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CAMPTON HILLS – When Campton Township paid $7 million for the 208 acres of Gray Willows Farm, officials celebrated the acquisition as part of its open space preservation plan.
The 200-plus acre farm on Burlington and Corron roads featured rolling hills and 175-year-old oaks, a pond and creeks. In all, the township spent nearly $40 million to buy 1,377 acres of open space, using the proceeds of two referendums. The Gray Willows purchase is the last of that money, Township Supervisor John Kupar said.
Officials based their purchase price on an appraisal that put the farm's value of its nearly 220 acres at nearly $9 million, about $34,000 an acre – one that a township resident and appraiser claims is too high in a down real estate market.
Given the current market, appraiser Ed Kling said he would have put the property's value at about $4.3 million, just under $21,000 an acre. Kling said the township vastly overpaid for the property, based on an appraisal that set the land too high.
"I am furious," said appraiser Ed Kling, whose office, Real Valuation Group, is in Campton Hills. "This is my tax money. It is a beautiful parcel, but it's not worth that kind of money. The township should have paid less for it. You've got land that is platted, zoned and approved for high-end quality housing selling for $20,000 an acre."
Township officials disagreed.
"Given the development potential of that property, I thought that the price we paid was on the low end," Trustee Christian Boissonnas said. "I would have argued to pay more, but then we would not have been able to buy the whole property, only part of it."
Kupar disputed Kling's criticism of the appraisal.
"The appraisal was done two weeks before I met with their lawyer in November," Kupar said. "Everything we had was current and reflects true market conditions."
The township paid $400 to appraiser Scott Kling – who is Ed Kling's cousin — to do the Gray Willows appraisal. According to the appraisal, it "will function in decisions or negotiations for the possible offer to purchase the property."
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Scott Kling did not return numerous requests seeking comment, including voicemails, an e-mail and a message left at his Batavia home.
While Scott Kling has an appraisal business, City Suburban Appraisals, Inc., based at his home, he also works in Ed Kling's office. Ed Kling said he is not trying to disparage his cousin, but said his Gray Willows appraisal is just plain wrong.
After looking over Scott Kling's appraisal, Robert Gorman, chairman of the Illinois Board of Appraisal for the state's division of professional regulation, said he turned it over for further review.
"I'm chairman of the appraisal committee, and as such, I cannot comment on the results of reviewing the appraisal," Gorman said. "But I'm turning the report over to the state licensing agency for review."
When state licensing officials find violations in an appraiser's report, Gorman said, recommendations can range from no action to requiring more education to revocation of the appraiser's license. Gorman said if the appraiser does not agree with the recommendations, he or she has the right to a hearing.
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Prices for other farm properties offered for sale seem to support Ed Kling's assertion.
A 226-acre cropland with a small farmstead and corncrib a half-mile from Gray Willows on Route 47 and Beith Road is being offered for sale at $14,900 an acre, said Joel Ericksen a broker with CB Richard Ellis, a real estate company listing the property.
Another farm, the 94-acre Gurke Farm on Russell Road in Virgil Township, is being offered for sale at $18,000 an acre, said Jeff Waddell, of Martin Goodrich and Associates, which specializes in selling undeveloped land.
"It's open land completely surrounded by development, no buildings at all," Waddell said of the Gurke Farm. "It's development ready – but you have to have a developer."
Waddell said an appraisal of $30,000 to $40,000 an acre for open space in Kane County was more the norm three to four years ago – not in the current market – and certainly not in November when Scott Kling did his appraisal for Campton Township.
"The music had certainly stopped by then," Waddell said. "This market has completely collapsed in last 12 to 36 months. The bottom has fallen out. We had open land a developer would have paid $50,000 to $60,000 for. But that was an eternity ago. It's a different day now."
Waddell said his firm recently sold a farm similar to the Gurke property for $11,000 to $15,000 an acre.
"It was once $25,000 to $50,000 per acre, but that (decrease) is very common around the whole Chicago area," Waddell said.
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Kupar said the Gray Willows property is not just a farm, though, and its value cannot be compared to cropland.
"We did not buy a farm field," Kupar said. "B&B Enterprises offered $50,000 an acre for (Gray Willows Farm) a few years ago. There are three homes on the property, buildings that are historically significant and could be turned into a clubhouse. It has old trees, a creek, a pond and features you are not going to find on a flat farm field."
An attorney who represents B&B Enterprises did not return phone messages seeking confirmation of the offer.
Ron Klein, the attorney who represented the Lillian Fessenden Gift-Giving Trust and the Gray Willows Farm Limited Partnership in the sale of Gray Willows to the township, confirmed a developer offered more for it a few years ago.
"I have a signed offer that was rejected by the family for $50,000 an acre," Klein said.
Klein said he did not have the offer readily available, but recalled it was about three years old. He said he would not release a copy without his client's consent.
But Klein said the Gray Willows property cannot be compared to regular, flat farmland because only 80 acres of it is being used for crops.
"It's a unique piece of property," Klein said. "There's not another one like it in Kane County."
Klein said the family did not do its own appraisal, but relied solely on the value presented by the township's appraiser, Scott Kling.
"I asked, 'Why are [the property owners] selling it for less than the appraised value?' " Klein said. "And [township officials] said that's all the money they have."
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Campton Township Assessor Alan Rottmann defended both the appraisal and the purchase of Gray Willows Farm, saying instead of overpaying, as Ed Kling and others might charge, the township got a bargain.
In its simplest terms, Rottmann said, an appraisal is a substantiated statement of an opinion of value. He said it is not unusual for there to be disagreements among appraisers.
"Based on (Kling's) appraisal, I would state that the (township) board saved the taxpayers of Campton Township over $1 million," Rottmann said in an e-mail. "As with other real estate situations, people will always be second-guessing the values of property. We see this all of the time when property is taken through condemnation for roads and other public uses."
State law does not require townships to get an appraisal before buying property, only when selling it, according to a spokesman from the Township Officials of Illinois.
Even so, Ed Kling said, the township board still should have sought requests for proposals from other appraisers before spending millions.
"Would anyone using their own money consult several professionals if they are going to make a $7 million purchase? I know I would and I would be extremely careful with other people's money," Ed Kling said.
Kupar disagreed with Ed Kling's criticism and characterization.
"We hired a competent appraiser who appraised it at $8.7 million," Kupar said. "We purchased it at $7 million and I think it is a great value."
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Scott Kling's appraisal compares Gray Willows Farm to the sale prices of five other properties he said were similar in size. His appraisal also notes that he reduced each in value because of the economic downturn.
• A September 2005 sale of 25 acres on Brundige Road in Geneva sold for $1.25 million or $50,000 an acre. The appraisal notes the sale was for residential development within the Settlements of LaFox project and occurred at the peak of the real estate market.
• A December 2006 sale of 20.6 acres at McKee Street and Theisen Court in Batavia sold for $1.4 million or nearly $68,000 an acre. The appraisal notes it was purchased for another phase of a residential development.
• A May 2007 sale of nearly 59 acres on 14807 Church Road in Huntley sold for just under $2.1 million or $35,400 an acre. The appraisal notes the property is in unincorporated McHenry County. The appraisal does not state how the property was to be used.
• An April 2008 sale of 65.5 acres in unincorporated Campton Township sold for more than $3.4 million or $52,000 an acre. The appraisal notes it is intended for residential development.
• A May 2008 sale of 44.4 acres at 11909 Brier Hill Road, Huntley on the border of Kane and McHenry counties was sold for $1.8 million or more than $41,000 an acre. The appraisal notes it was for residential development of more than 1 acre per lot.