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West Palm Beach’s City Commission voted to sell land to a local business for $125,000 less than its most recent appraised value even as another potential buyer said he’d pay more for the quarter-acre parcel.
City staff members recommended Monday that commissioners approve the proposed $775,000 sale of a parcel of land located at 1100 Old Okeechobee Road to the owners of Property Works, a minority-owned business that provides landscaping and maintenance services to several city departments.
The city’s ethics officer issued an opinion determining that the transaction would not present a conflict.
How did West Palm obtain the land at Old Okeechobee Road?
West Palm Beach obtained the land in 1990 through state contraband forfeiture laws, which allows for the seizure of property if it was obtained through ill-gotten means. Proceeds from the sale, which has not been finalized, must be directed to the city’s Police Forfeiture Fund.
A report prepared by city staff said the Okeechobee parcel, which has two structures on it, “has been vacant for some time and its not being utilized by the city.”
Property Works’ owners offered in April to buy the parcel, which was appraised at $566,000.
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City rules require two appraisals to be obtained for the sale of any city-owned land worth at least $500,000, and the rules require that those appraisals be obtained within six months of a sale.
The sales price can’t be less than 85 percent of the fair market value, nor can it be less than 85 percent of the average of the two appraisals.
The city got updated appraisals — one for $650,000 on July 30 and another for $900,000 on Aug. 2.
The average of the two appraisals was $775,000, and that’s the figure city staff used as the land’s market value.
City rules require that any city-owned land must first be declared surplus before it can be sold, and the city made that declaration for the Okeechobee Road parcel in September.
There were four other potential buyers for the plot of land
That declaration drew the interest of four other potential buyers, including Alexander Milan, who developed the Mercer Park apartment complex on Alpha Street.
“Upon learning about this property being considered for disposition, I immediately reached out to Jennifer (Ferriol, the city’s director of Housing and Community Development) to submit an offer,” Milan told commissioner Monday night. “I know purchase price isn’t everything, but our purchase price is higher than the number that’s presented before you today. I definitely think the city is leaving some money on the table.”
Milan told The Palm Beach Post that his offer was $800,000 and that he planned to build “industrial chic” commercial spaces that could lure in other businesses.
“I believe there is a much higher and best use for this property than to be utilized for the intended purpose of the proposed purchaser,” said Milan, who added that he thinks the city should establish a more transparent system so interested buyers could know what pieces of land the city owns and which ones it would be willing to sell.
Why did the city select a lower bid for the property?
Thomas DeRita, who represented Property Works’ owners, noted that the company is a minority-owned firm with a long track record in West Palm Beach.
Cities are sometimes willing to assist minority-owned firms, which can struggle to compete against larger, white-owned firms that often have better access to capital and better ties to government decision-makers.
“We’re going to be providing real opportunity to a small, minority-owned business in our city who has been in business in our city for extensive periods of time,” Ferriol told commissioners.
DeRita leaned on job creation in touting Property Works as a buyer of the Okeechobee Road parcel.
“With them expanding their property, which is right down the road from there, they will be able to get at least 10 (new) people,” DeRita said. “We think, probably, more like 20 people that they will be adding to the payroll here.”
Commissioners voted 3-0 to finalize a sale with Property Works. Commissioners Kelly Shoaf, Sholanda Warren and Christy Fox all voted in favor of selling to Property Works. Commissioners Christina Lambert and Joseph Pedruzzi were absent.
Wayne Washington covers West Palm Beach, Riviera Beach and race relations. E-mail tips to [email protected].