BOCC poised to buy controversial $3.1M Pullum land

BOCC poised to buy controversial $3.1M Pullum land

by: Deborah Nelson
February 25, 2009

Despite opposition by two Commissioners and unanswered Sunshine Law questions, Santa Rosa leadership is poised to buy 92 undeveloped acres of land, at a cost of $3.187 million. Officials say the land will be used to construct another industrial park in East Milton.

Commissioners make the final decision on how to pay for the land at tomorrow’s Commission hearing.

South end developer Bill Pullum owns the property in question, located near Hwy. 87 S. and Interstate 10.

Pullum also owns 45 platted lots on the property’s north boundary; and a strip of highway frontage between the land in question and Hwy. 87, which he will retain ownership of. The parcel in question encompasses 92 undeveloped interior acres.

An August 2008 appraisal, commissioned by Santa Rosa County, valued the property at $900 thousand dollars.

A separate appraisal ordered by Pullum, dated December 2008, valued 89.98 acres in approximately the same parcel at about $3.3 million.

A third, County-ordered appraisal, dated January 2009, valued the parcel at $3 million.

Despite opposition from some residents; including questions of whether some commissioners had received information about the $900 thousand appraisal in a timely manner; commissioners voted 3-2 to buy the property at the February 12 commission meeting.

This past Monday, they discussed how they’d pay for it.

Thursday, the Board will decide whether to pay the entire $3.1 million up front to purchase the land immediately – or pay $1.6 million down and take out a mortgage at 6.98 percent interest.

The $3.1 million cost would empty all the County’s economic development franchise fee funds; plus use $2.17 million in General Fund dollars transferred from a previously-separate Industrial Park Fund, plus about $207,000 in franchise fee roadway funding.

Franchise fees are an extra five percent tacked onto electric bills that go to the County. Officials calculate the fees would be replenished in the coming year as new electric bill fee proceeds arrive.

Two commissioners continued to dissent over the purchase itself.

“Over the past 10 years, there have been an average of 18 acres sold per year in the [existing] Industrial Park,” Commissioner Lane Lynchard noted. “I don’t believe there’s an urgent need for this property, especially in light of the economic realities we are facing.”

Lynchard calculates it would take 30 years to build out the 542 acres of industrial property already owned by Santa Rosa County, using the last 10-years’ average sales rate.

He also expressed concerns that no money would be left to build infrastructure on undeveloped industrial properties.

“The proposed industrial park has no infrastructure in place,” Lynchard remarked. “If the goal is to grow ourselves out of the current economic downturn, I don’t think that buying land that is not shovel-ready is the way to accomplish that goal.”

“Businesses look for property that they can start construction on immediately, and this property is not ready,” he added. “We still have 115 acres in the existing industrial park, less than two-and-a-half miles from the property under discussion.

“We have an additional 160 acres available in the Industrial Park expansion, less than three miles from the property under discussion. If a major industry wants to locate in East Milton, this [already County-owned] property has ready access to the Interstate, as well as rail transportation nearby.

In 2006, Santa Rosa Commissioners purchased that 160 acres of undeveloped land adjacent to the existing East Milton Industrial Park, for $1.7 million plus a $170,000 realtor fee.

Not including the 200-acre state prison parcel, the existing East Milton Industrial Park has seen less than 10 acres per year in sales, Lynchard told the Board.

He noted there were 30 land transactions (totaling 222 acres) since 1986, including resales. Of those, 7 involved acreage greater than 20 acres, and 3 were over 20 acres (one of which is currently operating).

In the past 5 years, Santa Rosa has sold an average of 18 acres per year in the Park. Of those, 10.5 acres per year sold by the County resulted in currently active businesses, said Lynchard.

There were 24 transactions in the last 10 years, involving 178 acres (just under 18 acres per year) in the Park, he told the Board.

The original Park still contains 115 vacant acres.

Using the last 5 years’ average, it would take 11 years to build those remaining acres out, Lynchard notes. Using data from the last 10 years, it would take 6 years to build those properties out.

In addition to the 115 acres still available at the Santa Rosa Industrial Park (2.5 miles from the proposed Pullum purchase); there are 542 acres of County-owned industrial land currently sitting vacant and undeveloped:

The 160 undeveloped acres at Jeff Ates Rd., purchased in May 2006 ($1.89 million).
Another 257 acres in the Whiting Aviation Park next to NAS Whiting Field, purchased 2001 to 2003 ($946,000).

Lynchard noted after the Pullum purchase, the County would have to depend on uncertain grant funding to build roads and other infrastructure into undeveloped county-owned properties in East Milton and the Whiting Aviation Park.

“If we purchase this property outright, there is no money left in the economic development funds to put in infrastructure,” he pointed out.

Santa Rosa County bought some 350 acres in recent years that are still vacant and undeveloped.

“We’ve purchased two other industrial sites in the last 8 years. the site near Whiting Field and the site on Jeff Ates Road,” Lynchard observed.

“The County spent over $2.8 million dollars for these sites. If we change course now, we will not have funding to develop the other industrial parks.”

In addition to potential development money shortages, the purchase could interfere with Santa Rosa’s economic development program, itself, Lynchard told the Board. He noted the purchase would leave no money remaining to finance incentives and other programs.

“If we purchase this property we will have wagered all of Santa Rosa County’s economic development funds on property within a two-mile radius of a single point on the map,” he said.

“The county will own 365 acres of industrial land in that immediate area and have very limited funds left for incentives for businesses that might want to locate in Navarre, Pace, Gulf Breeze, Jay, Milton or elsewhere in the county.

“For these reasons I can’t support the financing proposal or the outright purchase.”

County officials have said that future franchise fees are expected to replenish some economic development funds in the coming year.

Commissioner Jim Williamson, who also opposes the Pullum purchase, asked the Board if there were any plans in place to develop the new property; any cost estimate on that development; and any plan to pay for those new infrastructure needs.

Proponents did not answer Williamson’s question, but say the purchase is an investment in the future.

“Because when someone comes looking to relocate, or expanding their business or creating a new business, most of the time they want to move quickly,” Commissioner Don Salter remarked.

“So if we have to go out and try to find property to purchase, go through everything we have to go through, and then put in the infrastructure, they’re probably not going to be interested.”

Some residents have raised concerns that the purchase could involve a Sunshine Law violation.

In a June 2006 email obtained from Planning Board member Alan Isaacson, who notes he obtained it in a public records request, TEAM Santa Rosa Director Cindy Anderson indicates to Pullum that she had spoken with Commissioners and they were “good to go” for a land buy.

Anderson also appeared to advise Pullum on how to develop property referenced in the email, prior to a sale to the County.

The email, which Isaacson notes he forwarded to Commissioners in January, reads in part:

“Pullum Park: Tom D. has finally ordered the appraisal. This has not been easy . If you know Tom, it might be a good idea to just talk to him about what you have proposed. He has been somewhat reluctant to move with any speed even though I have spoken with each of the Commissioners on different occasions and they are good to go. With the sale of some land in the Santa Rosa Industrial Park, we have some funds to get started.

I understood you were thinking about going forth with the road construction into the Park and having some concerns with Engineering. I know Roger has set a pretty high standard and he is holding to it as we proceed with the improvements in the Santa Rosa Industrial Park. How far back into the Park are you thinking about construction.........here's my thoughts: If we are going to purchase it, I would rather wait on the construction. Once the County owns it, we have more grant potential and would also like as much flexibility to deviate from the Master Plan as possible (i.e., to have larger lots). If you construct too much of the road network, we limit ourselves to the smaller lots.

Lastly is timing, as I am sure you are WELL aware, the County is placing a referendum out in September for the One cent sales tax and TEAM is working on a capital improvement plan which includes Pullum Park. We are hoping to present this plan which should give us final approval to purchase the Park in early October. I am not comfortable asking for anything significant while the Commissioners are focused on the sales tax.”

Milton resident Bill Wiggins read the email to Commissioners at the February 12 Commission hearing. Commissioners did not respond to the email at that meeting.

Several residents, including Wiggins, questioned the purchase at Monday’s hearing.

“I assumed you had the money, but it seems now you don’t have the money, by what you’re talking about today” former State Representative and Santa Rosa TaxWatch founder Ed Fortune remarked.

Fortune says he supports the purchase, but at a lower price.

“I believe we do not have the best price for the property. It’s just too expensive. That’s my problem that I have with the whole issue. I will not accept the appraisal that was submitted to the Board. I believe it’s excessive, it’s [too] speculative, and the market today is down across the country, and it’s down in Santa Rosa County as well.”

Fortune also pointed out the purchase will affect the budget by taking the land off tax rolls.

Wiggins said he believes the purchase is a drain on the economic development budget, and asked the Board if there was any other land available for purchase in the same area.

Commissioner Bob Cole said the Board has not checked, but that he lives in the same area and there is not.

“I submit to you people that there is property available,” said Wiggins. “…and I guarantee you it won’t be for $35,000 an acre.”

Wiggins also read from what he told the Board were minutes of a TEAM meeting that was closed to the public, where officials appeared to vote to approve recommending the Pullum purchase to commissioners. Sunshine Law requires public business to be conducted in open, announced meetings.