They had to pick a number. As Flagler Beach officials prepared to go to auction for a foreclosed, 33-acre property, they had no choice but to declare — publically — their maximum bid.
Commissioner likened it to walking into a trap or playing poker with their cards exposed.
But because of Government in the Sunshine Law, the only legal way the Flagler Beach City Commission can send City Manager Bruce Campbell to bid on the Ocean Palm Golf Club when it goes up for foreclosure auction March 27 is if they decide in public how much they are willing to spend.
Ultimately, the commission decided Thursday to bid a maximum of $500,000 for the property. If the city wins the bid, it will then decide what to do with the property, but because it is zoned recreational, its uses are limited.
Campbell recommended that commissioners move forward with the bidding at a regular meeting of the commission Thursday, but cautioned them from restoring the property, which has fallen into disrepair but was once used as a nine-hole golf course, to its former use.
He used Palm Coast as an example, which incurred a $91,000 loss from Palm Harbor in 2012, and a $167,000 loss the year before. Palatka also sees losses from its city-owned course.
Instead of a golf course, Campbell suggested the property might house a driving range, disc golf, walking trails or a playground. He also suggested that the city expand retention ponds to improve its stormwater system. Residents whose properties border the former golf course complain often of flooding in the area.
The mortgage on the foreclosed property has an outstanding balance of about $1.7 million. The bank holding the mortgage can bid to that amount if it decides to do so.
The property’s value has been decimated since 2004, when it was appraised at a just market value of about $1.4 million, Campbell said. But the property is no longer maintained as a golf course; in fact, it is not maintained at all. Today, its just market value is $115,064.
If appraised using a sales comparison approach, the property is valued at $420,000, according to an April 2012 assessment by Property Valuation & Consulting Inc.
Campbell said he thought the true value of the property was somewhere between those two appraisals.
But the property also offers an intrinsic value to the city it cannot offer others.
“We’re not, as a city, private investors,” Campbell said. “We do have a responsibility, in my opinion, to better the quality of life for our residents and visitors.”
Restoring the property as green space or park space would do that, Campbell said. Commissioners agreed.
Despite the city’s need to divulge its budget prior to attending the auction, officials were hopeful of Flagler Beach’s chances. Because of the property’s zoning restrictions, it cannot be used for development, so therefore it might not be lucrative to investors.
If the city buys the property, initial funding could come from infrastructure tax reserves, Campbell said. Then, the city will likely be eligible for federal or state grants for natural preservation and recreation.
Commissioner Kim Carney voted in opposition of the $500,000. Commissioner Steve Settle did not vote because he owns property adjacent to the parcel in question, which he identified as a conflict of interest.