BROOKSVILLE — In the current real estate market where a seller is lucky to find a buyer at any price, there are still lucrative deals to be had. At least, if one of the parties is the government.
County staff recently asked county commissioners to approve another purchase of a home along Elgin Boulevard, one of nearly three dozen properties needed to complete a road improvement project.
The price caused some sticker shock among board members.
The home, owned by Charles Jay and Barbara Jean Bogner, has a market value of $104,700. Hernando County agreed to pay well more than twice that, $283,000, for the 1,390-square-foot house.
Commissioner Jim Adkins, for one, had trouble understanding the numbers. "That is a tremendous amount of money in a down real estate market,'' he said.
Comparable sales of homes the same size, age and general vicinity of the Bogners' home compiled by the Property Appraiser's office back up Adkins' contention.
Prices for similar home sales in 2008 range from $123,000 to $135,000. In 2007, similar homes were a bit pricier depending on their individual characteristics but sale prices were largely in the $140,000 to $170,000 range.
In 2006, before the housing bust set in, the same three-bedroom, two-bath homes in Spring Hill were mostly in the $150,000s with some approaching $200,000.
But this transaction is hardly the same as an open-market deal, county officials explained.
The sale is part of an ongoing effort to acquire 33 parcels along Elgin, and Hernando still needs to buy 10 of them.
So far, the county has spent $4.3-million on the acquisitions. Officials hope to have all of the properties and to have bids out for the widening project within 18 months.
But first, it must get the remaining properties, and they won't come cheap.
Six of those properties are houses and three of the owners of those homes are represented by an attorney who is an expert in cases of eminent domain, which is when a government takes private property for public use.
That same attorney represented the Bogners.
Assistant County Attorney Kent Weissinger and County Engineer Charles Mixson have been negotiating prices for some time. The asking price started at $460,000, which the county said was not acceptable.
It is important to note, county officials said, that the final price is not what the Bogners will realize from the sale.
The $283,000 includes the attorney's cut, as well as the cost of a private appraiser, higher insurance premiums and the Bogners' moving expenses. Eminent domain law sends all of those bills to the government.
Weissinger told commissioners that he and Mixson agreed that "this is a fair, negotiated price to get this matter resolved and to move forward and complete the Elgin Boulevard acquisition while money is available this year.''
Making the deal also means avoiding litigation, which could turn out to be much more costly, Weissinger said.
While the housing market is way down from its high in 2005-06, Weissinger said that one of the main elements of eminent domain law is that the condemning authority cannot take advantage of a drop in property value.
Once a project is announced, that is when the values of the homes to be acquired are locked in legally, for eminent domain purposes.
It's the county's bad luck that the project was announced in 2006, when property values were still high.
The county could argue that the plunging real estate market, and not the announcement of the project, is the reason values have fallen. But Weissinger said that could be an iffy proposition for the county before a judge.
County Commissioner Dave Russell defended the way Hernando officials have handled the Elgin Boulevard acquisitions. He said it is up to the lawyers to decide how far to push homeowners and when the case must be settled to avoid a costly court battle.
"We've got a section of road here that, due to poor planning 20-30 years ago when it was developed, did not connect major thoroughfares to four-lane traffic,'' he said.
"There is no good time to condemn or acquire right of way in this fashion but the bottom line is that it has to be done sooner or later.''
By acquiring property a bit at a time as the county has the money to do so is typical of the process of getting a large-scale project like Elgin Boulevard completed, Russell said.
"As we are able to acquire right of way, we are. As we are able to build, we are,'' he said. "I think the county has done a pretty doggone good job.''
The commission voted 4-1 to buy the Bogners' property, with Jeff Stabins casting the lone no vote. Stabins said he would like the remaining parcels sold to the county without a price inflated by attorney costs.
That wish is not likely to be granted. In fact, the handful of remaining parcels are only going to get more expensive.
"As you approach more and more 100 percent acquisition,'' Weissinger said, "the attorneys representing the last holdouts are going to see that as an opportunity to make some money.''
Barbara Behrendt can be reached at [email protected] or (352) 848-1434.