BY RUSSELL ROSS
Diamond Drive Property Owner

Greetings, I am the owner of the Diamond Drive properties which have received some recent attention due to Los Alamos County’s interest in purchasing them.  I am taking the opportunity to provide some additional information regarding the history of the proposed transaction.

Last July, I contacted County staff and inquired if the County would be interested in purchasing 1183 Diamond Drive, which currently houses the state public health clinic and County social services office.  I was told they were interested in the property but were also interested in acquiring the recently cleared land formerly housing the pharmacy and gas station.  After some consideration, I put forth an asking price that I would be willing to take for the three properties. I explained at that time, that the price would be above appraisal cost for reasons which I will explain below.

Real estate developers make profits in a variety of ways including favorable acquisition costs, assembling various parcels that are worth more as a whole than individually, making improvements to the property, developing vacant parcels, as well as appreciation over holding periods.  They don’t make money by acquiring property, improving it, and then selling it at assessed value.  

There are significant costs and work involved with getting in and out of real estate holdings.  I explained to County Manager Anne Laurent that I would be willing to discount my projected profits from this real estate position, but the total would still be above the assessed value.  As an illustration, let’s assume someone showed up on a person’s doorstep and asked to buy their home which currently was not for sale.  After consideration of the work and costs involved in selling their home, and finding another they would be happy with, most people could come up with a number they would be willing to take.  However, it is highly unlikely this number would be anywhere close to the assessed or appraised value of their home. Cash transactions typically don’t involve appraisals because it is understood it is up to the Buyer to determine a property’s value based upon their goals and resources.  The properties on Diamond Drive currently cannot be bought by the County (or anyone) at assessed or appraised value.

I communicated my initial asking price for the properties on August 6.  The County Manager met with the Council in a closed session on August 20 to discuss the proposed acquisition.  Following this meeting, I was told the Council had directed Ms Laurent to negotiate a purchase agreement.  We agreed on a lower price on August 30.  Had it been explained to me at the time that the Council was not resolute in their decision to acquire the property and would merely be opening up a public comment period on the issue months later, I could have saved everyone a significant amount of time.

I requested a closing date before the end of the year so I would not have to worry about changing tax rates.  All due diligence documents were provided to the County on September 19.  The characterization that this was a high-time-pressure deal is simply not accurate.  Most cash purchase real estate transactions are closed within 30-60 days following the agreement.  Doing business with a governmental entity has significant downsides including its ability to move quickly, no sole decision maker, and making public one’s private business.

The Council ultimately decided the goals around the acquisition weren’t worth the premium on the property despite a $400 million annual expenditure budget.  I am sure everyone learned a lot from this process.  I know I certainly did.  I don’t harbor any ill will toward the Councilors, the County staff, or the citizens of Los Alamos who have every right to show up and question the Councilors who asked for the privilege to lead.  

While it turns out the real estate won’t be owned by the community going forward, it will be redeveloped at some point providing services in demand.  I have been asked about a car wash at that location.  That is one of many uses that would work there.  I currently have no plans for developing the site.  The vacant buildings were removed as they were an eyesore and a liability.

I feel fortunate to own real estate in Los Alamos.  It is a beautiful community with an amazing claim on history and a critical role to play in our country’s future. 

Happy holidays!