Cone Ranch in-house sale divisive
December 26, 2009
Taxpayers shouldn't have to pay the highest price possible to transfer Cone Ranch from one Hillsborough County department to another, a member of a county commission-appointed panel on the ranch's future contends.
Advisory panel member Pamela Jo Hatley agrees that bond covenants for the 12,800-acre ranch contain several requirements governing how the Water Resource Services Department can dispose of assets. But she maintains that the covenants do not say the water department has to get a market price for the ranch if it is sold to the county's conservation lands program.
"You've got an internal transfer from department to department, and ... that property is owned by Hillsborough County," said Hatley, a lawyer who specializes in environmental, land-use and zoning issues. "If we get the maximum for that property to bring more money to the county, what we're really doing is transferring debt to taxpayers."
The advisory panel recommended last month that the water department transfer the ranch to the Environmental Lands Acquisition and Protection Program. ELAPP buys environmentally significant land using a voter-approved property tax of 0.604 mills, or about $9 a year on a $200,000 house with a $50,000 homestead exemption.
The lawyers have spoken
Assistant County Administrator Mike Merrill recently told commissioners that covenants on bonds issued by the water department require the department be paid fair market value for the ranch. County bond lawyers define fair market value as "highest and most profitable use."
Merrill said the bond lawyers agree that the water department must get the best possible price for the ranch or bondholders could take legal action against the county.
"We hired competent, experienced bond counsel," Merrill said in an interview Monday. "They've given us an opinion, and the county attorney agreed with that opinion. That's what we have to go on."
Commissioners voted 6-1 to have the land appraised, which Merrill estimated would cost $250,000.
'It's in black and white'
At issue is section 11.07 in the bond covenants, titled "No Mortgage or Sale of the System." The pertinent paragraphs say that if the fair market value is more than $500,000, the water department can sell only under these conditions: if the director of the water department says the property is no longer useful or profitable, if a "qualified independent" consultant finds it is in the best interest of the county to dispose of the property, and if the county commission agrees with the water director and the consultant.
"There is no way this bond covenant document could be construed to say that the property be transferred to another county department at fair market value," Hatley said. "It's in black and white; you can read it."
Merrill had a different interpretation: It says you must determine the fair market value of the property if you're going to dispose of it.
In support of his argument, Merrill sent commissioners an opinion by the county's bond lawyers, who are with Edwards Angell Palmer & Dodge. The opinion referenced a prior request by Lowry Park Zoo to lease Cone Ranch at a "nominal price." The bond lawyers cited the above section of the bond covenants in saying the ranch could not be leased for less than fair market value.
Wesley Bailey, an environmental activist from Thonotosassa, acquired the bond covenants through a public records request and showed the relevant section to Hatley at last week's board meeting. Lowry Park is not owned by the county.
"The relationship between the bond covenants and the Lowry Park deal is completely different from Cone Ranch," Bailey said. "The deed of Cone Ranch is in the name of Hillsborough County. It will continue to be in the name of Hillsborough County. This is not a sale in the ordinary sense of the word."
Environmental activists have been lobbying commissioners to reject the fair market value argument. They worry that if the price for the ranch is too high, ELAPP will not have enough money to buy it.
This year, a group of businessmen proposed selling most of the ranch to private buyers and estimated the value of the land to be $32 million to $63 million.
Hatley suggested ELAPP pay the water department $12.2 million for the land, the price the county paid for the ranch in 1988.
The county recently sold $56 million in ELAPP bonds, but $20 million of that is committed to another land purchase. Commissioner Kevin Beckner was the only board member to vote against paying for an appraisal. He instead tried to get the board to hire an independent law firm to scrutinize the bond counsel's opinion.
Beckner still questions the need for an appraisal.
"If I could make a decision, it would be to get more clarity before we spend taxpayers' dollars that may not need to be spent," Beckner said.
Back to Tampa Tribune Page. . .
Back to Home Page. . .