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Monday, July 22, 2024

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Jones: Evaluating Development Is “A Work in Progress”

By C.M. Mattessich

Jones:  Evaluating Development Is ‘A Work in Progress’
By C.M. MATTESSICH
CAPE MAY – Mike Jones, Cape May’s tax assessor, is among the area professionals who say that we must wait to judge the long-term impact of recent county land use trends like the sweeping uptick in baby boomer purchasers, and the large number of second-home purchases.
A municipal assessor since the early 1980’s, Jones has served in Cape May fulltime for the past three years.  Before that, he was assessor in Upper Township here and Newfield Borough in Gloucester County.
  Like many assessors, Jones also oversees his own appraisal firm.  Located in Vineland, the company specializes in appraisals of condemnations, open space, farmlands, nature conservancy, and many other uses.  In a recent meeting with the Herald, Jones stressed that while he enjoyed building his practice through the years, he is an “assessor first,” and he clearly loves his Cape May job.
Jones recently was honored by his peers at the Southern New Jersey chapter of the Appraisal Institute with the George Olasin Award, given for a high level of ethics and professionalism.
Last week, he sat down with the Herald to discuss the changes he has witnessed from his boyhood days when he bicycled through the streets of Cape May, to his seasoned observations of the current scene.  Highlights of the interview follow.
What led you into the assessing field?
Assessing is really a corollary to the appraisal profession.  How you value properties is very similar, except one is in the private sector and the other, in the municipal sector.
Were you familiar with Cape May before you started as assessor here?
Oh, when I was a youngster, my Little League years were spent here in Cape May.  We had a house at 726 Corgie St., and when I first came here, I could tell you every which way you could go on your bicycle, all over town.  But to drive there now, I couldn’t tell you.  [laughter]
I loved the town, then and now, though it has completely changed.  It was a lot different time, in the early ’60’s.  The boardwalk still went way out over the ocean.  The Mall wasn’t there; Washington Street went straight through.  We had Liberty Theater and the Beach Theater.
My father was a builder, and he wanted to get away from the bustle of Vineland.  So we bought an old house and fixed it up.  We had no phone.  It was a seasonal dwelling, and it was a lot of fun.  That started my life in this city.
What do you think of the changes that have occurred?
Well, I think they’re all good.  Up to this point, they’ve really done an excellent job in creating a Victorian atmosphere down here that’s really second to none. 
Did that exist in the ’60’s?
No, it probably started about then.  But Cape May was strictly a seasonal town at that time.  Now, today, there are issues that all the barrier islands are facing, that Cape May has to address like everybody else.
And those are …?
For one thing, high land values are causing a lot of year-round residents to flee.  This is not only in Cape May;  it’s all the barrier islands. 
Young families can’t live here;  they can’t afford to live here.
And this now means that people are buying homes predominantly as second vacation homes.  They may be absentee landowners, not here year-round, which can cause problems for the businesses, restaurants and whatnot.
As for the commercial sector, let me put it this way:  residential values are skyrocketing, whereas commercial values are going up, but not anywhere near at the rate that the residential values are.
I’m not sure where all of this is headed, and I’m not so sure that any people do know.
The town is constantly having meetings about how best to attract people to come to the city, how best to keep people here, but it’s a work in progress, absolutely.
There has been some talk about the commercial sector really taking off, once second home owners settle in.
Well, the problem is, if the people aren’t here, they’re not here.  And we’re just not certain yet of their patterns.
Look at condo conversions.  We just had a conversion involving a large hotel, the Sandpiper, which converted into 51 condo units.  Are these people going to be here all the time, or not?  Are they going to be here just for the summer, or maybe just for a week in the summer?  We really don’t know.
We don’t know whether it’s financially driven yet, either.  I mean, if people are financially able to buy these units, how financially well-off are they?  Do they want to come down to get bang for buck, or is this strictly a weekend thing for them?  We don’t know.
Again, this is not peculiar just to Cape May;  it’s everywhere on the barrier islands.
Is Cape May’s infrastructure sufficient to bear the burdens of all the conversions?
I do believe so.  This fall, the revitalization of the Mall will start.  Everything’s going to be new, and they haven’t done that since its inception, which probably was 30 years ago. The Convention Hall has to be looked into;  they’re trying to figure out the best way to develop that.   It’s getting a little older, a little outdated, and they have to decide what to do with that structure, and that’s coming up sooner rather than later.
Generally, the city is really taking an interest in long-term planning;  the city is very good at that.  They’ve set up a revitalization committee;  a long-term planning committee; a Mayor’s advisory group.
The issues are on the table.  And it just takes time and money to figure out what to do.
Our weekly Property Transfer Charts indicate that median and average prices in Cape May are significantly lower than Avalon and Stone Harbor.  Why, when they’re all considered high-end gems?
Well, the market is what it is.  The average residential property in Cape May now is a little over $500,000.  A couple years ago, our values were going up three percent a month. I’d venture to say value still is going up on an annual basis.  It’s cooling off right now, but I haven’t seen any decline in value, not at all.
A couple years ago, there was a period where, for a sale price, an owner could just throw anything up on the wall and see if it stuck.  And people would buy it.   Now, it’s more a question of whether a property’s realistically priced.  If it is, it’ll sell.  It may take a little longer, but it’ll sell.
What’s motivating people to buy here in town?
No different from everywhere else:  it’s baby boomers with money, whether it be from their job, inheritance, whatever, they have the money available and this is what they’re putting it in.
Is it changing the cultural environment to have so many residents of the same social-economic strata?
It’s really too early to tell.  This is uncharted territory.  I don’t know where it’s headed, but I know it’s not stopping.  There are a lot more baby boomers following.  Even I just bought a home here!
One thing, though:  people who are buying all these properties, they’re going to have to step up, and say I really want to contribute, get involved in what’s going on in the community.  They can’t be absentee landowners.  They have to have a say in what’s going on in the town.  Join committees;  get involved in MAC;  get involved in chamber of commerce type things.
What happens if they don’t do that?
Your guess is as good as mine.  But you could get back to more or less a seasonal community and not a year-round community.
Cape May has extended the length of time people stay.  Before it was just the summer, 10 weeks like all the other towns.  We’ve extended that;  I think it’s more like nine months of the year now.  Now, too, there are other issues, like how long can we keep the shoulder season open.  January and February things are pretty dead down here.  Other than that, they’ve always kept things very active.
On a broader scale, where do you see farmlands headed here in Cape May?
I’ve done a lot of appraisal work for farms in other counties.  The dynamics are changing.  Typically, a farmer is either well off or not, and he either needs money or he needs to invest it.  There’s really not any middle ground.
But now the pressures are really hitting;  the K.Hov’s and the Beazers are really forcing the issue as far as values go.  The nature groups are having a tough time right now, though you do get the farmers who really don’t want to develop, but still want to get paid.  They’ll take a little bit less money, knowing that their farm’s going to be preserved.
And it appears that golf courses are subject to some unique pressures?
Four or five years ago, the scenario was that a lot of golf courses were being built.  And rightfully so – there was a lot of demand for golf.
But as usually happens, excess profits breed ruinous competition.  That’s exactly what happened here.  Too many came on the market.
A lot of money is being spent by people who play golf, but there are just too many courses out there.  There’s not enough rounds being played to make it financially feasible for all the owners.  So some courses are being sold for residential use.  Some, like the Ponderlodge situation, really had troubles.  The state has bought some of these; the Green Acres program has bought several courses.
It’s another issue that’ll clear up over time.  The good operators, they’ll make it.  People who maybe should not have been in the business in the first place, they may go.
Are there any land use segments, whether housing or commercial, that are irretrievably lost?
Well, look at the barrier islands.  Right now, with land so valuable, typically there’s just no way you’re going to develop many properties for single family use.  Typically it’s going to be for some kind of a condominium, a multi-unit type structure where you can conserve your land use.  Most of the large acquisitions in Cape May recently have been for that type of use, or some type of multi-family, strictly condominiums, 20 units.
And that gets back to what we talked about earlier.  With the large condominium conversion, it remains to be seen whether owners are going to be here all year round, whether they’re going to be here for the summer, for a weekend or a month vacation, or whether they’re going to rent?
Are you happy with the results of Cape May’s reval?
When I was hired, I came right into the middle of it.  We were ordered by the court to re-value down here.  Our sales ratio had dropped well below 85 percent, and we hadn’t had a reval for probably 10 years.  There’s no question we were due.  For whatever reason, the reval was delayed, and when we were going through it I thought ‘I’m not enjoying this too much.’
It was difficult, but by today’s standards (I mean, I know what’s going on in the other municipalities), ours was a walk in the park.  Our issues weren’t anywhere near as complicated.
Years ago, you used to think that your assessment was land and building as your total value.  Your land value was minimal, and your building value was more than what your land value was.  Now it’s completely reversed, and your land value is probably five times your building value.  And people who aren’t in the market, who haven’t really looked at what proportions are working, they say ‘This can’t be;  this just can’t be”  They’re just incredulous that their land value could be worth this much.  And that was tough, educating the public in that way.
People realize what it means if you just ask them “Well, what would you sell your property for?” They come to that realization of “well, yeah, my assessment is in line with what I’d ask for it, and then some, I’d probably ask for even more.”  That’s usually happens.
How many appeals did you have?
Not very many.  The bottom line is that our process went very well.  I have no complaints about our reval.  And right now, our ratio is 97 percent.

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