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Palm Coast Monday, Mar. 4, 2019 7 months ago

County rejects financing for new Tax Collector's Office branch

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The county approved the deal in November, but turned down financing for it in a divided vote March 4.
by: Jonathan Simmons News Editor

For months, Flagler County has been planning to add a new branch location for the Tax Collector’s Office by buying and converting the former Sears building on Palm Coast Parkway.

"There's really no need for that building right now. No harsh need. And in the meantime, we've got the Plantation Bay problem; we've got the Sheriff's Operation Center problem; we've got very little excess reserve money to be buying anything."

— DAVID SULLIVAN, Flagler County commissioner

But in a March 4 commission meeting, commissioners said they were no longer sure the county needs the $1.1 million building — and, in a split 2-2 vote, the commission rejected Florida Local Government Finance Commission financing to purchase it. (Tied votes are considered failed.)

Commissioners Donald O’Brien and Greg Hansen voted in favor of approving the financing, while Commissioners David Sullivan and Charlie Ericksen voted against it. The commission’s fifth commissioner, Joe Mullins, was absent from the March 4 meeting.

The county could revisit financing for the building in the future. But for now, the March 4 vote leaves the county in the position of having rejected financing for a deal that it had already agreed to: The commission had voted unanimously on Nov. 19 to approve the property’s purchase, with the closing to follow after the county secured financing. County staff told commissioners before the March 4 vote that it was their understanding that the county had no option but to approve the financing.

“In November, it made some sense to [buy the property],” Commissioner David Sullivan said during the March 4 meeting. “It doesn’t make any sense now.”

He cited other county expenses — like structural issues at the county-owned Plantation Bay water and wastewater utilities, and the need to find a new location for Sheriff’s Office staff who’ve been displaced from the mold-affected Sheriff’s Operations Center building on State Road 100 — that he thought were more pressing than a new location for the Tax Collector’s Office. And, he said, the Sears building is larger than the tax collector’s office has said it wants.

“There’s really no need for that building right now. No harsh need,” Sullivan said. “And in the meantime, we’ve got the Plantation Bay problem; we’ve got the Sheriff’s Operation Center problem; we’ve got very little excess reserve money to be buying anything.”

The proposed financing that the commission voted down on March 4 had been complicated not only by the commission’s uncertainty about the county’s need for the property, but by the fact that the financing for the property had been bundled together with financing for new fire rescue equipment and new software: The five-year loan would have covered all three, for a total of $2,116,000.

Commissioners directed county staff to return to the commission in a future meeting with separate financing options for the fire equipment and software, so that those items could be considered apart from the Sears property.

“I’ve become fairly upset about the way we’ve been handling financing for purchases of buildings and so on and so forth,” Sullivan said. “I think it goes back to the overall problem of buying private property, taking it off the tax rolls, and then ending up having to spend more to fix it and make it available for use.”

He cited the Sheriff’s Operations Center — formerly a hospital building — as one example.

“I would love to have some way of separating this money out: We obviously want to do the software, which we’ve already approved, and the fire equipment,” he said. “I just feel that when we buy private property, the only people that make out on that are the real estate agent that gets 6% up front. We lose tax money for the duration. ... I think it’s time for us as a county to stop buying things that end up costing us more money than we thought.”

He mentioned that the county owns 17 or 18 acres near the library in Palm Coast, and could use that land without taking a tax loss.

He added that he wanted to know, before he voted, “that there was no way” the county could get out of the Sears building purchase.

Ericksen agreed.

Hansen also wanted to know if the county could get out of the purchase.

County Attorney Al Hadeed told commissioners that, based on the information he had from other county staff members, “we are past the point at which we can cancel it — unless we are not satisfied with the terms of the financing.”

County Commission Chairman Donald O’Brien said he’d read the contract, and that it has out-clauses for if the county couldn’t secure financing, or if the financing was just unacceptable.

“But we have financing,” O’Brien said. “I can’t even imagine that we should walk away — regardless of the usage and the need and all of that — there’s a legal issue here, with respect to the county honoring its contracts, and something that we agreed to back in November. And it’s way past the time to walk away from a real estate purchase and sale contract.”

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