3/9/2014 Appraisal Triggers Latest Dispute Over Northern Pass | New Hampshire Public Radio

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North Country 3:02 PM THU NOVEMBER 1, 2012

Appraisal Triggers Latest Dispute Over

Northern Pass
By CHRIS JENSEN (/PEOPLE/CHRIS-JENSEN)

(http://m ediad.publicbroadcasting.net/p/nhpr/files/2 01 2 1 1 /sandy %2 0and%2 0jim %2 0dannis.JPG)

Jim and Sandy Dannis: The original route proposed by Northern Pass would have crossed their land in
Dalton.
Credit Chris Jens en, NHPR

It began on about 135 acres of land in Dalton.

The land is owned by Sandy and Jim Dannis, who were attracted by its classic North-
Country splendor and its lost-in-time seclusion.

Standing in the middle of a hilltop field - with a spin-around 360-degree view - Jim
Dannis turns and turns.

“It is a beautiful exposure,” he said.

But now it has become the center of a new Northern-Pass controversy, one that
opponents of the project worry has ominous implications for the state.

An appraiser who concluded the Northern Pass hydro-electric project would seriously
diminish the value of the Dannis’ land could lose his license because of a complaint
Northern Pass filed with state
regulators.

In that June 2011 complaint Northern Pass asserted that the appraiser, James Walker
of Franconia, acted unprofessionally and that his conclusion about a loss of value may
have “unfairly” harmed Northern Pass.

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The basis for the accusation came from
another appraiser, Brian Underwood.

Underwood previously did a report for

Northern Pass that concluded high-
voltage towers do not adversely impact
property values.

Underwood also heads up New

Hampshire’s Real Estate Appraiser Board,
which is considering the disciplinary
action.
That has gotten the attention of
Executive Councilor Ray Burton. Burton
(http://m ediad.publicbroadcasting.net/p/nhpr/files/2 01 2 1 1 /walker.JPG)
James Walker: His appraisal of land in Dalton
prompted Northern Pass to file a complaint against
him with a state regulatory board.
Credit Chris Jens en for NHPR

said he is concerned about a conflict-of-

interest because of Underwood’s previous work for Northern Pass.

The appraiser board members are approved by the Executive Council and Burton said
the make-up of the board needs to be reviewed.

“I certainly am not leaning towards re-appointing Mr. Underwood,” he said.

Underwood’s term expired in August but he remains on the board while awaiting re-
appointment.

Worries over a strategy of

intimidation

Soon Walker’s case is expected to go

before Underwood’s board and some
Northern Pass opponents are worried
there is a larger strategy at work:
Making other appraisers think twice
before concluding Northern Pass will hurt
property values.
(http://m ediad.publicbroadcasting.net/p/nhpr/files/2 01 2 1 1 /Underwood_1 .JPG)
Brian Underwood has done work for Northern Pass
“I think they are out to frighten any other and also heads up the state's Real Estate
Appraiser Board.
appraisers from doing work for land
Credit Chris Jens en for NHPR
owners who are interested in knowing
how much value they are going to lose by having land in the proximity of the
transmission line,” said Robert Baker, a lawyer from Columbia.

If Northern Pass moves ahead, it is anticipated some opponents will argue that the
towers - described by Northern Pass as typically being 80 to 110 feet high - will
significantly reduce the value of their land. Appraisers would play a crucial role in that
argument.

Northern Pass spokesman Michael Skelton declined to discuss the Walker complaint
citing its “confidential and sensitive nature.”

Skelton did not respond to an e-mail asking whether Northern Pass would bring
complaints against any other appraisers who conclude the project would hurt property
values.

Walker also declined to be interviewed.

How it began

Late in 2010 the Dannises hired Walker, a well-known North Country appraiser, to
estimate the impact Northern Pass would have on their land should the project go
ahead.

In March 2011 Walker handed over a 68-page report that concluded that the towers
would result in the 135-acre parcel losing about 63 percent of its value.

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A 12.5 acre building site favored by the Dannis’ son for a home would lose about 91
percent of its value.

Gauging the loss

Walker’s report didn’t sit well with officials at Northern Pass, which is backed by
Northeast Utilities, the parent company of Public Service of New Hampshire.

Those estimated losses of value are far higher than some national studies have found.

That includes a study cited by Northern Pass done in 2008 by James A. Chalmers, who
has a doctorate in economics from the University of Michigan and is now a consultant
based in Billings, Montana.

Chalmers reviewed what he considered “the most objective and reliable studies” done
by others on the impact of high-voltage lines.

He concluded about half of those studies found no negative impact.

In the other half Chalmers concluded the effects “tend to be small; almost always less
than 10 percent and usually in the range of 3 – 6 percent.”

But earlier this year Chalmers released his own study conducted in Montana.

He found a reduction in value of about 15 percent on some residential property within

1,000 feet of high voltage lines. In another case he found the value of a residential
parcel dropped 50 percent.

In an interview, Chalmers also told NHPR such towers are “not an asset” and he
wouldn’t want them in his backyard.

He also said he could imagine the towers causing a greater loss in value in a worst-case
scenario.

“If it is basically a view lot and your view is down the valley and you string
transmission lines across that valley right in the middle of the view shed and that
becomes kind of the dominant feature of the view, I can easily imagine your $200,000
second home might only be a $75,000 second home or a $100,000 second home --
something like that,” he said.

A significant loss of property value is also a concern of Andrew Smith, the owner of
Peabody & Smith Realty in Franconia.

Without a doubt the prospect of Northern Pass is having “a substantial, negative

impact” on property, Smith wrote earlier this month in a letter to State Senator Jeanie
Forrester who is heading up a commission studying whether the high-voltage lines
could be buried.

“The impact has ranged from making the property essentially unsalable, to value
reductions between 25 percent to 50 percent. Due to the fear of the future impact,
more often than not the informed buyer has chosen to move onto other properties, and
not making offers of any kind on the tainted property,” Smith wrote.

Northern Pass acts against Walker

Shortly after Walker’s report on the Dannis property became public, Northern Pass
declared significant concerns about its credibility.

Then in June 2011, Dana Bisbee, a lawyer at the Devine Millimet law firm, quietly filed
a complaint with the appraiser board on behalf of Northern Pass.

Bisbee accused Walker of flaws in his methods, saying “Northern Pass may have been
harmed unfairly.”

Bisbee did not return either a telephone message or an e-mail from NHPR.

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Bisbee’s complaint was based on the report done by Brian Underwood.

But land owner Jim Dannis questions the value of Underwood’s criticism of
Walker. Dannis said as far as he knows Underwood never went onto his land in
Dalton.

Dannis said walking the property is important because views that would suffer most
from the towers can only been seen by leaving the road and hiking up a hill.

In a brief telephone interview, Underwood told NHPR he went “to the Dannis
property” but he declined to say whether he went onto the property or stayed on the
adjacent road.

While Northern Pass spokesman Michael Skelton declined to discuss most elements of
the Walker case, he said Underwood was not hired to do a “proper appraisal” of the
Dannis’ property.

Instead, Skelton said, Underwood was to “review Mr. Walker’s appraisal of the Dannis
property and assess whether the methodology used and conclusions reached in the
appraisal were appropriate.”

Disciplinary action recommended

Now, more than a year after Northern Pass filed its complaint, the issue is finally
coming to a head.

An investigator working for the appraiser board is recommending disciplinary action

against Walker.

That recommendation is based on a review of Walker’s report conducted by Louis C.

Manias, another appraiser, who is based in Concord.

In his conclusion Manias wrote, in part, there are “significant issues” regarding
whether Walker followed accepted appraisal practices.

“While understanding that some of the errors may be considered minor, the amount of
errors in the appraisal report are of great concern,” Manias noted.

An independent review also finds fault

At the request of NHPR, W. Tod McGrath, the interim chairman of the Massachusetts
Institute of Technology’s Center for Real Estate, reviewed Walker’s appraisal of the
Dannis’ property.

McGrath said Walker had a challenging assignment in the North Country, trying to
measure something that “ is hard to measure anyway.”

“What appraisers like to do is they like to look at data. They like to let the market speak
in terms of what the data says and that gives them a strong foundation for drawing
conclusions,” he said.

In short, Walker needed to be able to compare pieces of land similar to that owned by
the Dannises that had such high-voltage power lines and had been sold.

But in the end Walker failed to support his conclusions about the loss in value, said
McGrath.

However, McGrath said Walker did not appear to have acted in an unethical or
unprofessional manner.

“I think the problem he has is one of completeness in terms of assembling a data set
and using maybe some slightly more sophisticated analytic tools or methodologies,”
McGrath said. “I think that was the big challenge for him.”

Criticism of Underwood’s study for Northern Pass

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Nor is McGratch impressed with Underwood’s 2011 study of property values in
Deerfield and Littleton, which he did for Northern Pass’ law firm, Devine Millimet.

In that study, commissioned by Northern Pass, Underwood concluded high-voltage

lines would not significantly affect property values.

McGrath said Underwood did not support his conclusion.

One flaw, McGrath said, is that Underwood compared equalized tax assessments of
some property with sales prices of others.

The best method would be to compare sales prices with sales prices, he said.

“So, when you compare an actual sales price with an assessed value and you try to
draw a conclusion you always think about, ‘What is the validity of the assessed value?’”

A spokesman for the Appraisal Institute, an international professional organization

with 23,000 members, said comparing the equalized tax assessment with a selling
price comparison is “apples and oranges.”

As McGrath sees it, Underwood’s method “doesn’t really answer the question of
whether these high-voltage transmission lines affect the value of the property.”

McGrath also said Underwood did not review many sales and in part relied on
unpersuasive anecdotal information.

McGrath said the studies done by Walker and Underwood both suffer from the same
problem: “The data they rely on is not sufficient, I think, to draw credible conclusions
as to the likely impact of property values.”

Underwood did not return several calls from NHPR asking for comment on McGrath’s
critique.

That Underwood study – which was touted by Northern Pass - was labeled as
“preliminary.”

Underwood told NHPR he never did an additional, final study because Northern Pass
didn’t request it.

Northern Pass spokesman Skelton declined to answer questions about that study.

Action pending and a counter complaint

Now the appraiser board has to decide whether to follow the recommendation to take
action against Walker.

If that happens, Underwood - who is chairman of the appraiser board - told NHPR he
will recuse himself.

But Underwood himself is the subject of an ethics complaint by Walker.

In a complaint in July, Walker claimed it was improper for Underwood to have

advertised his position as chairman of the appraiser board in offering review services
“for new licenses and upgrades for the New Hampshire Real Estate Appraiser Board.”

This is the second time Walker has had a run-in with the appraiser board.

In 2007 a property owner complained the appraisal done by Walker was too low and
he had not done a professional job. Walker denied any wrongdoing but in 2010 was
fined $250 and required to take a seven-hour report writing course.

Dalton land owner Jim Dannis said he was aware of that when Walker was hired. He
thought it was an inconsequential matter and thought Walker did a thorough and
professional job.

A challenge for appraisers in the North Country

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Peter Powell, a Lancaster realtor, said it is hard in the North Country to prove the
impact of something like Northern Pass because “you can’t find comparables for
something that hasn’t happened yet.”

Other studies of the impact of high-voltage power lines are in areas that are not as
pristine as the North Country, said Powell, who is also a member of the NHPR Board
of Trustees.

“So, apples-to-apples comparisons are impossible,” Powell said and that means the
professional opinion of an appraiser “is reasonable and proper.”

Whatever the outcome of the complaint against Walker, the issue of property values
and the issue of the impact of the Northern Pass project is not going away anytime
soon.

And the Walker case has added more friction, if not fire, to the controversial project.

(http://m ediad.publicbroadcasting.net/p/nhpr/files/2 01 2 1 1 /dannis%2 0together.JPG)

Sandy and Jim Dannis say the Northern Pass towers would have crossed this parcel of land on which a
son wanted to build a home. Northern Pass says it has changed the route.
Credit Chris Jens en for NHPR

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5 Comments NHPR 3 Israel Piedra

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Join the discussion…

Just-compensate! • a year ago

The Chairman Brian Underwood is a fraud. I have run into his work in Federal
Bankruptcy Court in Manchester, NH, (anyone can readily get a copy of his
reports in Manchester, NH Bankruptcy court) and in my opinion he is LUCKY
someone hasn't filed a complaint for unethical and non-compliant appraising;
not only on the state level but federal as well for testimony in federal court on a
"restricted use report". In one case a drive-by appraisal riddled with errors cost a
party relief from a lien of over $300K...based on an irrelevant and poorly
supported "report". Not too sure why or how this guy is in the position he is in;
Underwood doesn't know what he doesn't know...he needs to be exposed. Don't
let the door hit you on the way out....and as for other Appraisal Board members,
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let the door hit you on the way out....and as for other Appraisal Board members,
keep-up the same attitude and the same will happen to you...endless loop of
clowns and frauds.
1 • Reply • Share ›

Rick Samson Stewartstown • a year ago

Mr. Walker is NOT A HIRED GUN that has been bought by Northern Pass. He is
a respected hard working fair New Hampshire realator that has been employed
by the banks in the north county for many years . He is human and is being
played by Northen Pass as are many other people in the north country.
1 • Reply • Share ›

kelweb • a year ago

Re: Underwood previously did a report for Northern Pass that concluded high-
voltage towers do not adversely impact property values.

Are you kidding me?!?!? My husband and I are PURPOSELY waiting to buy land
up north till we know for sure if the northern pass will go in or not. We want to
move north to get AWAY from traffic, noise, and the ugliness of power lines.
High voltage towers DEFINITELY affect the value of the land. No one wants to
buy land only to have to live near those ugly (as well as high EMF producing)
towers and have the beauty of the white mountains diminished by having to look
at those. James Walker was using common sense and SHOULD keep his
license.
2 • Reply • Share ›

Tom Tremblay • a year ago

I cannot comment on whether or not the value of a parcel of land is impacted by

15%, 50% or 91% as a result of NP but this whole charge against Jim Walker is
nothing more than intimidation by a large company and a scare tactic. The fact
of the matter is, a parcel of land like the Dannis', impacted by the NP, could be
rendered unsellable or sellable at some greatly reduced price whatever the
discount. To say it has no impact is not responsible. To say it has a 15% impact
is not responsible as I believe it would have to be a deeper discount to actually
sell. We have had some experience selling, trying to sell, a property very close
to a small power line and couldn't get any takers. That was 15 years ago and the
owners still have the property. So, if an appraiser has to give a value for a
property that will sell in a reasonable length of time it will take a deep discount to
get a buyer interested. How much would you pay to build your dream home for
$300,000 to $400,000 looking over a power line, the likes of which are proposed
by NP? Go to Quebec City and look at the towers they have there. If that is what
is in store for NH, it will have a negative impact without question. Also, the
Dannis' land is in the pristine North Country where quite, beautiful country land
with views is greatly appreciated, highly valued and the dominant reason people
buy land here. This is not an industrial parcel where power lines may have
insignificant impact. The Board needs to consider the source of the complaint
and dismiss any charge against Mr. Walker.
• Reply • Share ›

jjb425 • a year ago

Brian Underwood and the entire NH Real Estate Appraiser Board should be
dishonorably discharged. Unfortunately I ran up against the Board for an
appraisal I prepared in NH. After almost two years of fighting them and
requesting numerous times to explain their opinion, I gave in and paid a fine. I
even paid a lawyer to assist me, and he became frustrated with the Board's
tactics. They are truly the epitome of judge, jury, and executioner. I will not
renew my license in NH even though I have licenses in the rest of the New
England States as well as Pennsylvania, New York and New Jersey. I'm not
surprised that Brian Underwood is involved in this scandal.
• Reply • Share ›

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