Red tape ties up dream of a home

A couple buys property from land speculator Don Connolly only to lose it because of errors by the tax collector's office.

By JEFF TESTERMAN, Times Staff Writer
© St. Petersburg Times
published July 3, 2002

WIMAUMA -- Shaded by live oak trees and situated a block from a fenced park and an elementary school, the 1-acre property seemed perfect for David and Veronica Estrada's growing family.

In February, the couple purchased the property from land speculator Don Connolly. Then they made plans to finance a doublewide mobile home so they and their 2-year-old could move out of David's mother's cramped trailer.

This week, they learned they will have to scrap those plans. The property the Estradas bought from Connolly should never have been sold to him in the first place.

Two mistakes by the Hillsborough Tax Collector's office caused the error. They played into Connolly's aggressive tax deed buying and marketing business, and they illustrate the damage that can happen when government mishandles tax deed offerings.

Now the county attorney's office says it has no choice but to seek a court order to have the Wimauma land purchase set aside.

That will rob the Estradas of their dream.

"We liked the location and we had made plans to put our home there," said David Estrada, 23, a drywall installer. "I guess that's not going to happen."

Connolly is the Valrico businessman who has attracted national attention with his practice of buying bargain basement tax deeds and selling the property to adjacent landowners at penthouse prices. His signature deal: paying $1,000 for the tax deed to a north Pinellas lake, erecting a pink fence on the shoreline, then demanding waterfront homeowners buy it back for $450,000.

Connolly's legal troubles have grown with his notoriety. He faces a July 19 hearing to answer charges that he violated his probation from a 1997 tax fraud case in which he agreed to pay the state $124,378 for sales taxes he underpaid when he owned a used car company.

Connolly, who could not be reached for comment Tuesday, also is under investigation for possible irregularities involving his income tax returns.

In the case of the Wimauma property, he more than doubled his investment by capitalizing on the errors made by the tax collector.

The first involved tax payments sent in by the former owner of the property, Superior Bank. A worker mistakenly posted Superior's tax payments to another account, creating a tax delinquency on the Wimauma land. After two years, the property became eligible for a tax deed sale, where properties are auctioned off to pay back taxes.

The second error involved the auction itself.

Normally, the opening bid at a tax deed auction is for the amount of back taxes and fees owed. In the case of the Wimauma property, however, the opening bid should have been much higher. State law requires the opening bid for a property with a homestead to be the sum of back taxes plus half the property's assessment.

But the tax collector missed the homestead notation on the Wimauma property, which was mistake No. 2.

The opening bid for the 1-acre tract, with half the $36,705 assessment added, should have been $20,000. Instead, bids opened at about $2,000.

Connolly bought the tax deed for $10,000 on Feb. 19. A week later, he sold the property to the Estradas for $23,800. He loaned them $21,250 at 10 percent interest, then sold the loan to Chad & Associates, a Brandon real estate investment firm, a day later.

David Estrada said he received assurances from Connolly that the zoning of the property would permit a mobile home. But the Hillsborough Property Appraiser's Office said Tuesday that the zoning of the property at 1010 Fifth St. in Wimauma permits only a single-family home on the property.

Hillsborough Tax Collector Doug Belden said his office has referred the entire matter to the County Attorney's Office.

"It was our mistake," Belden said. "We deal with over 400,000 parcels a year. We're not perfect. We intend to do everything we can to correct it and then move on."

Assistant County Attorney Brian Fitzgerald said he intends to file a lawsuit on behalf of the tax collector asking for a declaratory judgment "to reverse the entire sequence of events" involving the Wimauma property.

He said any financial loss suffered by the Estradas "will be made good by the Tax Collector's Office."

Though the property likely will revert to Superior Bank, Chad & Associates' James Chadwell -- who now collects the Estradas' mortgage payments -- said the county ought to find a way for the couple to keep the property.

"The Estradas were trying to make a better life for themselves," he said. "It sounds like the county is leaving them out there to hang."

-- Times researcher John Martin contributed to this story. Jeff Testerman can be reached at (813) 226-3422 or by e-mail at testerman@sptimes.com.

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