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School Board Declines $1.8 Million Offer From Island Walk Developer For Old ITT Property

| August 16, 2017

The old ITT building the school board owned starting in 2001, and demolished last year, leaving a 7.2 acre property in its hands in the heart of Palm Coast. (© FlaglerLive)

The old ITT building the school board owned starting in 2001, and demolished last year, leaving a 7.2 acre property in its hands in the heart of Palm Coast. (© FlaglerLive)

Michael Collard Properties, the Winter Park-based retail developer that remade the old Palm Harbor shopping center into Island Walk, just offered the Flagler County School Board $1.8 million for the 7.2 acres on Palm Coast Parkway that were once home to the old ITT headquarters and the district’s adult education operations.

The developer is looking to redevelop the area with shops, restaurants and other retail outlets.

The board said no: not at the moment, not at that price, and not before the district analyzes its own capital needs, toward which it would spend expected revenue from the land sale. Several factors are giving the board pause before accepting an offer.

First, the price. School Board member Janet McDonald thinks the parcel is worth $5 million. Colleen Conklin thinks it’s worth $3 million. Either way, to sell the property the board by law would have to secure at least two appraisals, since the last appraisals—which listed the value at $1.5 million, when it still had the old squat structure on it—were done in 2013 and 2014. The building had been condemned and was razed last April, at a cost of $167,000, in essence lifting the value of the property since.

Second, the district has its own capital needs, Finance Director Tom Tant says, chief among them buying at least three buses for an ageing fleet (each new bus costs $144,000), finishing an air conditioning replacement at Indian Trails Middle School this year and next, for $2.1 million, and installing an ice plant at Belle Terre Elementary that would help lower electric usage costs significantly. Money for that project has not been appropriated. But board members want more clarity on capital priorities.

“We don’t have an immediate need for the parcel, we do have some immediate needs I think specifically in bus transportation,” board member Andy Dance said.

Third, the board wants a clearer inventory of what unused properties it owns and where those might fit in with its school construction plans in the future—whether the parcels may be sold or swapped either to generate revenue or to accommodate eventual construction.

Fourth, the board appears in no hurry to sell what may be its most valuable unused property when property values are rising at an average of 6 percent or more in the county.

“There’s huge value in that piece,” McDonald said during a board discussion about the offer Tuesday afternoon, though she was referring to an outdated appraisal from 2005, when the property was appraised for $5.2 million, $3.9 million and $4.1 million in three separate appraisals. That’s when the old ITT building was still fully functional.

Unspoken in the board’s resistance may be its unwillingness to sell the building at such a great loss. The district bought the property in what was then a poor deal, for $3.5 million in 2001 (or $4.9 million in current dollars). It finally paid off the mortgage last year, after financing it through a bond issue. The three appraisals conducted in 2013 and 2014 came in at $1.55 million, $1.1 million and $1.5 million.

“I’m not opposed to selling it if the price is right,” Conklin said.

“It doesn’t do a lot of people good, sitting,” Dance said: as a public property, the parcel is not contributing to the tax base. “It is a marketable piece so if there seems to be interest, I think it’s probably a good avenue to get the appraisal done and start gauging that interest. We could even go out to an RFP once we get the appraisal back.”

McDonald and fellow-board member Maria Barbosa questioned the need to sell right now, seeing more value in holding on to the property as it appreciates. Once sold, they said, it’s gone.

There was no broader agreement even to conduct a pair of appraisals. “I don’t want to spend money on an appraisal and then find out we’re not willing to sell it for that appraisal,” Trevor Tucker, the board chairman, said. “We’re going to say we haven’t made any determination at this time, is that fair to say? Then we’re going to look at critical capital needs, at the next information workshop, which is a month away.”

The discussion over what used to be called Corporate One mirrored many previous discussions about the property over the years, when the building sitting there at times seemed more of an albatross than an indispensable office or classroom building. Every step in the parcel’s evolution has been fraught with disagreements, hesitation and mixed signals.

On Aug. 10, Michael Chiumento III, the attorney at Chiumento Selis Dwyer who represents Michael Collard Properties, sent a memo to school board members and the superintendent briefly outling the proposal. The memo was especially revealing about Michael Collard Properties’ plans for the area surrounding Corp. One: the parcel acquisition is seen as another big redevelopment, this one in “efforts to redevelop the Kohls shopping plaza,” the memo reads. An attachment projects three restaurants, shops, a bank and a specialty grocer among the planned retail outlets. If all that comes to pass, Chiumento is calculating the windfall, in property taxes to the school board, at $146,000 a year.

The school board will revisit its capital issues and priorities at a meeting in early September.

The Collard Properties Memo and Proposed Contract

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15 Responses for “School Board Declines $1.8 Million Offer From Island Walk Developer For Old ITT Property”

  1. fishflats says:

    Here is another case of a Palm Coast taxing agency with ownership of assets that are not part of their required operating activities. Just like golf courses and tennis clubs. All of these assets need to be identified, appraised and auctioned off to the highest bidder over appraised value. The proceeds from these sales need to be refunded to the taxpayers immediately as a special onetime reduction to their tax bill. We paid for it and we should demand the money be refunded.

    You can see in the response from the school board members and employees that they want to drag their feet and delay until they can find ways to BLOW THE MONEY!

    They have annual budgeting processes to identify their needs and to go get a tax increase if they can justify it and get tax payers to approve it.

  2. John Walsh says:

    Bears and bulls make it while hogs get slaughtered.

  3. Percy's mother says:

    I agree with Maria Barbosa. Why sell now? What’s the rush? Just because a low ball offer has been tendered doesn’t mean it needs to be acted upon.

    Plus, while Island Walk may look pretty, driving through there is a nightmare. If that’s an indication of how Michael Collard Properties would re-develop the ITT / Kohls property, no thanks. Island Walk is just a fancy version of a strip shopping center with a horrendous and dangerous traffic pattern.

    Re re-developing the Kohl’s shopping center, there’s plenty of room in that shopping area for re-development now because there’s nothing there except the Kohls and the out-parcel commercial properties (Verizon, McDonalds, the new dental facility, an auto parts store plus a huge parking lot with not many cars.

    Does the area really need MORE shopping and MORE low-paying jobs?

    Again, I agree with Maria Barbosa and Janet McDonald. I question the haste to make a decision unless there’s quiet money to be made through the back door on a sale, which wouldn’t surprise me.

  4. PCer says:

    Sell it for a fair price. Get rid of it and bring in more businesses to increase the tax base and create jobs.

  5. Layla says:

    In agreement with the ladies on this one. Why should we do a quick sale and then have to raise taxes later because we sold assets under value? Doesn’t make sense or cents.

  6. Toby Tobin says:

    How soon we forget that real estate does not always go up in value. The school district is the steward of our tax dollars. They should not be in the land speculation business. If the district has no imminent need for the land for its core mission – education – then it should return the land to the tax base.

    Board members are not real estate experts and should refrain from making judgment calls based on old data that they are not properly equipped to understand or evaluate.

    By the way, the district also owns a 20-acre parcel north of Yacht Harbor Village. The parcel has remained vacant and untaxed since 1984. It fronts Scenic Byway A1A with over 1,000 feet of road frontage and has approximately 400 feet of Intracoastal Waterway frontage. The “best and highest use” of this parcel is neither a school nor a non-taxed vacant parcel.

  7. Sw says:

    Its only worth what someone will pay for it.Real estste had topped again. Sell it now while the market is liquid. Ominous forboding clouds are gathering off on the horizon for values of any asset class. Flat out exit while you can

  8. palmcoaster says:

    The district goofed back then when they had us the taxpayer pay 3.5 million at today’s values more like 4.9 million, then we need to get our $$ back…I agree with Board members McDonald and Barbosa…that property is prime location! Is worth 5 million or more if we wait. We need at least to get our $$ back. While vacant is costing us anything? If not then hold on to it! Commercial properties in less than a quarter acre are selling for over a million in Palm Coast and not in the center of Palm Coast Parkway! So no way giving it away for 1.8 million! I agree.
    Regarding the parcel mentioned by Tobin on A1A if cost us zero to hold, lets hold it for added value. Maybe one day if other than wasting millions in foreign loosing wars we invest in our own specially our children, we can open a school annex on it were the kids can learn sailing, kayaking and fishing and use it also for affordable summer camps for our resident children and keep them busy and out of trouble. Yes, I know….just dreaming!

  9. Tony's right! says:

    No surprise, but Tony’s right.

    Parcel ID # 07-11-31-7085-00170-0000
    Worth $335,000.

    Wow, how does this benefit education in Flagler? Why do they need to own this land? What is its purpose or intent? Waterfront property? Imagine the multi-millions in lost tax revenue over the past, what, 33 years?

  10. Disgustedin PC says:

    It would be worth it to the city to get it back on the tax roll. And more business is what PC is all about. Sell it and be done.

  11. palmcoaster says:

    Oh yeah Tony ! Appraissed at $335,000 for 400ft water front intracoastal and 1,000ft on A1A , who’s interest are you advocating, which developer? C’mon . My 110 feet on a water front saltwater canal 15 minutes no wake from the intracoastal is appraised at over $120,000. Who do you want to brainwash or prepare the turf for?
    Yeah the multi-millions on tax revenue lost, so they have more to waste in special interest ? The city of Palm Coast is the least costly in our home taxes, the county collects more than double of what the city for what I pay and half of the tax bill goes to the schools. Funny that I pay $40 a year for mosquito control and now as they built some palatial installations and bought an unneeded new helicopter they are missing 1.8 million hindering my mosquito spraying that is the only reason for the mosquito district tax. Collect more taxes for more waste?

  12. palmcoaster says:

    I am concerned over the weekly paper head line of today exhibiting something like “The School Board considering to sel”l that parcel, If true they are defying the wish of the taxpayers living us in the hole for over 4 millions of our taxes paid and wasted on it! What a shame would it be to just benefit the powers that be in Palm Coast and also a developer as usual.

  13. USA Lover says:

    How about some street lights while you’re throwing money around like confetti,golf courses,etc.

  14. Frank says:

    Who would want to pay $3-$5 million for a property that’s across the street from a sewage plant?

  15. woodchuck says:

    Hey, let’s hold out for less.That’s the school board way.

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