Tuesday, May 25, 2010

Conditional Use Permits and Valuation

Conditional Use Permits and Valuation

Osseo is a small city east of Maple Grove. Like many communities, Osseo took
pride in their Osseo Elementary School. ISD 279, Osseo Schools, is the 5th
largest district in Minnesota. The District determined they had too much
classroom space. Since Osseo Elementary is an older, smaller building with
higher maintenance costs the District closed this school.

The city of Osseo was livid. Even though the school had been there since
1953, the land is zoned Residential. The school operated on a Conditional
Use Permit. When the school closed the City of Osseo yanked the CUP, even
though the District owns the property.

Now the school district wants to relocate a program for troubled teenagers
from leased space to Osseo Elementary. And the city of Osseo said "not so
fast". The CUP is gone. And the City of Osseo has no legal requirements to
grant another one to the School District.

If I was given the assignment to appraise the 10 acre Osseo Elementary
school site, what is the highest and best use? Its zoned Residential.

My very first day of real estate agent school the teacher grabbed a bunch of
pencils, held them up, and said "real estate is a bundle of rights". A
Conditional Use Permit is not a permanent part of that bundle.

A Conditional Use Permit is a like parking an RV on a property. Its a
temporary use that doesn't necessarily run with land. In my opinion, a
Conditional Use Permit should NOT come into play in valuing property.

Do you agree?

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