 parcels in Sunnyside for about $14.5 million.
Tax records show the property included in the deal is appraised at less than $4.5 million.
Jones, who is listed in documentation filed with the secretary of state as the owner of 20 pieces of property involved in the deal, said his portion of the sale would take place at 4 p.m. Thursday.
He said he thinks the amount he received was fair.
"Actually, they came to me and asked what I would sell for. I feel like I got a great deal because I threw a number out there and they accepted it," Jones said.
James Craig co-owns Blue Sky Realty with his son and owned nine pieces of property involved in the deal. Craig said he had sold his property Thursday morning but could not discuss the value of the sale because a confidentiality agreement was a requirement of the contract.
Craig also said he was happy with the terms of his deal. When asked about the disparity between the appraised value and WVU's purchase price, he said he couldn't speculate as to how much money the developers were making in the agreement.
"I don't know if there's any middleman profit to be made here or not," Craig said.
He thought the location of the property made it valuable, likening its proximity to downtown to oceanfront property.
"If you have the house on the ocean, it's worth 10 times more than the house across the street," he said.
Both Jones and Craig said the plan should help create a better atmosphere in Sunnyside, and they were going to re-invest the money made from this deal into other properties in the Sunnyside area. Craig said he was in the process of acquiring housing that he planned to renovate. Jones said the money would let him actually evict tenants who break the terms of their lease.
WVU officials have said more information on the project would be available today but have declined to comment further.
Three different people run the development groups: Ryan Lynch, Jim Brown and David Martinelli. Lynch is the organizer of Paradigm and RCL, and as a member of RCL Evansdale Holdings, RCL Sunnyside Holdings and WV Campus Housing. Brown and Martinelli are members of Paradigm and WV Campus Housing.
Martinelli is a professor of civil engineering at WVU. Brown owns G.A. Brown & Sons, a Fairmont construction company.
In a phone interview Thursday, Brown said Martinelli asked him "a couple of years ago" to get involved in a development project. It did not involve WVU at the time, he said. Brown is a graduate of WVU and member of the West Virginia Academy of Civil Engineers. He said he met Martinelli a few years ago during one of the organization's events.
Brown said he didn't know anything about the acquisition of the properties or a confidentiality agreement. His part in the project involves helping to create drawings and other renderings for the development at the site, he said.
WVU has paid Brown's company more than $65 million since 1990 through contracts to do renovation and other projects on campus. Brown said he - and not his company - is involved in the current land deal, did not think the relationship his company has with the university played a role in helping facilitate the agreement.
"I think your rep in the community speaks for itself," Brown said. "We've worked their now for 30-some years."
Reached in his office Thursday, Martinelli said he could not discuss details of the project. He agreed he had approached Brown and Lynch with the development idea, but said all three shared the "passion" to "do a development that would have a positive impact on the community."
Asked about the appraised value of the property, Martinelli said he thinks WVU is paying a fair price.
"Think of it as buying 42 small businesses. Each one of those parcels is a small business. Then you realize that ($14.5 million) number's just about right," Martinelli said.
He said the dollar per foot the developers are paying for the project is less than other developments in the area. He declined to provide that amount, but said it can be verified.
He said he didn't know anything about the confidentiality agreement, but thought it was probably "pretty standard."
Both Martinelli and the former property owners theorized as to what could affect the price of the property. Martinelli said once someone acquires property in the same area, the value of other touching property increases. Jones said he thought that could be the reason for the confidentiality agreement.
Martinelli said he did not think his position as a professor at the university was a conflict of interest or helped facilitate the deal.
"I am in no way (involved) in the decision making process for this for WVU," Martinelli said.
A WVU student-housing plan pledges to provide 979 new beds downtown by 2014. Those beds will come entirely from a "public/private partnership."
The document WVU submitted to the Legislature states it plans to have the Sunnyside housing and commercial developments ready by the fall of 2014.
University spokesman John Bolt told the Daily Mail Thursday he was not sure whether the development approved by the board of governors accounted for all of the new downtown beds.