County’s $3.5 Million Gamble on Pellicer Flats Raids Credibility of Land Program
FlaglerLive | September 26, 2010
By Don “Toby” Tobin
I’ll think twice before voting for the next continuation of the millage tax to replenish the Environmentally Sensitive Lands Fund. Flagler County recently went “all in” when they decided to purchase Pellicer Flats–more than 900 acres of mostly wetland from Ginn-LA Hammock Beach Ltd. (Bobby Ginn and financial partner Lubert-Adler).The county is paying at least $3.25 million for property assessed at just over $500,000. It’s a bad decision for several reasons. Foremost is the bet the county is making that the property can be converted into a wetland mitigation bank in the future.
Mitigation banks are established so that developers whose project plans require the loss of some wetlands can “offset” that loss by buying mitigation credits from a mitigation bank. Mitigation credits are assets. They can be bought and sold.
- In Knotty Deal, County Agrees to 980-Acre Buy from Ginn Co. for at Least $3.25 Million
- 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
The $3.25 million purchase price was predicated on a value placed on the land as if a mitigation bank were already established. There is no guarantee a mitigation bank will be approved by the state and the Army Corp of Engineers. If one is approved, there is no guarantee there will be a market for mitigation credits at that time.
The county is taking a gamble. And it’s our money backing the bet. Risk taking is an appropriate behavior for businesses. They’re in a risk-reward world. It is less appropriate for governments. If the county believed that the land should be purchased, they should have held out for a much lower price, taking the mitigation bank gamble off the table.
Another reason I don’t agree with the purchase is that the property is mostly wetland with difficult access. The cost to develop it would be so high as to practically assure it will never be developed. The goal of preserving environmentally sensitive land will be accomplished by the circumstances.
Thirdly, the county’s purchase takes the property off the tax roll. Effectively, we are taxed twice; first to collect the environmentally sensitive land funds, and second, to compensate for the loss of taxable property. In private hands, Pellicer Flats continues to generate tax dollars. If an owner succeeds in the pursuit of a mitigation bank, the assessed value will be raised accordingly, further increasing tax revenues.
Lastly, such a business transaction between the county and the Ginn Company at this time should have been avoided. They are in an adversarial position as Ginn appeals a County Board of Commissioners’ decision denying a Ginn request for a zoning change at Hammock Beach. In denying Ginn’s request, the Board overruled the county administration wholehearted recommendation for approval. The administration’s support of Ginn’s plan coincided with discussions they were having with Ginn over a possible Pellicer Flats purchase. However benign that coincidence might be, it provides unneeded fuel to prospective conspiracy theorists.
I’m amazed that such profligate spending raised barely a peep while a modest quarter mill attempt to fund our economic development program will likely be shot down at the upcoming election. Somehow an extravagant gamble in the name of environmental sensitivity is more acceptable than an economic development project that would create jobs and ultimately help offset future residential property tax increases by shifting more of the tax burden onto commercial and industrial properties.
Don “Toby” Tobin, an expert on the Ginn Co., owns GoToby.com Realty and publishes GoToby.com, where this piece originally appeared.