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New Port Richey hears utility eminent domain cost

The City Council tells the city manager to organize a plan for funding an effort to take over utility service from Lindrick Service Corp. in the Walker Tract.

By BETH GLENN

© St. Petersburg Times, published May 4, 2000


NEW PORT RICHEY -- City Attorney Tom Morrison estimates it will cost between $250,000 and $500,000 for New Port Richey to take over utility service for an undeveloped piece of land served by Lindrick Service Corp.

Morrison on Tuesday night gave City Council leaders his best guess as to the costs of mounting an eminent domain proceeding. By exercising eminent domain, the city could provide water and sewer service to the 19-acre parcel commonly called the Walker Tract. The tract lies within the city limits, but currently any homes built there would receive utility service from Lindrick.

"We're expecting a tough battle, knowing the individuals involved and their past evaluations of the worth of their assets give a guesstimate tonight of somewhere between $250,000 to $500,000 as litigation expenses," he said.

That amount would cover the cost of hiring experts for both the city and Lindrick owner Joe Borda, who would come up with competing versions of the area's worth. Then, if no settlement could be reached, a jury would decide what the city should pay Borda for the right to serve the Walker Tract.

A unanimous council vote authorized City Manager Gerry Seeber to create a plan for amending the budget and financing the lawsuit. The council will consider Seeber's plan later.

As a starting point for the city's case, an outside appraiser has valued the utility rights at between $15,000 and $20,000. What Borda's experts will estimate is anyone's guess, Morrison said, and could determine the scope of the legal fees. That's because the property owner's lawyer gets paid a percentage of the difference between his client's estimate of value and the city's estimate of value.

Council members have expressed hope that the eminent domain proceeding will help them figure out what the entire utility is worth.

"Right now we're trying to work on the Walker parcel, and the council has already voiced that if they did it on the Walker parcel it may be possible that we could do it with the whole of Lindrick services," said finance director Rick Snyder.

When Borda tried and failed to sell the ailing utility to neighboring Port Richey for $15-million last year, council members went on record disdaining the price. Estimates of Lindrick's value then were largely based on future revenues that would come in when more buildings were built in the Lindrick service area.

That probably won't be the case in this proceeding, though, Morrison said.

"In eminent domain proceedings, the property owner is not entitled to include in its claim of compensation future lost profits," he explained. "However, appraisers are inventive souls. ... "

-- Beth Glenn can be reached in west Pasco at 869-6229 or (800) 333-7505, ext. 6229. Her e-mail address is glenn@sptimes.com.

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