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County Is Negotiating Acquisition of Old Hospital in Bunnell for New Sheriff’s HQ

| April 25, 2013

Memorial Hospital Flagler's moribund years may be over if Flagler County and its current owners can agree on a sales deal. The property is listed for sale at $1.75 million. It was acquired in 2006 for $750,000. Its just market value is currently listed at $354,000 by the Flagler County Property Appraiser. Click on the image for larger view. (© FlaglerLive)

Memorial Hospital Flagler’s moribund years may be over if Flagler County and its current owners can agree on a sales deal. The property is listed for sale at $1.75 million. It was acquired in 2006 for $750,000. Its just market value is currently listed at $354,000 by the Flagler County Property Appraiser. Click on the image for larger view. (© FlaglerLive)

For a decade, the old Memorial Hospital Flagler has sat vacant on its sprawling Bunnell grounds between Dr. Carter Boulevard and South Chapel Street. Since it closed in September 2002, there’s been talk of its rejuvenation under different guises: a school, a county administration building, a social services center, a courthouse. Year after year, talk proved idle.

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For the past several weeks, however, County Administrator Craig Coffey has been quietly negotiating a possible deal with the hospital’s owners—Bruce Page, the Intracoastal Bank CEO, Michael Chiumento, the Palm Coast lawyer, and James Newslow, who owns a construction company in Ormond Beach. The trio bought the 60,000 square-foot hospital in 2006 for $750,000 under the corporate name of Flagler Crossroads. It was one of those housing boom investments, but it was completed at the worst point: just when the boom was cresting.

The investment has since somewhat resembled the 33-year-old property, which sits, gutted and decaying, at the edge of Bunnell’s—and Flagler County’s—poorest neighborhood.

But Flagler Crossroads’ fortunes may be turning as Coffey has been negotiating with the group toward a potential county acquisition that would transform the building into the Flagler County Sheriff’s Operations Center’s new headquarters. Because of its vastness, one of the building’s wings could also house several socials service and health agencies and create a hub of such agencies alongside the nearby Flagler County Health Department.

The negotiations haven’t been exactly secret: every county commissioner has been aware of them, as is the sheriff. The public, however, had yet to be clued in.

Craig Coffey. (© FlaglerLive)

The matter has not been discussed at any meeting of the county commission. Asked about it on Wednesday, Coffey would not answer questions about the matter, allowing only that the old hospital is a possible option, and that he doesn’t have a contract yet. Sheriff Jim Manfre declined to talk about what he referred to as a “new option,” without specifying its nature, but nevertheless appeared very pleased by that new option. There are no improprieties here: county and city managers routinely work on deals behind the scenes before revealing them publicly, though when every elected commissioner is in on the issue but without ever having broached it in a meeting, it may sometimes give the appearance of backroom dealing. Nevertheless, Coffey has been leading the negotiations, which have not involved commissioners.

Commissioners expect details possibly at their May 6 meeting. Commission Chairman Nate McLaughlin said the negotiations may have been nearing completion today, from what the administrator had told him.

A Relatively Stiff Price Tag

The asking price to the county, according to Commissioner George Hanns, is around $1.5 million. Commissioner Charlie Ericksen heard a figure closer to $1 million, while Commissioner Frank Meeker heard that “it was on the market for $3 million.”

Maybe it was at one point, but currently the asking price on the open market is $1.75 million. If it were to sell for $1.5 million, it would represent a 100 percent profit for the Flagler Crossroads trio. A $1 million sale would yield a 33 percent profit–a handsome sum for any property bought at the tail end of the housing boom. (Update: the two parties agreed to a $1.23 million purchase price.)

There's quite a bit of work to do. Click on the image for larger view. (© FlaglerLive)

There’s quite a bit of work to do. Click on the image for larger view. (© FlaglerLive)

The property’s just market value, according to the Flagler County Property Appraiser, is currently set at $354,000, less than half its value when it was last acquired. The property’s tax bill amounted to just under $8,000 last year, down from $33,000 the year the consortium acquired the building. Flagler Crossroads has paid $136,000 in local taxes since. The figure doesn’t include what demolition and maintenance costs it spent, though the building has been stripped from within (which is one of the reasons it’s attractive to the county: the stripping enables more flexible refurbishing). If the county were to acquire the property, of course, it would be removed from the Bunnell, county and school tax rolls.

But the building also appears to be the best compromise that may gain the favor of county commissioners and the sheriff, who have not been able to come to terms over a new operations center since Don Fleming was sheriff (Fleming was opposed to a move to the hospital property).

The Sheriff’s Needs

The county is looking to build a new jail and to provide bigger, more modern space for the sheriff’s operations center. Until the hospital property became an option, it had three others: leave the operations center where it is at the end of Justice Lane, a twisty road in Bunnell’s boonies. Move the operations center to the annex of the old courthouse in downtown Bunnell, where the sheriff would then have to share the building with Bunnell’s City Hall (Bunnell acquired the building earlier this year). Or build a new operations center on the site of the old county jail, across from the Government Services Building and State Road 100.

Staying in the existing operations center is untenable for the sheriff. The two other options had some support among commissioners, but not a plurality. Coffey needed to come up with a compromise. The hospital property proved to be as close to one as he found. Commissioners, with some reservations, are supportive for many reasons: it would centrally locate the sheriff’s office in Bunnell, next to South Bunnell and near Bunnell Elementary. It would enable the mixed-use of the building for other agencies, including, for example, the extremely popular free clinic run by a Bunnell non-profit. It would be a one-level building—important for the sheriff—and it would have ample parking (166 spaces), which the old courthouse option does not have.


“So for a lot of reasons it’s a much better deal,” Commissioner Barbara Revels, a Realtor and builder, said, “and we hope—I don’t know what the final number will be—it will be obtained at a very good price for the county, making it per square foot one of our lowest cost buildings for the county.”

The acquisition would also help revitalize downtown Bunnell by bringing the activity–and employees–of the sheriff’s office to a more central, urban location, while giving Bunnell full reign over its courthouse acquisition.

“That has been my goal as far as Bunnell goes, to get them to complete the courthouse complex for them to get some long-term visioning,” McLaughlin said. “This will give them the opportunity to own all of it, and to have some self-determination there,” as opposed to having to share the building with the sheriff’s office. “I think I’m more excited for Bunnell than I am for the sheriff.”

Like Revels, McLaughlin was especially enthusiastic about the possibility of a deal, especially with its tie-ins to other agencies. “The free clinic, absolutely, if we can make that work, that certainly can work in my mind,” McLaughlin said, “and I believe the sheriff could be amiable to those possibilities over there. So my feeling is it’s a good thing and makes use of existing property that’s just there and becomes blighted after a while, so it’s a good move for the county, a good move for the sheriff. It’s an all around win-win.”

Good Old Deals

Depending on the price, commissioners would also have to contend with the perception that they’re using public money to bail out Page and Chiumento, whose political connections run deep. Commissioners weathered blistering criticism when, in 2010, they agreed to a complicated and expensive deal that bailed the defunct Ginn Development Co. out of land it couldn’t build on anyway, using public dollars from the Environmentally Sensitive Lands coffers—and depleting those coffers along the way. Commissioners are already anticipating the questions.

“It seems like in Flagler County there’s going to be certain people who are involved in a lot of different things, they have their investments in various areas,” Commissioner George Hanns—also a builder—said, “so anything that comes up of any significance some of those people will be involved. It’s not necessarily a good old boys’ thing.”

Page is traveling and did not respond to an email. A message was relayed to Chiumento requesting a comment on the potential deal.

george hanns flagler county commission member flaglerlive

George Hanns (© FlaglerLive)

Hanns said he was approaching the deal from a position of skepticism. He recognizes its value and its good location, its usability for many purposes, but he wants to see its interiors and judge for himself. “You’ve got to show me that this thing is worthwhile. I certainly am not committed to it, I can tell you that, and I’m not convinced that the selling price is really worth it,” Hanns said. He was comfortable with Coffey’s approach. “He may be working on a contract but it’s not official, he’s not gotten a go-ahead from the board at all,” Hanns said. “We wanted pretty much an offer that’s to be made in final form, and then we negotiate from there. So he’s just doing what he’s expected to do, do all the preliminaries.”

Ericksen put it this way: “My concern would be any building that’s been closed up for as long as that and what the elements here in warm Florida have done to the location. I would think an offering price would be based on a complete inspection of the building, any contaminants in the building, any mold in the building, and so forth. The county did the same thing before they made an offer on the Plantation Bay project. The thing may be worth nothing if it’s deemed that it has to be torn down.”

Boomerang

Meeker has had direct conversations with Manfre about the need for a new jail—and a new operations center. “My key is, if I’m going to retrofit a building, I have to retrofit it to meet 21st century needs,” Meeker said. The hospital building offers those opportunities, he said, because it’s already been gutted, it’s already been cleared of asbestos, and there wouldn’t be an issue of hidden nooks and crannies or mysterious electrical wiring. “The cost of bringing in new wiring, partitioning the rooms, you have more flexibility, and the cost should be lower because of that,” Meeker said.

The building’s current ownership should not be an issue, Meeker said. “I can’t help that Page and Chiumento bought it a while back,” Meeker said.  “Somebody owns it, and if we can’t get a good deal out of it I don’t care who owns it.” Meeker said he wouldn’t sell his house at just market value, either, and wouldn’t expect the Flagler Crossroads trio to do so.

In 2002 the county considered moving its offices into the complex. Hanns said he had suggested that the county obtain the building at the time, when it was under different ownership. “They were going to sell it to us for $2.5 million,” Hanns remembers. “Nobody went for it, they didn’t think it was a good investment, the county constitutional officers were all opposed to it.”

Instead, and under pressure from then-Administrator David Haas and Superintendent Bob Corley, voted to build what became known colloquially as the Potato Palace—the immense administration building shared by county and school board offices, at a cost far exceeding original estimates. Haas was subsequently fired and Corley left as the school board was preparing to fire him.

In 2004, the old hospital was the wishful site of two charter schools run by Academies of Excellence, the embattled company whose schools under various guises found another location in Bunnell, only to be forced to close last year, by the school board, for having failed state standards two successive years. The building was also briefly considered as the county’s next courthouse before a new courthouse was built.

 

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42 Responses for “County Is Negotiating Acquisition of Old Hospital in Bunnell for New Sheriff’s HQ”

  1. johnny taxpayer says:

    “If it were to sell for $1.5 million, it would represent a 100 percent profit for the Flagler Crossroads trio.” This statement is completely inaccurate. The article itself points out the owners have paid $136k in property taxes, that doesn’t even factor in any interest or other holding expenses that go in to owning any type of property, especially something of this size. Even if the property does sell for $1.5mil, the actual profit will be significantly less than 100%. I don’t point this out to pick on the author, I point it out because regrettably a great many individuals lack even a basic understanding of what “profit” actually is.

    • anon1 says:

      A business or corporate entity that pays $136k in property taxes and does not recoup any income off of said property, in fact is able to show a loss on their IRS tax returns – may have been a strategic move for them.

  2. Magnolia says:

    Once again Flagler County is paying millions for property not worth millions. How much will it cost to rehab the building?

    And why is all this being kept hush hush? Nothing surprising coming from a government body known for this. Maybe time to request a state investigation?

    Mr. Meeker, you are involved in too many of these boondoggle deals paying millions to local developers. We elected you to look out for the taxpayers, not the rich guys.

    • BOB S. says:

      THATS WHY IT’s important to vote in local elections please people COME OUT AND VOTE”REMEMBER THE FISH STINKS FROM THE HEAD DOWN’ LETS VOTE ALL OF THEM OUT.

  3. confidential says:

    One more reason why County Manager Coffey is proposing to to increase our taxes.

    • Magnolia says:

      Confidential: You mean the same Craig Coffey who saw to it that his own contract was renewed without discussion or a vote?

  4. umm says:

    Am I the only one who thinks this is a completely crazy idea?! I would certainly not purchase a house appraised at $354,000 for $1.5 million…what gives the county the right to spend our money on such an asinine purchase!?

  5. Mel Bronson says:

    If country proceeds and purchases this decaying property, it (YOU!) will be on the hook for many MILLIONS of dollars to essentially rebuild this hulk.

    And the police will want everything state of the art with the most deluxe features. Taxpayers will be called upon to pony up the treasure to make this structure compatible with the latest demands, needs and vanity of the police department.

    Remember how the county fared with the Taj Mahal Country Clerk & Court House Justice Building in Bunnell. The millions of taxpayer dollars just kept pouring into the hole in the ground. This police project I predict will follow the same expensive over budget path.

    Better buckle up taxpayers, it is going to be a very bumpy ride. I hope the public speaks up and declares no new taxes! The unrepentant politicians and officials only want to spend us all into bankruptcy.

  6. Kip Durocher says:

    bought for $750k in 2006. plug in what all the rest of the county and state real estate market has been doing it is worth about $440k. having been in the building many times (my room had two leak buckets in it) before it was closed up it would now need to be refurbished which could run well over a couple of million.
    that is if it should not just be condemned. the whole roof leaks everywhere, mold must be rampant.
    whole thing sounds like another coffey fiasco with a spritz of manfre on top.
    yesterday county is millions in hole and today the “good old boy network” is going to bail out some local players who bought a lemon when the good times rolled. junior bobby ginns?
    100% return on real estate bought minutes before the collapse in this county with current economic conditions is just a pure rip-off of the tax payers. shame on the commissioners ~ they need to tighten the leash on the county manager and his Peter Pan pipe dreams.

  7. Moe Syzlak says:

    Hopefully if they get this building they’ll just take over the Bunnell Police. Bunnell seems to be the laughing stock of the law enforcement community. My friends who work for Flagler say they a few good officers but for the most part they’re a joke.

  8. Think About it says:

    Isn’t that building full of asbestos? If so, then wouldn’t it have to be condemned?

  9. tulip says:

    And how much is it going to cost to renovate it up to code? Has this building been thoroughly inspected by an independent inspector? Just because a building has been gutted, there is still a roof, walls, foundation, etc. Will the county hire local contractors to do the work or use Newslow who is the construction owner and part owner of building.

    I hope this is thorougly looked into. While the idea in general is good, the TOTAL cost may be way to high, especially where the initial price is way over the value of the property. JMO

  10. Ol' Sarge says:

    Well this article is a hoot, considering it should be a follow up to the previous article about the EIGHT MILLION DOLLAR SHORTFALL this county is suffering.

    I have a great idea, lets continue NOT giving raises and much needed equipment and staffing to public services (fire/police) and buy old buildings at a 100% markup.

  11. confidential says:

    I really hope Sheriff Manfre will stay away from this intended deal in order not to tarnish his good record since he took office!.
    This trio have made enough wealth around here…look at the main office building in Town Center. If the appraisal is $354,000 why to pay 1.5 million? Another hole in the ground intended to be acquire by the county with our hard earned taxes.
    If the trio over paid for that property is not our fault…most that did then, lost their homes/businesses to foreclosure. The fact that Page and Intracoastal Bank partially or totally funded the original purchase for $750,000 is not our fault, wait for the turn around.
    If county manager would not be trying to raise our taxes with the excuse that county is broke and the funds were available would be a different story, but for a realistic price not 1.5 million while is appriassed at 25% of that.
    I seriously believe that some of these deals when county and cities are overpaying local developers/land owners with “supposedly scarce public funds”, while claiming budget restrains at the same time demanding to rise our taxes, should be brought up to the Feds and FBI’s scope

  12. r&r says:

    Is Coffey and the rest of those county idiots nuts? A couple days ago they’re whining because they’re short 8 million dollars and want to raise taxes.. Why does’nt the sheriff move into that Taj Mahall they built and sit half empty?? This county board is out of control and needs to be reeled in.. No wonder no one wants to move here..

  13. slyfox says:

    I can’t find the right words to express the disgust I felt after reading this article. Let the rich get richer off the backs of hard working people. Our water bills have gone up, threatening to raise our taxes (don’t forget about the school tax going up too ), the Taj Mahall ..oh & don’t forget about the building they sold to Palm Coast Data, so now the county has to PAY to rent offices. Plus, we have a deficit. Purchasing that building for that amount is ludicrous there needs to be a THOROUGH INSPECTION AND THAT INSPECTION REPORT NEEDS to be available to everyone in this county. I’m not against the Sheriffs office getting a new place… but lets use some common sense, if that is possible? Its getting to the point where we can’t afford to live here.

  14. Diego Miller says:

    Coffey has kept his foot on the accelerator, ignoring all the caution signs, hold on for a wild ride with this loose cannon.

  15. Robert says:

    Neither article I’ve seen online alludes to the history of this hospital. The photos of this abandoned building are haunting, and they offer a glimpse into Bunnell’s past. I feel we are sometimes too conerned with current events and politics, and we turn a blind eye to detail and history. But I admit there is barely any mention of this hospital on Google. I’d certainly like to hear more about this place. FlaglerLive, what do you say?

  16. Realty Check says:

    I think 1.5 million is outlandish to say the least, are the offers pouring in, and are we in a bidding war for a hot parcel of property, NO we are not. Offer the seller less or walk away, would you pay more for a house in your personal life? Do the right thing here commissioners. If this type of deal goes through then it is time for a special election to oust the county commission board all at once. You can not spend what you do not have, especially when you are already 8 million short to start with. I think maybe our commissioners needs a basic math skills review test here, the only ones getting a good deal are the trio of owners and the person brokering the deal. I do not care if the Sherriff needs a new facility or not, I do not care if inmates are bunking together, they are inmates who gave up their rights when they broke the law. When the county has the money then we can discuss the possibility of expansion or relocation, until then make it work as is.

    • Nancy N. says:

      “I do not care if inmates are bunking together, they are inmates who gave up their rights when they broke the law.”

      Actually, most county jail inmates are in pre-trial detention, meaning that most of them have not been convicted of anything, and some will never be.

  17. Elana Lee says:

    A better idea that possibly everyone could get on board with is this: Flagler County Sheriff’s Office is a non-profit 501c3. Flagler Crossroads could donate the property to them – at the asking price of $1.5 million. That is yet another tax write off for Flagler Crossroads, and of course reducing any capital gains they might otherwise have if they sold it. It also eliminates their annual tax burden. Further, this donation would serve as an outstanding “in kind” match for grant funding for years to come that the FCSO can apply for. Once the “bricks and mortar” is in place (as it already is with this building), there is grant funding available for rehabbing the facility. Think of the possibilities of $1.5 million in grant funding to the existing structure.

  18. Charles Gardner says:

    Eyes wise shut, again.

  19. Jan Reeger says:

    I am shocked by the naysayers. This is a terrific idea. There is a need and the location is great. For those who like to do the math, take $1.5 mil and divide by 60,000 sq. ft.. Paying $25 per square foot is better than building a new facility at say $150 per sq. ft. without the land. And if I recall correctly from the “rumor mill”, there has already been remediation work done to the interior. I have been more irritated by the outlandish dollars spent on some ESL acquisitions. This purchase is sensible is so many ways.

    • Realty Check says:

      @ Jan, you are corect, but you cannot spend money you do not have, right now the Sherriff has to make due until the county can find revenue. Just because something is a good deal does not mean you should do it, if a car the costs $40,000 is on sale for $25,000 its a great deal, but if you don’t make enough to pay for it sorry you cannot have it. This is simple math, the county is at an 8 million dollar short fall, how can they even consider a new dept at this point. If the old building is not falling down then the Sherriff has to make it work until finances turn around in the county, financial moves such as these will not only make it harder to balance the budget, it will be impossible.

  20. tulip says:

    @Jan Reeger, don’t forget to add in the cost of all the renovations and that everything would have to be built to the present code. That will be extremely costly. Also what about inspecting the roof, foundation, walls etc. I, too think the idea in general is good but the asking price in retrospect to what they paid and what the market value is, is too much..

    By the way, didn’t the county GIVE the old courthouse, or part of it, to Bunnell? What is that going to be used for? I don’t know the square footage or much else, but couldn’t that be used for the sheriff’s headquarters?

  21. Diego Miller says:

    As someone who is familiar with this building. I submit this building is contaminated with mold and has obsolete infrastructure, ie bad wiring, outdated HVAC , mechanical etc. To invest our money in this sink hole will one day be called Coffey’s Follie. The Sheriffs have a great location with plenty of room to build new additions as needed.
    Mr Coffey enjoys making the local rich guys richer from our wallet.

  22. Kip Durocher says:

    what we need is for the county commission to have a “meet and greet” at the old building. then the citizens who are going to foot the bill for this over priced deal can be shown, by their county commissioners, just what a great building and bargain this will be. all the benefits can be explained on site in the building. come on commission ~ have mr. coffey set this up. and how about two fair market professional appraisals done by an appraisal firm from Miami and then another from Tampa. no local firms who may reflect undue local pressures. hear is a chance for some real “voice of the people” participatory government. real input to our leaders from those being asked to pay for this and more. those with no fears in this deal should jump aboard this idea with gusto.
    if this is rammed thru with no more oversight than presently has occurred then I would have to agree with the posters who have pointed out the need for a federal and state legal review of all the key players, their personal and professional relationships and their ability to make informed, unbiased decisions in this matter.

    • Doug says:

      I don’t care what they payed for it or didn’t. Wake up and smell the Coffee. Tighten your belt Flagler County like the rest of us. 8mil short and your still spending!

      Does anyone feel there is a kick back floating around?

    • Anonymous says:

      The current Sheriff’s Administration cannot seem to make up their mind on this relocation. Under Fleming they had all the plans laid out to move into the old courthouse. Then that falls through and Manfre comes on board. First they were going to move into the complex behind Walmart, then it is the Government Services building, then it’s lets building and now it’s this. It seems like the County does not want the FCSO in their building. What’s up with that? I understand that the top floor is mostly vacant. The workers at the Sheriff’s Office already work in a building that makes them sick. Sure let’s move them into another one just like it.

  23. Think About it says:

    Even a 5th grader is smarter than this !

  24. confidential says:

    @ Eleana Lee great suggestion.
    Crossroads should donate that building to our sheriff Department and have their trio name on the building for history’s to show. Imagine “Chiumento, Page.& Newslow Justice Center” then county looks in grants for the 1.5 million to start renovations, the sheriff contributes with all ticket fines and forfeitures revenues and then we the tax payers contribute the rest with for non profit state and federal grants. We have a county attorney that is also an expert in grants…right Mr.Hadeed? That will be the greatest gesture this trio could offer to our county, given the success that all of us help them to achieve in the past 30 years in Flagler County… always that reality could offset greed!

  25. Initialjoe says:

    I think it is a great idea…but that’s way too much money to offer!!! Offer them what it’s worth or let them keep it as a decrepit building…no skin off the taxpayers teeth.

  26. Rain says:

    Are you kidding? The old hospital is in as bad a shape, if not worse, than the Old Courthouse. We, the taxpayers, have been footing all the bills for the Old Courthouse since 2007, well over 1 million dollars and counting. It could have been demolished for 500,000, but no, we need to keep it. For what!? We have been told that the Sheriff is moving there, that was 5 years ago. Now we get to sink more money into another rat hole! Brilliant!

  27. Ogreagain says:

    With the added traffic you will need to wided SR100 to 4 lanes and a turn lane with a traffic light. i hope the county thinks about that part. it’s also to close to a school if something did go wrong. I’m all for a new building i just think this is a bad place to put it, no matter the price

  28. Mel Bronson says:

    What is that awful smell? It is the smell of an inside payback at taxpayer expense going down. The original purchasers made a strategic error purchasing this dinosaur and now are squeezing the country to buy it from them and take it off their hands. Let the ignorant and gullible taxpayers be on the hook for this dangerous, obsolete building is that these politicians are thinking as they screw us over, big time!

    This asbestos riddled OBSOLETE building has no redeeming value as a structure. It has no value and is actually a negative. It must be torn down at owners expense and only the land will give any value. The police will need a totally different building with a different layout design and flow for efficiency, security and unique police needs.

    The county has NO BUSINESS BUYING THIS BUILDING! Write to all politicians mentioned in this article and your representatives to stop this purchase.

  29. bill says:

    Not a good time to buy anything, county needs to stop spending and get the ducks in a row

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