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County would be wise to scrutinizeLindrick's value
© St. Petersburg Times, published October 3, 2000 County Commissioner Ann Hildebrand said she was surprised at the $16.8-million asking price attached to Lindrick Service Corp. At this point, nothing about Lindrick should come as a surprise. Considering the subterfuge practiced during recent negotiations with the city of Port Richey, expecting the unexpected should be standard operating procedure with this utility. Hildebrand said she anticipated the price to be cheaper. In some ways, it is. The sale price is a bargain compared to the $19.5-million purchase the city of Port Richey contemplated just six months ago. (Both proposals included disputed water wells in the city of New Port Richey, according to Hildebrand.) More importantly, though, it is a financial eye-opener about the huge costs tied to county acquisition of private utilities in Pasco. Lindrick, serving approximately 2,500 customers in coastal west Pasco, was one of 11 companies that indicated it would be willing to sell to the county. Pasco extended its deadline in order to give 19 others a chance to respond. Four years ago, Lindrick sought almost $7-million from the city of New Port Richey. Negotiations ended when the utility did not respond to the city's $3-million offer. New Port Richey, which holds a right of first refusal on any acquisition of Lindrick, has cast a dubious eye on the utility's escalating price since. "The mere thought that a utility worth $6.9-million in 1996 could be worth anywhere from $18-million to $33-million just three years later boggles the mind," City Manager Gerald Seeber wrote last year when Lindrick's negotiations with Port Richey became public. "Because this offer appears so ridiculous on the surface, the staff has not taken aggressive action to pursue acquisition." Ridiculous is accurate. But, a $7-million price tag is no longer viable, either. Since that appraisal, Lindrick has made $2.9-million worth of improvements to satisfy state environmental regulators, and the utility's debt is $6.9-million. To be negotiated is how much potential future development in the Gulf Harbors area adds to the value of Lindrick. The utility has the ability to add between 2,700 and 3,000 units, according to data it submitted to Pasco County. "Where?" asked Hildebrand. Most likely in multifamily developments. A vested rights determination from Pasco County four years ago, paving the way for a controversial nine-story apartment building in the Lindrick service area, could allow four more high rises and up to 2,800 tenants. Compensating a utility for future appreciation in value makes no sense. Due diligence ahead for Pasco County includes establishing a current market value. It is just one of the obstacles, including resolution of New Port Richey's right of first refusal, that must be overcome if this environmentally troubled utility is to be transferred into public ownership.
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