Fearful of Scaring Buyers or Undervaluing Property, School Board Haggles to $2.3 Million Price for Corporate Building
FlaglerLive | February 19, 2015
Forced out of the massive, squat, 52,000-square-foot building (43,000 rentable) that housed its Flagler Technical Institute offices and classes because it was not up to code, the Flagler County School Board spent the better part of the past year trying to figure out what to do with the building—refurbish it, mothball it, demolish it, or put it up for sale. Meanwhile, the building is costing the district $70,000 a year just to maintain the building. The board now finds itself in the paradoxical position of attractively advertising the property for sale after it was essentially condemned as a school facility.
On Tuesday, after an unusual series of failed votes that amounted to a haggling session over the minimum asking price, the board set that minimum bid price for the building and its surrounding acreage at $2.3 million. The board bought the building in 2001 for $3.5 million.
The county property appraiser has the building value set at $1.7 million and the land valued at $1.56 million. James Cooksey, who appraised the property for the board, concluded earlier this month that the land and the building had a combined value of just over $2 million, based on the highest and best use of the property. What Cooksey called “excess land” at the site pushed the value of the entire property yup: the building has “excess land there that can be developed,” he said. But making comparative calculations is tricky.
“Just because Dollar General or a shopping center purchased 3 acres down the street, those same economic will not apply necessarily to the site that we have,” Cooksey said. “Not a lot of land being bought. That’s the other challenge.” He went as far as New Smyrna Beach, Daytona Beach and Ormond Beach to study sales before arriving at a bottom line value.
The bids must be in by May 18. The board will accept or reject bids at its June 2 meeting, assuming bids are submitted. Nothing forces the board to accept those bids.
Board member Janet McDonald was uneasy with Cooksey’s bottom line. “I just think from location, location, location,” she said, “this would be great for the buyer. If we’re stewards of the public property,. The asset for the district, I think the valuation doesn’t reflect what happened at Palm Harbor Shopping Center, the valuation of that property, and the limitations of that, the hospital property, which is regarded in the county as a great deal. I think this property has higher value than what we’re seeing.” (The county has had an easier time buying private property than selling its own, however, as its eight-year attempt to find alternative uses for the old county courthouse indicated. That building was also costing taxpayers $70,000 a year to maintain. The county just agreed to lease it out to a private school, but in exchange for an interest-free loan of $375,000 to help the school refurbish the building.)
McDonald didn’t want a bid floor for the corporate building lower than $2.3 million. Board member Trevor Tucker disagreed.
“I feel like we don’t set the bid at the highest number because we want people to bid,” he said. “I also feel that we need to sell this property. If we don’t sell this property, we have $70,000 carrying costs every year. How many years does it take before we are now negative? I believe the building has value. Personally I’d like to see it set at about $1.8 million, which is below his, but that gives people a chance to bid higher, at least $1.8 million.”
Tucker also dismissed notions that the property would keep appreciating over time, since, he said, in 2004, no one would have predicted what took place to real estate values five years hence (or rather, few people did.)
That started the formal haggling. Board member Sue Dickinson, who was taking Tucker’s lead on the matter, motioned to set the bid floor at $1.8 million. Tucker seconded. “It’s our low bid, like he said, we don’t have to accept it, let’s get this party started,” Dickinson said.
“I don’t believe it makes us look like we’re stewards of our assets for the community,” McDonald said.
Citing previous instances when the school board walked away from valuable property, Board Chairwoman Collen Conklin said she was concerned “about the message that sends to the community about the value of the property, and therefore what kind of buyer you might attract,” she said.
The motion failed, 3-2.
Andy Dance moved to set the floor at $2.3 million. He got no second. The motion failed. Tucker, referring to his motion as a “bid,” proposed $2.1 million. Dickinson seconded. The motion failed, 3-2, by the same earlier margin: Tucker and Dickinson for, Conklin, Dance and McDonald against.
“Oh, this is really fun,” Dickinson snapped, “talk about making ourselves look like a bunch of idiots. I mean, come on.”
“Not necessarily,” Conklin said. “I think everybody is entitled to their opinion. Is there another motion for the table?”
McDonald motioned for $2.5 million. Conklin passed the gavel to Tucker and seconded the motion, hearing a lack of support for that sum.
Dance, the swing vote, said he feared $2.5 million was “pushing it. I’m comfortable with where we are before,” he said, meaning $2.3 million. McDonald’s motion failed, 3-2.
Conklin motioned again for $2.3 million. This time the amount got a second—Dance’s. The motion almost failed: Dance and Conklin voted for. Then there was an eternal pause of five seconds, eliciting a disbelieving laugh from Tucker and a “oh for the love—” from Conklin before McDonald broke the stalemate and gave the third vote.