County’s Owned Real Estate Study 02.24.16
Martin County has recently received the report from CB Richard Ellis (CBRE), their consultants concerning the county’s facilities and real estate holdings. MCTA has advocated this study by an independent professional organization to give the county’s leadership objective, non bias information pertaining to their real property ownership. This includes 550 parcels inside the urban service area and 5,400 outside the urban service district.
At a time where ad valorem revenues are critical to the county, there is now a basis from which a dialogue can occur concerning the use of county owned property. Additionally, CBRE placed values on selected sites based on current market sales.
MCTA advocated for this study because the county holds title to many different parcels of property and many of them may have little or no use to the county. Some, on the other hand are critical either to the county, utilities, drainage, etc., that provide benefits to the taxpayers.
The report brings up some interesting discussions concerning the county owned golf course, the administrative buildings (owned and rented) and multiple vacant parcels. Most of these properties are important to the county’s operation, recreation and some are environmentally sensitive, while some are simply parcels that seem to have little or no relevance to the county’s operation.
We would caution the county to take the necessary time to digest this report and possibly have town hall meetings discussing the outcome of the study in an effort to get feedback from the taxpayers. Selling or renting county owned assets may seem like a slam-dunk when it comes to raising money to reduce our capital shortfalls, however, the MCTA association cautions the county that selling assets to pay for operational shortfalls may not be a healthy resolve. We call the capital shortfall an operational one due to the fact that the county used capital funds to shore up operations during the recession, thus we have the $250 million shortfall.
The county is just beginning the budgetary process for the upcoming year. Part of this process should be to identify possible reductions in the budget that could be used to gradually reduce the capital shortfall. We have had an increase of $9 million of revenue from increased real estate values, either by appreciation or the addition of new residences and commercial buildings that have come on line. Additionally, there should be an increase of revenues of approximately $9 million in FPL franchise fees that have also recently been approved by the county.
With the failure of the sales tax referendum last year the county has had to look at all possible strategies to reduce the capital shortfall. Some of these strategies included increased millages and FPL franchise fees. However, the biggest challenge facing us is our increases in expenses across the board.
$18 million is a far cry from the $250 million shortfall, however, if you reduce the budget by as little as 5% the county could then have an estimated $33 million to dedicate to the reduction of the shortfall.
The MCTA believes that the county should use the report to begin discussions on their real estate holdings and dispose of the properties that are of no consequence to the county. Recognizing that properties close to the rail crossings like the Indian Street (Fair Grounds Property) may be needed to mitigate the closings that will inevitably occur when and if the rail traffic increases. We need to think long term, 20 - 50 years out.