The Mercury building purchased last month by businessman James Coleman, who owns Purgatory Resort, sold for $9 million, a price “considerably” lower than the fair market value on the La Plata County Assessor’s Office books, said Carrie Woodson, the county assessor.
The 81,380-square-foot Mercury building includes office space, a small medical clinic, a cafe and a fitness center. The building itself sits on 13.5 acres just south of the Durango Mall. Tracy Reynolds, structural architect and principal engineer at Reynolds Ash + Associates, said in December that Coleman plans to use the space for commercial, office and residential uses.
Buildings that facilitate a variety of uses such as those described by Reynolds are typically priced a bit higher in the market, at least when they are in use, Woodson said. That’s because a buyer is purchasing the income streams associated with the businesses and activities housed in such facilities.
But in Mercury’s case, it sold for less than the current fair market value of $15,355,460. It was a private sale that won’t count toward property valuations, Woodson said.
The Assessor’s Office uses building sales to assess property values for tax purposes. In order to use the sale in its assessment, the Assessor’s Office must verify the transaction was what Woodson called a “qualified arm’s-length transaction sale.”
The Mercury building sale isn’t a qualified arm’s-length transaction sale because it was never listed on the open market, she said.
Fair market sales are open to everyone and everyone is made aware of them, she said.
“When we’re talking about a qualified arm’s-length transaction, we’re talking about a sale that took place between a buyer and a seller that were not related,” she said. “They were not business associates and there was not any other interest involved. That’s arm’s length.”
Assessed property values are used for two years before the values are reassessed. Current values are determined by looking at the market value as of June 30, 2020. Next year, values will be determined by assessing all transactions from July 1, 2020, through June 30, 2022.
“People ask sometimes, why does it seem like the assessor’s values are less?” Woodson said. “The reason is we’re looking in the rearview mirror two years.”
The Mercury building cost $19.8 million to build in 2014, according to Architecture Magazine.
Stacey Glaser, a spokesman for Coleman, told The Durango Herald in December that the Mercury building is a source of pride in Durango and whatever plans take shape for the space, Coleman and his team hope the building continues to inspire the community.
Efforts to reach Glaser on Tuesday about any updated plans were unsuccessful.
“There’s been a lot of pride associated with that building, and that’s something that we want to continue however this space ends up being used,” Glaser said in December. “We hope it continues to be inspiring for everybody.”
cburney@durangoherald.com
