‘Title defects’ and potential other expenses above $18.1-million sale price cited
On a 3-2 vote this week, the Sarasota County commissioners directed County Administrator Jonathan Lewis to terminate the county’s contract for purchase of the 2.04-acre Boatyard property on Stickney Point Road just east of Siesta Key.
Commissioner Teresa Mast made the motion following a presentation by Shawn Yeager, director of the county’s Parks, Recreation and Natural Resources Department, during the board’s regular meeting on Nov. 4, in Sarasota.
Yeager provided the commission details that The Sarasota News Leader has reported about “title defects” with the property, along with an easement issue involving the U.S. Army Corps of Engineers (USACE).
Chair Ron Cutsinger seconded Mast’s motion, and Commissioner Tom Knight joined them in the majority. Commissioners Mark Smith and Joe Neunder voted “No.”
Responding on Nov. 4, via email, to a News Leader request for comment on the board action, Chris Brown of Siesta Key, who owns the property through his limited liability company Big Main Street LLC, wrote, “I really wanted [the county] to have [the land], but ever since it was announced that I was willing to sell the property, my attorney has been fielding multiple inquires in case this deal fell through, which it now has. We are in the process of meeting with several developers and anticipate a new ownership structure within the next 60-90 days. There are several parties that have been patiently waiting in the wings.”
On May 5, the commissioners voted 4-1 — with Commissioner Tom Knight in the minority — to buy the land for approximately $18.1 million, which would come out of the tax revenue that property owners pay to enable the county to purchase environmentally sensitive lands and acreage that would be appropriate for new parkland. (See the related article in this issue.)
During their discussions earlier this year, board members emphasized the access of The Boatyard site to the Intracoastal Waterway (ICW) and Little Sarasota Bay, pointing to county residents’ desire to have more waterfront access.
On Nov. 4, commissioners expressed concern about the potential extra expense of trying to clear up the title issues, even though Brown had offered to put a total of $700,000 in escrow in an effort to help the county avoid any payments above the purchase price. Of that amount, $200,000 was to cover the resolution of problems related to a lift station easement.
As Yeager explained during his presentation, when county staff was doing its formal due diligence in regard to the planned purchase, staff learned that “overly broad access easements of record [were] granted to the … neighboring [condominium] association,” and utility easements that benefit the condominium association were not recorded.
Moreover, he continued, in 1960, a federal easement on part of the property was granted to the West Coast Inland Navigation District (WCIND), which is based in Venice. That easement was transferred to the U.S. Army Corps of Engineers (USACE) in 1962, he added.
On Oct. 1, Yeager said, representatives of the USACE told county staff that the county had two options “for future activities, development and structural improvements within the federal easement.” They also pointed out to county staff that a restaurant structure on the site encroaches into the easement.
Yeager then showed the commissioners a slide that explained the two options the USACE had provided the county:
Stress on ‘clear title’
Responding to Yeager’s presentation, Commissioner Smith, a long-time Siesta Key resident, noted the money that owner Brown was willing to put in escrow.
In his view, Smith continued, Option 2 provided by the USACE “may be the easiest path … concerning the proposed use of the property as a park.”
However, Smith said, he understood that a “contributed funds agreement” would have to be executed “to avoid delays in trying to get this through the federal review process.”
Then he asked Yeager whether the $500,000 that Brown was willing to provide for the USACE-related expenses would be sufficient.
Yeager responded that, thus far, he did not have an answer to that question, though he indicated doubt that the amount would cover all of the county’s financial obligations with the USACE issue.
Then his request, Smith said, would be to seek consensus of his colleagues to direct the Office of the County Attorney to research what the cost would be, “before we go forward.”
“Let me be clear,” Smith added: I’m in favor of the county purchasing this property. I think … it’d be a tremendous asset … even if the whole process took five years, considering the use of that property for decades after.”
Nonetheless, he pointed out, “I want to make sure that we have ourselves covered and that it doesn’t cost the taxpayers any more money … than we had budgeted.”
County Administrator Lewis stressed that staff does not know for certain what the total expense would be — “$200,000 or $300,000 or $400,000.” He further noted the potential that even if staff arrived at what it considered to be a reliable estimate, the figure could rise over the period of time necessary to resolve the issues, especially if that ended up being five years.
Then Commissioner Mast told Yeager, “It’s a very clear business decision,” given the fact that the board members were talking about “public dollars.”
She pointed out, “If we don’t have a clear title, then I’m not an interested party.”
If staff could secure a clear title, Mast continued, she would be willing to discuss going ahead with the purchase, “whether that’s a year from now, five years from now or whatever.”
Chair Cutsinger then acknowledged the struggle he had had in deciding to spend $18.1 million out of the Land Acquisition and Management Program funds to buy the property. He finally was persuaded, he said, by the long-term value of the site to county residents.
He agreed with Mast that day, Cutsinger continued, noting that he had no idea that the USACE easement existed when the board members conducted their earlier discussions about the potential purchase.
(In his Nov. 4 email to the News Leader, Brown emphasized that that easement “has been there since 1960 and was clearly on the title policy that was provided to The County in February. It is a little unusual to claim that as a [title] defect,” since the county “waived all of its objections related to [recorded easements] back in July,” Brown added.)
(As for the utility easement, for a sewage lift station, Brown also noted in his email, “The truly only surprise was that the lift station apparently services the condo association across the waterway,” though, he wrote, “We have not confirmed that on our end, but that is what is being claimed. If that is the case,” Brown continued, “there should be a recorded agreement somewhere …” It will be up to the new owner of the land to resolve that issue, he wrote.)
During the commissioners’ discussion, Cutsinger told his colleagues, “I don’t want to be the one trying to buy something at a price point like this and then still have uncertainties as to the outcome. And that easement significantly impairs the value of the property.”
He did agree with Smith’s remark about the long-term value of the property, Cutsinger said, “but not under these circumstances … We have no idea what the ultimate outcome will be, how much time it will take, what [the USACE is] willing to release, and all the complicated things going on with that.”
Then County Administrator Lewis explained that staff’s normal practice when staff cannot purchase property without a clear title is “We don’t go ahead.” However, in this situation, he said, “I didn’t feel comfortable just terminating [the contract] without having a discussion with the board on what your policy direction might be.”
County Attorney Joshua Moye confirmed that, given the circumstances, Lewis has the right to terminate the contract. Yet, Moye concurred with Lewis about the desire for board direction.
When Cutsinger asked for a motion, Mast made it and he seconded it.
This reporter heard neither Commissioner Knight nor Commissioner Neunder offer any comments prior to the vote.