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Schools

A high price for a patchwork of properties

More than the school district, the broker often appears to be working for himself when putting together a deal. And that costs the district more.

By JEFF TESTERMAN and MELANIE AVE
Published March 12, 2006


TAMPA - The Hillsborough County School District's land acquisition policy, designed to assemble an orderly patchwork of parcels for new schools, seems as simple as one, two, three.

One: identify the target area for a new school. Two: obtain free or inexpensive properties that are available because of unpaid taxes or owned by another government. Three: hire a broker and pay a commission to obtain contracts for other properties.

But the district's formula hasn't always worked that simply, the St. Petersburg Times found in an examination of recent acquisitions.

In many instances, the district paid unnecessary fees for properties available because of unpaid taxes. Then it allowed a broker to seek his own deals.

The result at one site, where Sheehy Elementary was built in East Tampa, was a crazy-quilt of acquisitions, with commissions on 13 properties ranging from 3 to 10 percent. In some cases, the broker was paid by the buyer, in other cases by the seller, raising the question: For whom was the broker working?

The answer, records suggest, is the broker often was working for himself.

In one case involving land owned by retired construction supervisor B.L. Sims, the School Board paid his attorney's fees after agreeing to a condemnation, yet still paid a commission to Fred Edmister, the broker who assembled properties for Sheehy.

Sims said he first met Edmister when the broker knocked on his door and inquired about boat parts Sims kept. Edmister ended up buying a used boat engine for $1,000, Sims said, then mentioned that school officials might be interested in a 2.38-acre vacant parcel Sims owned on 40th Street. Sims abruptly handed the matter to a real estate attorney.

One appraisal put the value of Sims' land at $60,000. The district ultimately paid $175,000 plus $35,000 in attorneys fees based on a new appraisal and a desire to avoid mounting legal costs. The district also paid Edmister a commission of $5,250, even though Sims said he never signed a contract involving Edmister.

"To me, he didn't do nothing," Sims said.

Edmister made even more on a smaller property, the site of an auto repair shop, where he kept the identity of the buyer a secret and cut his own deal with the owner, businesswoman Linda Herndon.

"He came to me and said he had a buyer and asked what I wanted for the property," Herndon said. "He asked me for a commission. But he didn't tell me who the buyer was."

The school district normally pays brokers a 3 percent commission for acquisitions. Edmister asked Herndon for 6 percent. She agreed, partly because Edmister assured her he could get the price she wanted for the property.

The school district ended up paying $190,000 for the property, precisely the value placed on the six-tenths of an acre parcel by an appraiser hired by the district. Edmister's 6 percent commission, paid entirely by Herndon, came to $11,400.

Henry Lee Perkins, a retiree who lived in an older home in the area, said Edmister contacted her about selling and disclosed that the buyer was the school district.

But Perkins, now 63, had no idea the district paid the commission on most purchases. She ended up signing a $75,000 contract that included her payment of a 4 percent commission to Edmister.

"I don't recall discussing the commission at all," said Joann Avery, Perkins' daughter. "I was just trying to get the best price possible for my mom and get her moved into a new place."

Avery said Edmister volunteered to help Perkins when she found a new home.

The mother and daughter did locate a new place - a 1,215-square-foot home on Atwood Drive. And Edmister managed to get $1,000 knocked off the asking price of $72,000, Avery said.

But the broker was paid handsomely to save that $1,000. His commission was 3 percent, or $2,130.

As the Sheehy school site properties were being assembled, a pleasant fact came to light. The target area contained a half-dozen tax deeds - properties that could be purchased by anyone for the price of back taxes and nominal fees.

It was an ideal situation: no negotiations, no closing costs and no commissions.

That, at least, was the theory.

In practice, the school district found a way to add cost to its tax deed purchases. It paid a 3 percent commission to Edmister just to prepare a list of the tax deeds available in the Sheehy area.

The task could have been performed by anyone with Internet access and basic knowledge of local government Web sites, according to officials with the office of Tax Collector Doug Belden.

But the school district handed the task to Edmister. He found six tax deeds at the Sheehy site, then sent a list of the properties to school officials.

They cut a check for $110,267 to buy the tax deeds, then cut a $3,308 check for Edmister's commission.

Superintendent MaryEllen Elia said the district's employees are now doing such simple tasks.

"I think it's obvious we're trying to strengthen the approach that we take," she said. "That's going to be the standard."

-- Times researcher Cathy Wos contributed to this story. Jeff Testerman can be reached at testerman@sptimes.com or 813 226-3422.

[Last modified March 12, 2006, 07:02:03]


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