Land deals to get care
The property appraiser controversy prompts the county to reform procedures.
By THERESA BLACKWELL, Times Staff Writer
Published October 28, 2007
Badly embarrassed by the scandal over their purchase of private land from Property Appraiser Jim Smith, Pinellas County officials have vowed to do better.
"This will not happen again while I'm a county commissioner," Karen Seel said recently.
And they've started working on reforms. So far, officials plan to:
- Move the county's real estate division to a place in the organization where it can operate with more independence.
- Disclose publicly whenever the county considers buying land from an elected official or county employee.
- Have officials compare appraisals done on parcels of land with the properties' tax assessment.
But experienced observers say the county should consider at least two more reforms.
First, they say the outside appraisers hired by the county need more information than they often get to estimate the value of a piece of property.
And they say officials should bring back a job that no longer exists at the County Courthouse -- the on-staff review appraiser.
In the past, review appraisers saw problems before a proposed purchase ever got to a vote by the County Commission.
But that didn't happen in the Smith case, even though the original appraisal raised plenty of warnings.
As one participant in the Smith appraisal said, an outside appraiser can't force officials to heed the red flags.
* * *
In the Smith case, county commissioners voted unanimously to buy Smith's vacant land along Brooker Creek for $225,000, nearly four times the value Smith's own office assigned to it.
Reports in the Times led to a state investigation. A grand jury issued no indictments, but published a report that criticized, among other things, the county's rush to buy the land and the lack of public discussion.
Beyond the actions of the high-profile players -- the county attorney, the County Commission chairman and Smith himself -- the way midlevel county officials handled the Smith purchase is a case study in flawed decisionmaking.
From the start, the emphasis was on speed, according to county records and interviews with those involved in the appraisal.
"It was my first project when I walked in the door," said Elizabeth Lewis, a senior real estate specialist.
Lewis was new to Pinellas County, but no novice. A licensed real estate broker with decades of private experience, she was a real estate specialist for the city of Jacksonville for six years.
First, she needed an appraisal.
On April 11, Lewis told McCormick, Braun and Seaman of St. Petersburg they had won the job. The county would pay $1,500 for an appraisal in four weeks.
But that same day, two e-mails gave the job a big shove forward.
One was from Charlie Norwood, the director of the county's Geographic Services Department, to his underling, real estate administrator Jim Meloy.
"Jim, call me as soon as you can," Norwood wrote. Assistant County Administrator Pete Yauch "directs us to move as fast as possible even if we pay a premium. Four weeks is too long."
In a second e-mail, Lewis' boss told her to "put a note to file that Charlie Norwood told us to expedite the appraisals to at least 2 weeks or less."
So the next day, Lewis told the appraisers to finish in two weeks for a new price, $1,800.
Recently, however, Norwood insisted, "We did not rush."
Pressed by the Times, he did concede, "there was some discussion about 'Could it be done in three weeks instead of four?'"
* * *
Done in just over two weeks, the appraisal put the value of Smith's land at $250,000, but it was full of red flags.
County officials should "provide more information -- especially on sensitive property like that," said appraiser Scott Seaman.
For example, Seaman said he didn't know the owner of the property was the Jim Smith.
Nor did he know that Smith's daughter was the real estate agent who previously marketed the land for $400,000.
And he never got the survey of the property he needed, only a site plan marked "For review only."
"They should have hired an expert wetlands guy to see if it was even buildable," he said.
Four times in his appraisal, Seaman urged the county to do more study on the amount of wetlands on Smith's property.
But Norwood decided he had enough information. The county would go with an off-the-cuff estimate of the amount of wetlands from county staff.
No county official did anything to review the appraisal's conclusions until the Times started to ask questions.
* * *
Shortly before the sale closed, the county hired Palm Harbor appraiser Greg Johnson to see if Seaman's appraisal met minimum industry standards.
But like Seaman, Johnson was given a tight deadline.
His assignment was limited to a one-week "desk review," he said. He read Seaman's appraisal but did not visit the land. He also was prohibited by the county from contacting Seaman for more information.
"Overall, it met standards, and it certainly raised the proper flags," said Johnson, who teaches appraisal techniques to county real estate staff.
But, he added: "The appraiser cannot force the client to acknowledge the red flags."
To do a meaningful appraisal, Johnson said an appraiser would need a wetlands delineation study, information on impact fees and a complete property survey.
Seaman had none of those, and neither did he.
To Johnson, it was a recipe for trouble. So when he testified before the grand jury, Johnson suggested moving the real estate division.
"The director of real estate should have been one of the highest levels in government," he said recently. "And it's been relegated to somewhere below drafting."
The grand jury agreed.
"It's imperative that normal, objective procedures not be short-circuited through rushed appraisals," the grand jury's report said.
* * *
When Pinellas officials wanted an appraisal checked, they had to go outside because they don't have anyone on staff doing the job.
It wasn't always that way.
In 2003, as part of a larger county reorganization, then-County Administrator Steve Spratt okayed a reorganization that put the real estate division within the Public Works Department and eliminated two appraisal review jobs.
Dave DelMonte, now the county's manager of lease management in the Facility Management Department, worked as a county review appraiser in the county right of way division for 10 years.
As a result of inconsistencies and errors he found, officials were impressed enough that they hired a second person for the real estate division.
"Who knows?" he said. "Maybe it's a position they'll bring back again."
* * *
Along with moving the real estate division out of public works, the county is moving to hire an outside consultant and has solicited ideas from former employees.
Former employees suggested involving appraisers and the real estate staff early in the design of projects, said Assistant County Administrator Pete Yauch. When buying land to widen a road, for example, buying all the land on one side of the road can save money.
And whenever the County Commission considers buying property, officials plan to include property appraiser's Web site information on the property in the memos that go to commissioners.
Real estate specialists will compare the assessed value with one done by a private appraiser. When the difference is "significant," the real estate specialist will ask the appraisers to explain why, Yauch said.
How much is significant? At this point, that's up to the staff.
Theresa Blackwell can be reached at email@example.com or (727) 445-4170.
FAST FACTS: In other counties
Here's how nearby county governments handle real estate acquisition:
Hillsborough County: The real estate department is under the Office of Management Services. "We are separate from public works, separate from water, separate from the fire department," said Carl Harness, the assistant county administrator of management services.
Pasco County: The real estate division is under the engineering services department and an assistant county administrator for development services. Officials are looking to fill a vacant position for a review appraiser.
Hernando County: The Property Management Department is also under the engineering department and makes all the county's real estate purchases.