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Industry expert has 'concerns' about Mississippi National appraisal

RED WING — The public received an appraisal of Mississippi National Golf Links last week that offered a revealing look at how much the 36-hole municipal golf course in Red Wing is worth. However, an industry expect has since called into question the value of that document.

Larry Hirsch, founder of Golf Property Analysts and past president of the Society of Golf Appraisers, reviewed the document and said "the appraisal clearly has some issues."

The issues cited by Hirsch, a Philadelphia resident contacted Thursday for feedback by the Post-Bulletin, include the following concerns listed in the appraisal: use of outdated data, an unusual method of developing a cap rate and the gross income modifiers seemed high, among others.

However, Hirsh also offered the caveat that he's unable to evaluate the accuracy of the appraisal without first viewing a full version of the partially redacted appraisal; the one released Tuesday revealed most figures, but still blocked access to current operator Wendell Pittenger's private business data. The numbers had virtually all been redacted in the first release of the appraisal on April 1.

Hirsch said a full critique would require a Standard 3 Appraisal Review, which typically costs more than $2,000.


"I saw some things there that I certainly want to look into," said Hirsch, who holds general appraisal certification in 11 states, real estate licenses in six and has frequently served as an expert witness in legal matters related to golf property. "I will say there are clearly some issues that raise concerns."

The appraisal was completed in late 2010 by James Norby of J.C. Norby & Associates, Inc., which is based out of Eau Claire, Wis. The firm was selected from a pool of about six candidates after discussion between the city and Associated Bank, who split the $6,900 bill.

Norby's appraisal lists the fee simple value of the 400-plus acre course at $2 million. The cost approach was judged to be $3.55 million, the market approach is listed at $3.2 million and the income approach is $1.6 million.

Pittenger offered to buy the course in December for about $1.2 million, or enough to cover the city's remaining obligation on the 1998 revenue bond through Associated Bank.

While Hirsch is a member of the Society of Golf Appraisers and Norby is not, city officials downplayed Hirsch's concerns when reached for comment Friday.

"I'm sure every appraiser has a different methodology, so that doesn't surprise me at all," Red Wing Finance Director Marshall Hallock said. "We have to conclude that a local appraiser has a better handle of the economic impact on a regional basis."

City council member Mike Schultz agreed.

"He did it well, and we're happy with it," said Schultz, who's a member of the city's golf course committee.


Still, Hirsch's concerns echo a point that Save MNGL, a local citizens group against the proposed sale, have been harping on for months. They've requested that three appraisals be done in order to weigh different opinions.

Hallock says the current "economic and budget realities" — which is what has prompted the potential sale in the first place — make it hard to justify spending more money on appraisals, but Erik Fridell, co-founder of Save MNGL, says Hirsch's stance validates their requests.

"That just sort of verifies what we already think," Fridell said. "I think there's some red flags, but that's reaffirming to hear (Hirsch does too).

"It's almost unthinkable, in my opinion, if the city wants the best possible price as it's been stating, you'd absolutely get three appraisals. That's just common sense buying and selling."

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