County may have overvalued land gift to state

Published 5:55 pm Tuesday, April 9, 2019


Isle of Wight County appears to have provided two different dollar amounts — one to the state and the other to county residents — as to the value of its proposed gift of 20 acres of land in its Shirley T. Holland Intermodal Park for the construction of a state-run juvenile correctional facility.

According to the county’s proposal to the Virginia Department of Juvenile Justice for locating the facility in Isle of Wight County, which then-Board of Supervisors Chairman Rudolph Jefferson sent to DJJ Director Andrew Block in late February 2018, the county claimed to have been marketing land in the intermodal park at a cost of $35,000 per acre, resulting in a total value of $700,000 for the 20-acre site. However, the county’s website and a frequently asked questions document that was provided to residents prior to the Board of Supervisors’ public hearing on the matter both state the land is valued at only $200,000.

The county’s proposal to the DJJ was one of over 100 pages that Farmers Bank President Dick Holland received — and provided to The Tidewater News — after submitting a Freedom of Information Act request to the county in early March. He had requested all emails sent and received from July 1, 2017 through the date of the FOIA request from all of the current Board of Supervisors members, Block and any county staff member or elected public official concerning the DJJ project. Holland also requested all text messages, written correspondence, social media posts and handwritten or electronic notes from said sources and dates concerning the project. He ended up paying $877.78 out of pocket for the county’s expense in labor of gathering the documents.

The $200,000 figure appears to be the correct dollar amount for the land’s original sale price according to county records. The 20-acre site is part of a larger, 115-acre parcel designated 53-01-081 on the county’s geographic information system. Real estate tax records indicate the county purchased this parcel in 2009 for roughly $1.15 million, which breaks down to a cost of $10,000 per acre and therefore $200,000 for 20 acres.

The information provided on the county’s website concerning the DJJ project claims that this, plus the $500,000 the county has said it is willing to contribute toward the cost of extending water and sewer service to the site, results in a total cost of $700,000.

The total cost of extending utility service to the property in such a way that future development along the corridor could tie into the new water and sewer mains is estimated at $1.5 million, with the state funding $1 million of that cost. This, according to the county’s website, yields a return on investment of $800,000 when the county’s $700,000 contribution is deducted from the total cost of the extension.

It should be noted, however, that this calculation is based on the parcel’s purchase price in 2009, and not its current real estate tax assessment. As a county-owned and perhaps soon-to-be state-owned property, the land and anything on it will be exempt from any and all municipal taxes. But the encompassing 115-acre parcel 53-01-081 — and in fact, all parcels in Isle of Wight regardless of ownership — still undergo reassessment every few years.

Assistant County Administrator Don Robertson said on Tuesday that one of the county’s goals in reassessing land it owns, particularly when it comes to industrial properties, is to determine the market value of the property should the county choose to sell it.

According to the county’s most recent reassessment, which was completed in March of this year, parcel 53-01-081 is now valued at only $410,700, down $741,800 or roughly 64 percent from its original $1.15 million purchase price. This results in an assessed value of just $3,571.30 per acre and a total value of $71,426 for the entire 20-acre site of the proposed DJJ facility.

At the time the county submitted its proposal to the DJJ, the county’s then-current 2015 reassessment indicated that the total value of parcel 53-01-081 was only $285,100, which would translate to a price per acre of just $2,479 and a total value of approximately $49,582 for the 20-acre site.

Even in 2011 — one year before the Army Corps of Engineers reclassified loblolly pine trees as wetland plants, which has since resulted in much of Phase III now being classified as wetlands — the value of parcel 53-01-081 had already dropped from its purchase price to an assessed value of $495,800. Similar decreases in valuation appear in the county’s 2011 reassessment for all Phase III parcels except one. The average drop in value since purchase for individual Phase III parcels that year was around $560,000, and the total drop in assessed value since purchase for all of Phase III totaled about $3.9 million.

Robertson explained that the $35,000-per-acre and subsequent $700,000 valuation the county provided to the state had been based on the figures it had been using to market Phase II of the intermodal park, which is located to the east of the town of Windsor’s borders along U.S. Route 460. He added that Phase II pricing was used because the county did not yet have pricing prepared for Phase III.

“None of the other properties in Phase III had been contemplated for sale at that time,” Robertson said.

He also acknowledged that the figure provided to county residents in the FAQ document was based on the county’s estimate of what was spent to acquire the 20-acre portion of the aforementioned parcel, rather than the Phase II pricing, but added that he did not believe the value of the land impacted the state since the county was gifting the land rather than selling it.

Greg Davy, public information officer for the DJJ, confirmed on April 5 via email that the $700,000 land valuation plus an offer of $500,000 toward extending water and sewer service was indeed what the county had submitted to the DJJ in early 2018, as opposed to a draft that was later revised.