In Knotty Deal, County Agrees to 980-Acre Buy from Ginn Co. for at Least $3.25 Million
FlaglerLive | September 8, 2010
Should the Flagler County Commission use taxpayer dollars in an expensive, speculative deal over environmentally valuable land? That’s the question at the heart of a proposed transaction that stumped and divided the commission in six hours of debate spread over two meetings.
The commission finally voted 4-1 to offer to buy the property in a two-step process, either for $4.5 million or for $3.25 million, depending on the land’s potential as a wetlands credit bank. After the commission took that vote (just before 3 p.m.), it recessed literally to enable a lawyer representing the land owners to negotiate the matter with county staff, as the seller would potentially lose $500,000 from the initial plan the county administration had negotiated. But the seller agreed.
- Burned Just 4 Months Ago, County Cooks Yet Another Risky Deal With Ginn on Public Dime
- How Ginn Corp. Stuck Flagler Taxpayers With a $2 Million White Elephant
- It’s Raining Taxes, Cont’d: Behind Scenes, County Manager Floats Sales Tax Increase
The land in question is a collection of eight parcels totaling almost 1,000 acres, belonging to the Ginn Co., and located in what’s known as Pellicer Flats to the northeast of the county. The beauty and quality of the land is not in question. Nor is its environmental value. What its monetary value is, current and future, and how much the county should pay for it, was in question.
Most of the land is not buildable. Two appraisals conducted with information provided by Ginn put the value of the complete acreage at $4.1 million and $4.6 million. The county property appraiser put the total value at $524,000. Part of the disparity is attributed to how appraisals are done. The county appraiser evaluates its current value, based on its zoning. The property owner goes by “highest and best use,” not necessarily based on its current uses, but on potential uses and values. One of those alternative values is the land’s potentially lucrative use as a freshwater and saltwater “mitigation bank.” If the land is turned into freshwater and saltwater wetlands that would be preserved in perpetuity, developers elsewhere can demolish wetlands in exchange for credits they’d buy from the Pellicer property. The credits can range in value, from around $100,000 for freshwater credits to double that for saltwater credits, though the actual price is market-driven.
There are no guarantees either that the land can be turned into a mitigation bank, or that the bank could yield high prices. The credits could take decades to be sold. If the mitigation bank is viable, and the county owns it, the county can then use the revenue to buy more environmentally sensitive land. If the mitigation bank isn’t viable, the county has depleted its environmentally sensitive land money for a long time. That money is generated through a modest property tax voters approved in a referendum.
The potential depletion of those funds was only one of the reasons some commissioners were weary of the deal. Paying too much for the last three parcels the county acquired out of the environmentally sensitive land program’s money was another reason. Commissioners don’t want to get burned again. Speculating with public dollars is yet another reason. Doing so with the Ginn Co. at the opposite end of the deal—the same Ginn Co. that dumped the county earlier this year after the county made a $2 million commitment to the company in the form of a building it built for it at the county airport—is yet another reason.
In the end, the commission agreed to close on the entire property immediately for $2.25 million, with either an additional $1 million or $2.25 million due the seller, depending on whether a mitigation bank is successful. Here’s how it would work: After the two sides close on the 980 acres, the county places $250,000 and the seller places $100,000 (down from $250,000 originally proposed) into an escrow account designed to develop the mitigation bank. It takes time to develop such a bank. In 24 months, the county pays Ginn another $1 million, even if the mitigation bank is either not achieved or not developed by then. If the bank is successful, then the county agrees to pay an additional $1.25 million to Ginn, over time, with money generated from mitigation credit sales.
It’s complicated. It’s also a new sort of land deal that has not been tested before. There’s still risk involved: nothing says that the minimum $3.25 million the county agreed to pay, not counting the additional $250,000 paying for the development of a mitigation bank, will match the value of the land. But environmentally, advocates for the land deal, including several members of the county’s sensitive lands’ advisory committee (which voted unanimously to recommend a different version of the deal commissioners approved), the 980 acres are seen as an invaluable connection of a ecologically pristine corridor along Pellicer Creek.
Commissioner Milissa Holland opposed the deal because of the cost and its connection to Ginn.