WATERTOWN – A state Supreme Court judge ruled in favor of the COR Development Co. valuation challenge on the old Mercy Hospital property, using a valuation much lower than the city’s number.
On Friday, Judge James P. McClusky concluded that the nearly 6-acre property at 217 Stone St. has a market value of $ 531,000, while the city owns the property at $ 1.4 million in both 2019 and 2020 Dollar valued.
Prior to going to court, COR filed for a $ 238,000 valuation on the property located between Stone and Arsenal Streets and South Massey and Sherman Streets.
The judge’s decision also sets the estimate of $ 531,000 for 2020 and 2021.
City Assessor Brian S. Phelps was surprised by the verdict.
“Of course I’m disappointed with the decision,” said Phelps.
Judge McClusky did not adopt the city’s argument that the property was worth more in his ruling, as COR listed the property and three other nearby smaller lots for a total of $ 2.5 million.
The judge also contradicted the city on several other points in its legal arguments.
In 2013, COR bought the 5.59 hectare property, demolished the Mercy Hospital and planned the construction of a mixed development of apartments and retail space.
According to their website, development company Syracuse calls the hospital’s location a “first investment opportunity”.
Judge McClusky stated in his ruling that COR was not pursuing its plans as the local market was saturated with 3,900 new units between 2008 and 2015.
The judge also ruled that a property of this size should be compared to sales in the local market. Of six properties the city compared to the COR location, the others were in the cities of Oswego, Syracuse, Rome and Utica.
The judge wrote that the city ignored the fact that “the property has been listed for many years with no viable purchase offers”.
The judge agreed with COR that the property will likely be sold in pieces rather than as a single package.
In its legal argument, the city described COR as “trained business people” who received $ 4 million in government funds to demolish the hospital to make way for redevelopment.
The city also argued that COR representatives got into legal trouble because of their business practices.
In response to the judge’s decision, Mr. Phelps pointed out that the recent commercial property sale in Watertown is valued higher than what the judge dictated.
A portion of DealMaker Auto Group’s former property at 1068 Arsenal St. sold for $ 1.325 million, and three lots near State Street Market are selling for approximately $ 1 million.
The city and the company fought over the rating for the hospital site for over a year before it went to court.
The city and society have agreed on the assessment amounts for five further COR-related properties.
These lots are along Sherman Street, where three houses were demolished, and lots next to two former parking lots.
COR originally planned to invest 70 million US dollars to convert the site into 40,000 square meters of retail and office space as well as 160 to 200 apartments.