SEMINOLE — Five years ago, a developer bought one of the last large tracts of undeveloped land in the city. The price: $13 million.
Two years ago, a bank foreclosed, contending the developer owed $15.7 million on the mortgage.
Two weeks ago, the bank sold the land to another developer for $2 million. That's a mind boggling 85 percent drop in the sales price over the five years.
"It's indicative of how (the banks) overinflated" the value of property when lending money, said Mark Ely, Seminole's director of community development.
Another indication that the bank's lending was unrelated to the real value of the property, Ely said, was the way the Pinellas County property appraiser handled the situation.
Despite the 2005 sale, the appraiser increased the taxable value from $1.7 million to only $3.4 million. That's a definite sign, Ely agreed, that the appraiser did not believe the land was worth anything near the hefty purchase price.
The property appraiser currently values the land at $2.5 million, a bit more than the most recent purchase price.
The property is a 22.3-acre tract at the far east end of 70th Avenue N behind the Home Depot on Park Boulevard. It fronts on Long Bayou.
The land was once a cow farm known as the Hutchison property. The city tried to buy it for $2 million around 2003 to turn it into parkland or other green space. Instead, it sold in 2005 to the Sweet Grass Co., a Minnesota developer that planned to build an apartment complex there.
The complex, which was to be called the Pointe at Still Water, would have had 240 units. Of those, 25 percent were to be 857-square-foot, one-bedroom apartments. Half of the apartments were to be two bedrooms with 1,007 square feet. The remaining 25 percent were to be three-bedrooms with 1,347 square feet.
Rent was expected to range from about $1,100 to $1,600 a month.
But Sweet Grass ran into trouble, and in 2008 the bank foreclosed.
Then, on June 28, the bank sold the property to Seminole Park LLC of Bossier City, La.
Robert Aiello, owner and head of Seminole Park, said he intends to stick to Sweet Grass' original plans. But it will be awhile before any buildings go up. The market isn't ready for any more apartments, Aiello said. Construction will begin "whenever the market will bear some additional development."
Ely was thrilled: "That's wonderful news for everybody."
In the short term, he said, a new owner means the property will be taken care of. In the long term, the development could bring in an additional $35,000 in property taxes each year and an estimated $25,000 more in franchise fees annually.
Reach Anne Lindberg at email@example.com or (727) 893-8450.