The Flagler County Commission today rejected approving a loan that would have financed the purchase of the old Sears building on Palm Coast Parkway and turned much of it over to the Flagler County Tax Collector as a satellite office.
The commission last Nov. 19 had approved exercising an option on the property to buy it for $1.125 million, though the closing was to take place subsequently. Some commissioners were under the impression they’d get another chance to weigh in on the purchase. Since then, Tax Collector Suzanne Johnston’s interest in the building cooled, costly burdens have piled up for the county between anticipated expenses related to the Sheriff’s Operations Center and the Plantation bay utility, and Commissioner Dave Sullivan has switched from a proponent of the building purchase to a staunch opponent.
To Sullivan, Flagler County government has been on a bad streak, buying private property, taking it off the tax rolls, converting it to government uses, and making a mess of it along the way. He cited the evacuated sheriff’s operations center as an example, but also the property the county bought last for a sheriff’s substation in palm Coast off Old Kings Road, and that has incurred mounting costs, and now the Sears building nobody wants. It was the latest example of a commission reversing course on an administrative initiative.
The county administration told commissioners today that they were under an obligation to buy the Sears building, having exercised the option in November. Sullivan didn’t buy the argument, seeing the purchase more as a deal favoring county staff and real estate connections, if not friends, than favoring taxpayers–or needs for space.
“We represent the taxpayers as a commission, we don’t represent the staff. Is that a good deal right now for us given the other requirements? And the answer is no,” Sullivan said after the vote. “I’d even be willing to force it into a lawsuit and settle to make sure there isn’t a way out.”
Commission Chairman Don O’Brien agreed with Sullivan’s points: the need for the building is not proven, and the county should stop taking properties off the market and the tax rolls. Yet he cautioned against rejecting the deal to buy the building. “I can’t even imagine that we should walk away, regardless of the usage and the need and all of that,” O’Brien said. “There’s a legal issue here with respect to the county, honoring its contracts, something that we agreed to back in November, and it’s way past the time to walk away from a real estate purchase and sale contract.”
The November discussion, the first time the county commission publicly discussed the proposed purchase of the Sears building, was barely a few minutes long. Then-County Administrator Craig Coffey had placed the item on the consent agenda, the portion of the agenda approved in bulk, without discussion, absent a commissioner or a member of the public pulling items from it for discussion. Sullivan had pulled the Sears purchase, but not to object to it. “This is another attempt to serve our citizens better,” Sullivan said at the time, before Coffey very briefly explained the proposal, framing it as much-needed space for Johnston, the tax collector. The Sears location would replace the satellite office at the Staples shopping center off Old Kings Road, which has just 1,000 square feet. The commission unanimously approved the option then.
Today the proposal was part of a larger bundle. The commission was being asked to approve a $2.12 million loan that would buy new financial software for the county, breathing equipment and mechanized stretchers for firefighters, and the Sears building. It would have taken a keen eye to pick out from the commission package’s fine print, in today’s agenda, the connection between the loan and the Sears building purchase–another example of lack of transparency that didn’t sit well with Sullivan, he said.
Neither he nor the rest of the commission opposed the loan for the fire equipment or the software, two items that were in the county’s 2019 budget. But he and Commissioner Charlie Ericksen opposed the portion of the loan that would finance the Sears building and lock in the county to a repayment schedule of $423,000 a year for the next five years.
“I’ve become fairly upset with the way we’ve handled the purchase of buildings,” Sullivan said. “In November it made some sense to do that. It doesn’t make any sense to do that now.” He also stressed that in November he’d been told that the commission would get to discuss the purchase again before it went through. There’s no evidence of that at the Nov. 19 meeting, but Johnston, interviewed about it in January, was under the same impression as Sullivan.
“They approved to go ahead to go through the process. It has not been purchased,” she said shortly after the new year. “Now that it is basically a new board they want it to go before that board again for a discussion, which is a good thing, because if somebody doesn’t want it to happen, now is the time for it.” She said she was more concerned about the needs of the sheriff, not her own: “At this point in time I think the No 1 priority the county has is the sheriff’s office.”
“So it goes back to the overall problem of buying private property, taking it off the tax rolls, and then ending up having to spend more to fix it and make it available for use,” Sullivan said. “We have a good example of the sheriff’s operations center, the old hospital that we bought, this new sheriff’s location in Palm Coast, which is turning out to be an additional cost, and now we’re stuck with trying to buy this Sears building that we really don’t need right now, given the other requirements that we have.”
The cost of the building is more than advertised, he said, when the cost of renovations, expected to be in the six digits, and the loss of tax revenue, are added in. “It’s time for us as a county to stop buying things that end up costing us more money than we thought,” Sullivan said. “We have 17, 18 acres at the public library in Palm Coast, that has plenty of room, we could have built a new sheriff’s precinct office, and when our tax collector absolutely needs the room, we could do the same thing there. There’d be no tax lost to the taxpayer, we’d have a new building, we wouldn’t have to worry about mold and everything else that goes on.”
Otherwise, Sullivan said, the county is placing itself in “a situation that’s really untenable, we’re pulling business tax money out of the county, and we’re adding debt.”
County Attorney Al Hadeed, speaking from information provided him by Tim Telfer, the county’s natural resources manager, who handled the deal with Coffey, said “we are past the point at which we can cancel it, unless we are not satisfied with the terms of financing.”
Sullivan pressed the point that “there was some time after our meeting in November between then and now where we could have stopped this deal from going through. That was information that I was given. However, we were never told what that date was, and therefore would not have had a chance to stop the signing of the contract.”
Coffey signed the contract on Nov. 19, Telfer said–the very evening the commission approved exercising the option on the property.
“Was there any time-frame in which the board could have reversed the decision and said no on buying this building?” Sullivan asked.
“There was some points in the process where we could have reached a conclusion that would have taken us out of the transaction,” Hadeed told him.
O’Brien said the commission’s directive to the administrator was not to come back to the board–unless there’d been red flags with the deal.
Today’s motion to approve the loan failed on a 2-2 vote, with Sullivan and Ericksen voting against. A tie vote is a failed vote. Commissioner Joe Mullins was absent. The commission expects to get another loan proposal that splits the fire and software items from the Sears building purchase. But it isn’t clear how the commission will proceed on that building contract.
Sullivan said he intends to keep “putting a lot of pressure” on the administration to get out of the Sears contract. “We don’t need to spend $1.3 million on the Sears building that we can’t even use right now.”