REI has some very functional and inexpensive tires. Just get a matching set and mount 'em up. Less than $30 for a pair of these. Get a pair of the 28mm ones to be more suitable for a Crossroads...

http://www.rei.com/product/724618

Sadly I have to agree that if you're just doing this to sell the bike then you won't see your money back or at least not much of it. Mind you if you mount up the new tires and go for a test ride maybe you'll change your mind....

At least new rubber will make you more likely to sell it easier. And mismatching tires will often turn a casual buyer away so it's best to just bite the bullet and go with a matching set.

I find it odd that the bead would be damaged like that and yet there's no other issues with the rest of the tire. The "red" rubber used on Specialized Armadillo tires isn't really the soft gooey and highly perishable stuff found on the old gum wall style so to see it torn like this makes me wonder if at some point the bead was mounted using something that cut into the bead support fibers. Like mounting with a screwdriver or other less desireable tool.

How does the sidewall and rest of the tire feel? Grippy and pliable or sort of "plasticy" hard and slippery and if you flex the tire it sort of makes soft crackling sounds? If it's hard and crackly that indicates that the rubber is badly perished and would support the idea of the bead failing like that.

In the end it's a moot point anyhow. What you see is what you get. The LBS that sold you the bike may or may not offer up some sort of option to help out be it from a straight up replacement to a reduced price on a replacement to just shrugging their shoulders and telling you that 3 years is a tire's lifespan and to get over it. And truely ridden or not 3 to 5 years is all any of us can expect before the rubber degrades badly and stuff like this happens. I've got tires that are a little older but my bikes live in the cool and generally dark basement away from higher temps and sunlight. But even then the ones that are up around 5 and 6 years old are getting pretty crusty.