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In Knotty Deal, County Agrees to 980-Acre Buy from Ginn Co. for at Least $3.25 Million

| September 8, 2010

pelluicer creek

Uncharted waters. (Cat Smith)

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.

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.

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7 Responses for “In Knotty Deal, County Agrees to 980-Acre Buy from Ginn Co. for at Least $3.25 Million”

  1. Kip Durocher says:

    Congratulations to Commissioner Holland for her insight and wisdom to see through yet another Ginn Corporation smoke screen.
    Sadly, the other members were hoodwinked by Ginn and their pitchman Craif Coffey.
    I hope this does not go the same route as other “good deals” this board has made with Ginn.

  2. emile says:

    I have been in these wetlands and they are a “Pearl beyond Price.” If the county didn’t buy them, someday, somehow, a developer would figure out a way to build there. After all, a large part of Palm Coast was a big wetland in the 1960s.

  3. Law Dawg says:

    I find it extremely hard to believe that this property has nearly TRIPLED in value since Ginn purchased it in 2003. Yet the majority of the commission agrees to fork out millions based on “speculative” appraisals at best. With thousands of DRY acres yet to be developed in the county, our leaders feel its necessary to go out and buy swampland. Unbelievable waste of funds and the county administrator obviously missed his calling. He should be in SALES. Any one else have any swamp to sell, just call Flagler County. Thanks for the intelligent effort Ms. Holland

  4. Dorothea says:

    I am not against purchasing swampland with those funds that the county taxpayers appropriated for perserving environmentally sensitive land. This “swampland” is environmentally sensitive. It’s the outrageous price that the county has agreed to pay that I object to. I also object to buying the land in a complicated deal from a seller who has already proven that he will back out through some legal loophole, leaving the taxpayers high and dry from their environmentally sensitive swampland, unless of course, they pony up even more money.

  5. Dick Ricardi says:

    I can’t believe our County Commissioners are so inept that they could not negotiate a super deal with someone who has already ripped taxpayers for big bucks and is now himself deperate for cash. Are we going to get back any of the money he owes us for past deals. We all want to protect environmentally sensative land but this idea of using it for a land mitigation bank only provides an avenue for developers to destroy wetlands elsewhere. This whole mitigation process is just a clever way to get around wetlands protection laws.


    Let GINN continue to told it for a few more years…no one else is going to buy it and maybe in 5-6 years the county will have the funds to purchase it….there is no reason to rush into buying it now. The county needs to save every dollar it has right now….while protecting this land IS important it is not a prioity right now

  7. Liana G says:

    What happens if the mitigation bank never develops? Does Ginn gets to keep the money paid in so far, and still keep the land too? Because the bank never materialized and they did not receive the full payment agreed upon?

    What is the time frame for this mitigation bank to be develop? And for Ginn to get their money?

    Forgive me if I seem clueless but that’s because I am.

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