APPRAISAL DOES NOT SUPPORT PORT’S PURCHASE OF $2.6 MILLION TRACT
In August 2009, the Caddo Bossier Port purchased a $2.64 million tract of land that it currently leases for agricultural use for the whopping sum of $17,400 per year – a return on the investment of .0066 percent on the investment.
This purchase from Franks Investment Company and former Port Commissioner Milton Williams was recommended by Port Executive Director Eric England; it was unanimously approved by Port Commissioners James Pannell, Bossier City Attorney James Hall, Ron Miciotto, Lynn Austin, Ernest Baylor, Erica Bryant, Capt. Thomas Murphy, Michael Wainwright and Steve Watkins. (With the exception of Miciotto and Wainwright, all of these are still commissioners.) A review of the appraisal submitted by David W. Volentine to England on March 13, 2009, raises many questions concerning the business judgment of England and the commissioners.
This 232-acre tract is on the north side Robson Road, which runs from Ellerbe Road to Harts Island. It is – and always has been – zoned Residential Agriculture. (This zoning is primarily utilized for un-subdivided lands that are vacant or in agriculture or forestry uses, with some dwellings and some accessory uses.) The appraisal notes that there are six gas well locations on this property with approximately 12.4 acres encumbered by the well pads, along with numerous access roads and pipelines serving the wells. Additionally, there is a 100-foot-wide overhead power line servitude containing 6.3 acres across the central portion of the tract.
Volentine determined that the “highest and best use of the subject property is a residential use, which is considered a feasible use.” His determination was based several factors: the physical features of the tract (size, shape and footage), the predominant development of similar sites in the immediate neighborhood, demand and supply characteristics for similar properties and the property’s zoning designation.
The appraisal listed two values for the property (excluding minerals): a market value of $1,400,000 and a use value of $2,555,000. The sales comparison approach was utilized to determine the market value; this method reviews comparable sales of similar parcels with certain adjustments. The use value of the property was determined by the value of the specific property to a specific purchaser for a specific use.
Volentine’s assumptions of the specific use by the Port of this tract in determining the million-dollar-plus additional value are questionable. The appraisal states that the acquisition of additional land along the periphery of the existing port properties, which are east of Highway 1, would provide a buffer for heavy industrial uses at the Port. The problem with this reasoning is readily apparent: Highway 1 already provides a buffer; the subject tract is to the west of Highway 1 and behind existing Harts Island residences. Volentine concludes that because “the subject property is located across Highway 1 from the existing port site, it is likely the Caddo- Bossier Port Commission would develop the subject property with lower density industrial uses to provide a transition between the heavy industrial uses east of Highway 1 and the future development of lower density uses on the west side of Bayou Pierre.”
Volentine completely ignored/overlooked the private residences on Harts Island that are between Highway 1 and the subject tract. Additionally, he assumed that rezoning of the tract would not be a problem. After acquiring the tract, the Port failed in its attempt to have the tract rezoned to allow heavy 24-hour industrial use.
To estimate the use value, Volentine considered the purchase of other sites by the Port that are a part of the Port’s development east of Highway 1 and the Red River as well land purchases related to the GM plant, Cyber-Command and the Caddo 911 building. Not surprisingly, the utilization of these tracts supported his use value that reflected what Volentine states was his understanding that “there has been a long-standing offer by the owner to sell and a standing offer by the Caddo/Bossier Port Commission to buy the subject property for a mutually agreed upon price of $11,000 per acre.” Doing the math, 239.23 acres times $11,000 per acre “magically” equals $2,555,000, the exact “use value” Volentine determined for the tract.
One of the many unanswered questions is why the purchase was not conditioned upon successful rezoning or why it was not rezoned before the Port purchase? Another question is why did the Port paid an additional premium for this land? (The purchase price of $2,640,000 is $85,000 more that Volentine’s appraised use value.) Another question is how the Port and the sellers could have entered into a “longstanding” agreement to purchase the land for $11,000 per acre without formal action and an appraisal?
Unfortunately, England and the Port commissioners are not elected officials, and, thus, they cannot be held accountable at the polls by the residents of Caddo and Bossier parishes. Nonetheless, they owe taxpayers of both parishes honest answers to these questions.
John E. Settle Jr. is an attorney who has practiced in Shreveport- Bossier since 1977. His columns have appeared in local publications for more than 15 years. He can be reached at 742-5513 or John@ settlelawfirm.com.
