For the second time in 10 months the Flagler County School Board turned down an offer for its 7.2-acre property on Palm Coast Parkway, site of its old adult education building, even though the $2.5 million offered was $500,000 above the highest of two appraisals of the property.
The board split 2-2 on the offer from Michael Collard Properties, the Winter Park-based retail developer that had offered $1.8 million last year. A split vote is a failed vote. (Board member Maria Barbosa was absent Tuesday evening.) Michael Collard Properties re-developed Island Walk, what had been the decaying Palm Harbor shopping center and is now among Palm Coast’s more vibrant commercial zones again. The developer had similar intentions for the school board property, once home to the hulking building that had been ITT’s headquarters.
The school board bought the property in 2001 for $3.5 million, the equivalent of $5 million today, in inflation-adjusted dollars. In 2005, before the bursting of the real estate bubble, the property’s three appraisals fell between $4.1 million and $5.2 million. In 2013 and 2014, additional appraisals placed the value of the property—which still included the building—between $1.1 million and $1.55 million.
There had been no more recent appraisals when Michael Collard Properties offered the $1.8 million last year. The building was demolished in April 2016. The board earlier this year asked for new appraisals ahead of a request for proposals. Heffington and Associates’ appraisal came in at $2 million, Cooksey and Associates came in at $1.75 million.
Board members Janet McDonald and Colleen Conklin found the $2.5 million offer too low. Andy Dance and Trevor Tucker voted to accept it.
“We are in need of capital funds,” Dance said, making the motion to accept the offer. “We have immediate needs for bus replacements that we could push to the front, 55 buses that eventually most of them need replacing now. We can jump start that as well. We may not have in the future a purchaser that has the same interest in the property that we do now.” A new bus costs around $145,000. Revenue from the sale would make possible the purchase of 17 buses.
“Any time you have appraisals at $1.75 and $2 million and you get a half million dollar over the appraisal, to me that’s a good decision,” Tucker, who chairs the board, said.
Conklin said she’s not as concerned about the district’s capital funds because it will be getting additional dollars from the state in that pot. “I’m just not certain exactly where the market is going and what is happening with the market and whether or not now is the time to let go of that property,” she said.
McDonald last year said the property is worth $5 million. She opposed selling it for the one offer on several grounds, even questioning the quality of the two appraisals.
“Doing some personal research, the appraisals were passed by different professionals in the industry and they were found to be inappropriate comparatives that were used, and certainly sale prices that were not in the current market,” McDonald said. “We’re basing a decision on an appraisal of old sale figures, so if you projected those figures right now they would be higher. As the appraisal itself said, this is an expanding market, we are at the beginning of an expanding market. The other properties on Palm Coast Parkway are valued much higher and they are closing at a much higher rate. A lot of the properties that were used as comparables were not really in the same ballpark.”
McDonald also opposes using revenue from the sale for school buses, and called the bidding process unfair. “I heard that most realtors did not know it was even available,” McDonald said of the property. “When you don’t seek out a commercial advertisement, when you don’t seek out putting it on the MLS in appropriate ways, we don’t get the range of people who might be interested in this to bid for it.”
The board did not decide what to do with the property next, other than to let it sit.