Flagler County’s Purchase of Pellicer Flats was a Mistake
Betting Environmentally Sensitive Lands Fund money on potential mitigation credits is a risk taking decision; appropriate for businesses but not for governments.
Palm Coast, FL – September 25, 2010 – 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.
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 ESL 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 county staffs wholehearted recommendation for approval. [story] Staff’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.
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Flagler County’s Purchase of Pellicer Flats was a
Ya think.
Pellicer Flats and Marineland Marina
Toby,
You hit the nail on the head about Pellicer Creek. The ESL once again has recommended that the county pay above appraised value for land, both within 2 years.
I searched the Tourist Development Council’s website and there is no where in the usage of the funds which the website states is controlled by the State of Florida is there a mention of contributing to a private entity’s use of these funds. Then it also does not allow use of the funds to improve a marina which will limit public access and be used to the benefit of the developer. Am I missing something here?
Appraisals
According to the News Journal the county had 2 appraisals prepared and a third appraiser to review those. Who were the appraisers and where are they from?
Toby For County Commissioner !
The Entire Board of Five !
Pellicer Flats
Toby, a mistake? Isn’t that putting it mildly? To spend 3.5 mil on a property that might be worth 500G sounds like a set-up. Those folks prove the old cliche’ about buying a bridge in NY. Two choices, run the legislators out of town preferably tarred and feathered and on rails, or attach their assets. What’s good for the goose is good for the gander.
Pellicer Flats
Why didn’t the County "take" that property in lieu of the default on the Hanger at the airport. The County said they couldn’t sur Ginn because he had limited assets, my ass, now he’s got another multi million dollar kitty to start another scheme like Hilton Hed or Hammock Beach. The County Manager and all of the Comissioners have to be incompentent or part of the problem. All need to be "FIRED".