Appraiser doesn't settle for price he set
Pinellas County pays nearly four times the value of his property.
By THERESA BLACKWELL
Published July 4, 2007
EAST LAKE – Four months ago, Pinellas County Property Appraiser Jim Smith complained that county work crews damaged a piece of his land.
On Friday, the county bought the property for $225,000 – nearly four times what Smith’s own office had valued it at.
The sale has raised questions about whether the county paid too much, and if not, has Smith paid too little tax on the property he has owned for 13 years.
The county staff say taxpayers got a good deal, as the nearly 1.5-acre parcel on Brooker Creek could be used to address flooding issues in the Tarpon Woods neighborhood. “I think it’s a good value,” said Peter Yauch, the assistant county administrator who oversaw the deal.
But a review of the deal by the St. Petersburg Times found:
- The county staff closed on the deal despite an ongoing review of whether the appraisal process met minimum standards.
- The county’s appraisal was based on an off-the-cuff estimate of buildable dry land by a county employee, not on a formal survey or other study of the property.
- The county, in valuing the land, never formally considered water issues on the property, a substantial portion of which is in a flood plain, despite an outside appraiser’s encouragement to do so before entering negotiations.
- None of the three comparison properties used by the appraiser to value the property include bodies of water.
The tale of the site’s proposed purchase has more twists than the creek that runs through it.
Smith, the county’s property appraiser since 1988, fell in love with the property in 1994, viewing it as an urban oasis. “It was what the Spaniards saw when they first came here,” he said. He purchased it for $15,000.
A sculptor, he thought about building an artist’s retreat with a view of woods, wildlife and the creek below. He found a house plan in a magazine and a site plan was approved about 10 years ago. Because of water issues, the house would have to be elevated off the ground.
But a marriage put that plan on hold.
Last September, Smith, 67, began reconsidering his plan. He gave his daughter Michelle Chapman, a new real estate agent, her first listing, telling her he would sell if she could get $400,000 – a number he said he pulled from thin air. His office appraised the just market value of the land in 2006 at $59,400.
Smith said his desire to sell only grew early this year when he visited the site and found his would-be retreat had been altered. Gone were trees and vegetation that had obscured nearby condominiums. A new channel was cut in the creek and a boat ramp cut into the soil of the creek bank.
Smith complained to County Administrator Steve Spratt’s office. “It was beautiful before,” he said.
The county’s explanation: After the 2004 hurricanes, crews entered the property to clear trees, debris and silt that blocked drainage. They carved out a channel that they contend had existed before.
Smith’s complaint landed on Yauch’s desk around March 19, his first week as an assistant county administrator. Yauch said the county staff told him the property would be a good acquisition for much-needed flood control in the area. But he acknowledged to the Times that Smith’s complaint – and the fact the damage couldn’t be repaired – was a strong incentive for purchasing the property.
From there, Yauch said the purchase proceeded according to county policy with the ordering of an outside appraisal.
But the Times review showed weaknesses in how the process was carried out.
The appraiser was given an off-the-cuff estimate that 1.03 acres of the property’s 1.466 acres were actually dry upland and buildable. The amount of dry land was the key piece of information for valuing the land.
The estimate came from a county environmental management employee who had walked the property in April and expressed reservations about its development value due to extensive wetlands and that much of the parcel was in the 100-year flood plain.
“This Department can provide a more accurate quantified assessment if civil survey support is provided,” Stephen Robinson wrote in an April e-mail to the county’s Real Estate Division. His formal report in May expressed continued reservations about the property’s development potential.
No survey was ordered, nor was the estimate of dry land revised to reflect other studies the county had done to show the number might be 10 percent too high.
Also in April, the outside appraiser – McCormick, Braun, and Seaman of St. Petersburg – warned its $250,000 appraisal of the property didn’t reflect any water issues and recommended the county consult an expert on such issues.
The county offered Smith $200,000 for the property. Smith countered at $225,000, a price the county accepted in May.
“Since $225,000 was still 10 percent under the appraisal, I said, ‘Well, let’s go ahead with the contract,’” Yauch said recently.
Yauch said it seemed like a fair price, “and it resolved Smith’s complaint.”
After the Times began asking questions, Yauch last week ordered a review of the appraisal process and suggested the deal wouldn’t close until the review was complete.
Yauch said Monday that he changed his mind on delaying the closing after the county’s legal staff advised him to go ahead. He stands by the original appraisal.
On Monday, the county’s review of the process concurred minimum standards were met. The review, however, did not address the county’s dry lands estimate or whether water issues impacted the property’s value.
County Commission Chairman Ronnie Duncan was annoyed Monday that the county bought the property before the review was in hand. “It doesn’t do us any good to have it today when we closed on it Friday,” he said.
The original county appraisal of $250,000 came as a surprise to Smith’s deputy, Ron Anderson, who is tasked with valuing Smith’s property for tax purposes.
In May, Smith shared the appraisal with Anderson, a state-certified general appraiser with nearly 39 years experience. The uplands acreage also surprised him. He told his boss that with the increase in dry land, the property’s just market value would rise, from $59, 400 in 2006 to $147,200 in 2007. Anderson said that would make the sales value of the property between $170,000 and $175,000.
It could also mean Smith’s office has undervalued Smith’s investment property, at least in recent years, possibly saving Smith thousands in taxes.
Smith isn’t convinced that’s true, saying he thinks the county’s alterations to the property may have expanded the buildable land. He said the county dumped fill from the new channel on wetlands, increasing the uplands.
The county contends it would have hauled the fill away.
Theresa Blackwell can be reached at firstname.lastname@example.org or (727) 445-4170.