Travis County Commissioners Court
July 8, 2008
Item 28
28 is to consider and take appropriate action on appraisal method for parke properties I and ii, lp, and gdf realty investments ltd for the acquisition of land in connection with the balcones canyon lands conservation plan. And we simply note that this item may be taken into executive session this afternoon if necessary.
>> thank you, judge. I'm jeff george representing the landowners, gdf realty limited.
>> if we could get one of your colleagues there to hand those to the clerk. Are those for the court?
>> yes.
>> and we will need you to speak -- do you plan to stand?
>> I can sit down. It hard for me to sit down, but I would like to stand.
>> if you stand, get this mic on the end. Now, we hope our public doesn't think that we're making you stand as punishment.
>> for being the lawyer.
>> you're welcome to sit.
>> some people would think that would be an appropriate thing to do, the punishment for the fact that I am a lawyer.
>> jim, hang on a second. Judge, do you think that it might be better for melinda to give us a two-minute, three-minute, whatever it takes. I think the court is privy to what we are doing today with this agenda item. I think it really would help to have belinda get us to this point and then turn the ball over to jim and his group.
>> that's perfectly fine with me.
>> good morning. Melinda mallia is with the transportation and natural resources department. I'm the grant manager for the project that is attempting to buy 17.6-acre tract that these gentlemen own. We received grant funds through the habitat conservation plan land acquisition assistance program. And we have gone through the steps of the acquisition process that are outlined in uniform standards for federal land acquisitions. I believe they're here today to talk to you about the process, and we have made an offer that you approved back about a month ago of 5.6 million for 21.592 acres. This was based on an appraisal done by paul hornsby with land planning work done by paul linehappen. We have had the appraisal reviewed twice. John coleman with the ages group did an initial review. And then we received an appraisal from the sellers that was done by jeff cato and rudy robinson, and we submitted that to a national expert on what's called yellow book or federal land acquisition standards appraisal. And she looked at the seller's appraisal and the county's appraisal, and gave us a report. I have a copy for you up here. A three-page letter. There are two sections to it. The initial letter that is from the review appraiser gave us, and then a follow-up e-mail at the back of this, follow-up e-mail at the back. This is background. I don't know if they intend to address it today, but I thought you might want to have it as information.
>> I think that probably gives us a good jumping off spot.
>> I think since we're at this point, can we just describe the appraisal process that's ours, then the one that's required by fish and wildlife for the federal contribution?
>> certainly. The federal grant program requires us to get an independent appraisal and then to have -- and then to have a review done for the yellow book, the federal review standards for land acquisition. Those are our directions to the appraiser, simply to follow professional appraisal practices and yellow book.
>> so we don't have to follow the yellow book, but we have to follow the yellow book to get federal money.
>> that's correct.
>> and they have to approve of the process and the appraisal before they hand over the federal dollars.
>> that's correct. In order to qualify for reimbursement for these grant funds, we can get up to 75% of the purchase price as long as we have followed the terms of the federal program. He.
>> so the grant program is a good beneficial one, but does have serious strings attached which you have to follow to get 75%, up to 75%?
>> yes, sir.
>> thanks. That was kind of for our listening audience as much as us, I guess.
>> thank you very much, judge. This is a problem. I have prepared a powerpoint. I have given hard copies of the powerpoint to you and your staff. The powerpoint hopefully will appear somewhere on the screens that we have here. And let me start this and I'll try to be brief because you guys have a lot of work to do today. And this is also one small part of it. But this is a problem that has a long history. Dr. Purcell bought this property in 1984. And shortly thereafter in 1987, it was determined that there were endangered species on the property, nand particular for the problem that we're talking about today, cave invertebrates, critters inside of caves that have evolved separately from other critters because they've been isolated since the last ice age in those caves. The discovering of these endangered species has produced a public response by the people of Travis County, and predominantly in trying to come up with a way that we can develop in western Travis County that both enables you and the city to supply the needs of the citizens of our community and complies with the fish and wildlife and the endangered species act. That process began shortly after this, the discovery of these invertebrates and the birds. And it culminated in 1996 in a permit being granted to the city of Austin and Travis County. Let me start here. We have 21.6 acres, and I'll go through it, this powerpoint, quickly. The problem is how to come up with a price we can agree on. And we have -- why do we need to agree. That's first things. And why we need to agree is both, we believe that the county has to buy it under the bcc permit. And this is overlaid by a lawsuit we have pending against fish and wildlife for taking our property. And this is part of the settlement of that lawsuit if we can get this done. And in that lawsuit we deposed ms. Mellia and she testified that she believed that the county has to buy this property to comply with the permit. For many years we've been struggling with fish and wildlife to determine exactly what it was it takes to protect these species. Fanned you look at the next slide that says -- and if you look at the next slide that is a copy of your permit for the bccp permit, and it contains the language that we believe, and I think your staff believes, requires you to buy the property necessary to preserve the species and particularly we're talking about the tooth cave and the kerrshmer cave. And you have to buy it. We're almost done with the fish and wildlife because we have negotiated a compromise of our lawsuit with them that involved them issuing a permit to us. What has been published in the federal record, they're ready to sign it. We have finished we think all the negotiations with your staff about a management agreement for seven acres that would be managed by your staff for a period of time prior to the development of the property. So we're on the verge of getting our permit. And our permit requires us to sell it to you. We now know exactly what the -- if I look at the language of the 10-a permit that has been approved to be given to us, they had 22.7 acres. We now know exactly what it is. It's 21.6 acres that melinda described that is part of the grant.
>> so we got to sell it, you've got to buy it. What are we talking about? Which piece of property are we talking about? We're talking about a piece of property that we believe is in a unique location. It is shown here in this slide with the black lines around it, and it is located across the street from the h.e.b. Center on the other side of 620 and 2222 that you people all know about. And next to it on the corner is a little outpiece where there is a 7-11 on the bullock hollow corner. And this particular tract is right across the street where four points drive comes back behind the h.e.b. Center. That's where they're building the concordia campus is back over on that side. And this tract we believe is particularly well suited, the 21 acres that we're talking about here, because it has a stoplight right in front of it that allows the traffic on 620 to turn going either direction and allows people coming from concordia and the 3 m facility down four points drive to go directly into this property. And we believe that 21 acres is the heart of our piece of property. The property is larger than that. It includes on this slide the yellow parts that we are entitled to develop now as soon as the agreement with the Travis County is signed for them to manage the green parts, for your staff to manage the green parts on this slide. So I have provided a slide that shows map quest and these google maps are really cool. I don't know if you guys ever use those, but you can get overheads of aerial photographs of everything. And you can see this piece of property is here. We show it right there with the little red point. And it is -- we put on it some of the comparable sales that are used in these appraisals. Now, as I've pointed out, this next slide shows exactly where the stoplight is and the intersection and the development across the street, and what with we think is the heart of this problem. Now, we have two appraisals, and if you read what melinda just pointed out, in the second paragraph she says neither of the appraiser was, quote, wrong in this regard and neither report can be deemed to be in compliance or not in compliance with the previous covered issues. So we have two that we both are both good and bad. There are criticisms of bo of them that people have. Our concern with the difference in the values between $12.5 million and 5.6 is first of all it's so big a difference. Why would the difference be so big? And second, we're concerned about the process. One of the concerns of the process is that for reasons we do not know is that in our litigation with the fish and wildlife department, wavy hired expert witnesses to do analysis of the entitlements. What can we build on that under the city of Austin regulations. The fish and wildlife service hired testifying expert witnesses, as the lawyers on this court know, testifying expert witnesses are testifying expert witnesses. They take a position. For reasons that I don't know, the county chose or mr. Hornsby chose to hire paul linehappen, who was and is the expert against us in the underlying litigation. That creates a little concern on our part. First of all, mr. Linehan has testified what his opinion was before this appraisal process ever got started, and he wasn't free to take an independent look because he's already raised his right hand and testified that he -- what he thought before he ever took an independent look at that. That is something we think is inappropriate. He may be right, he may be wrong, but we didn't want to be in a litigation context with the appraisal process. Second, hornsby's numbers are in dramatic contrast with transactions that we have in nearby areas. If you look at the next slide, we have put on this slide, on this overhead, our property which you will see up here is the property where the four points drive comes out. And the appraisal of ours at $5.6 million under mr. Hornsby's work. Now, we don't necessarily agree with mr. Hornsby's method because he has used a currency or a standard term with which to value property as how many square feet of developable property there was. That is, property that is subject -- that has in which you can put impervious cover on it under the city of Austin regulations. Mr. Hornsby's -- and we have laid out transactions and appraisals that mr. Hornsby has done and transactions that have closed from here to the library of this tract. And the one directly across the street is the water treatment plant, which closed in January. And our -- mr. Hornsby says our price per square foot of impervious cover is $11.91. The joseph tract sold for $43. The city sale may not have been an arm's length sale, but we know that the city like you isn't prohibited by state law from paying anything besides fair market value for property. And you're going to have to assume that they violated the law to come to that proposition. They have also purchased a tract down along bullock hollow that's in green here along the bullock hollow road paying $50.10 for this property. There is an independent sale over on comanche trail that you can see from our property that is a five-acre tract that was closed in 2007 at $42 a square foot of impervious cover. And there is an appraisal by mr. Hornsby of the lucas tract that comes in watt $24.89 a square foot. None of these tracts are at a major intersection of four point drive and of 20, nor do they have many -- many of them have any access to 2222, which our property does. Now, we have -- we've reviewed ms. Frohm's report at some length and she has some things to say in it that are wise and some things that we think are not so wise, but in any event, there's one core truth is that she is an appraiser who concentrates on doing work in rural america, lives in a little town in wyoming and does most of her work in the far west appraising property in the far west for this kind much property. She has inconsistencies in her work. For example, she criticizes in her report mr. Cato and mr. Robinson's use of the water treatment plant sale, saying that under the yellow book rule you shouldn't use sales to people who have the right to buy the property as the city did because it's not really arm's length. But she did not criticize mr. Hornsby's work when he used, as we think as one of his two most important comparables, a sale to Leander school district that she never even mentions that as being a problem in her report, and the Leander school obviously has the same condemnation rights that this court does, as the city of Austin does. But she does suggest one thing that I think is very wise. One is that there is a dispute among the land planners and the consultants who have worked with the two appraisers as to what the density of allowable development on this property is. We think it's 65% impervious cover. Mr. Linehan has said it's 50% impervious cover. She says there's no way to know that for positive sure until the city of Austin acts sometime in the future. Why don't you just split the difference and use 57.57 and have it reappraised at 57.5? That's perfectly acceptable to us. And there is -- and judge Biscoe pointed out, there's costs to following the yellow book. And that cost is going to be borne by us. And let me just illustrate, if you go back to the page that has the picture of our property at the front and you see the yellow and the green and the part of the striped red, there's a regression analysis required by the yellow book that causes you to appraise the whole thing and then appraise it again taking out the 21 acres. And then come out with where the difference is the value. We believe state law, and as ms. Frohm points out in her report, state law is inconsistent with the yellow book rules. The Texas parks and wildlife code section 83 -- if you look on the slide after the criticism of ms. Frohm's analysis, it requires it to be based on fair market value, a simple idea in Texas law as you know as you do condemnation for a road or building is you look at the 21 acres and see how much the value of that would be, period. We believe the value would be much greater than the $34 or $43 a square foot of the property that the josephs bought down across the street on bullock hollow because common sense that it has a major intersection, has a stoplight, it has all of the acute at the. For an ideal development. And state law prohibits you from taking into consideration that it has endangered species. We've had enough of this dispute, however. We've been at this, dr. Purcell has been at it for 25 years almost. We've got our interest in this. My former law firm got our interest in this in 1995, I believe. We've been at it 13 years and we want to settle with the department of justice and we want to do what they say and to sell to you, but we can't, being stewards for other people, simply sell at a price and a process that we think is not fair. So we have come up with taking the clue from mr. Frohm's -- from ms. Frohm's report a system that I think is fair. And the system is we'll have it -- find five to 10 Texas appraisers, certified under the yellow book because it's easy for you to buy a property with federal money than using all state money. So we were willing to take a haircut and we think it's a substantial haircut, and have it done under the yellow book, but we wanted the process to be done so that there's nobody that can say that it's subject to my criticism. And our plan is find five to 10 certified appraisers that are qualified, your staff and ours pick -- who are Texas appraisers in Austin or dallas or houston or san antonio or in this area. Put their names in a hat, have it held up high and judge Biscoe can see in it and --
>> that's pretty high.
>> pull two name out of the hat. First one drawn is the one who is the appraisers and the second done does any review appraisal. We agree right then that whatever the results of that process we will take the money and you will agree to pay the money. It's as fair as you can make it. There is no more dispute about entitlements because we accept a compromise that ms. Frohm suggests, the 55.7. And we simply have a straight-up appraisal by somebody who hadn't worked for us, who hadn't done work for you, who is completely independent.
>> jim, is that provided that fish -- that of course is provided that fish is willing to say we sign off on it.
>> I don't have that in writing, but the staff and the department of justice lawyer, ms. Cook, have both told me that's fine with them. All they need is somebody that has got a ticket from the yellow book appraisal.
>> because that would be very important. It would be one thing for us to say --
>> you can't get your money if they don't do it. So obviously that's true. And I've assumed what they have told me they are willing to do, which is pick out people that are qualified, pick out a review appraiser who is qualified, and then -- and the idea is that these are people who don't have any prior history with us or prior history with you. And louver happens, happens. We can't come in less than the $5.6 million and it may come in more than the $12 million that our appraiser came out. But whatever happens, happens. And we end it. We split the cost 50/50. You pay half, we pay half. At the end of the day, the sooner we get the appraisal, 60 days later we close, and this part of our life and your life at the county is done. You've done what your permit requires and we've done what our permit requires, and it's over.
>> that seems to me to be a system that my former law partners can't criticize me for agreeing to and you shouldn't be criticized by any of the voters in Travis County or the poem for whom your stewards. Your stewardship is to treat people fair hi and evenhandedly and this is a fair and evenhanded system and to get the money from the federal government. That we believe is the way to do it. I suppose it is possible that we would be able to -- I don't have any prior idea of whether the fish and wildlife would accept us simply saying ms. Frohm can't say whether one is right or wrong and that's good enough and we can split the difference. Maybe they would or not, but they have not told me that. They have only said if you do it by drawing them out of the hat and they're qualified, we don't care. So I know that will work. I've been told by mr. Purcell -- one fish and wildlife official says they will do it, and the other one may change their mind. But ms. Cook has been working on this lawsuit as long as I have. She said this is the last one. She's going to retire as soon as we finish this.
>> who is ms. Cook?
>> she's the department of justice lawyer in charge of all of this problem. And I have been trying to get finished with fred's case for 13 years and I don't know if I'm going to retire completely, but I'm certainly going to take off several months and go to the mountains are something. So the process we've suggested is perfectly fair. There are problems that we could argue about with mr. Hornsby's appraisal. There are issues that give us concerns. Obviously --
>> jim, wait a minute.
>> we don't need to go down that road.
>> let me stop you there. The reason that I am supportive of moving forward on this thing, number one, I won't -- I want no indictment on mr. Linehan or mr. Hornsby. I think they did the job that they thought was right. I realize, and I've always respected that that is not a price that we are going to find a willing seller. And I think that that is also right for us to find a way to come up with how we can move this ball forward. And quite frankly, the thing that probably encouraged me the most to put this on the agenda and say, let's take another bite at the apple, is the fact that you all are willing to say, give us a shot at having somebody that has no dog in this fight. Let's find them. We all agree that whether that's five or 10, we pick them out, and the fact that you all are willing to say, and we'll live with that -- because quite frankly I think the county has always wanted to buy this tract. But as I have told you all before, we do have a mechanism that we have got to comply with. And in order to do that, we have got to get it signed off on by fish, and whether it's frohm or whoever it is, we need to find a way that we can participate because the court knows that in order to really get anywhere near the price that -- I think quite frankly the property is probably closer to your value than the value we have. I'm not down grading the price that we've got for any specific reason, but I realize that we're not going to get there. I think the court has determined that we're not going to get there because we can't get signoff. The only way we can really get in the game here is to get the feds to give us three-quarters of the money. I'm delighted to hear you say we'll live with that. If that thing comes in at 5.6, then we've heard it said right here, it's on tape that that's what the price is. I don't know quite frankly what it's going to be. But I think that that is a fair way for the county to be able to say because at the end of the day I want the landowner to be dealt fairly with. And I think the whole intent of endangered species act and acquisition of people's polygamist property was predicated on let's give you a fair market value for your land. And I'm willing to take the federal government at their word for that. I've always felt that it was too bad that we didn't really have a price that willing proteiners and sellers -- willing property owners and sellers were able to get right with. I don't think we have a reason not to buy the property, but we certainly have an obligation and a mechanism by which we have to perform. And as I've told y'all, if there's a way that we can get yellow book, I think that the court feels like this is a piece of property that we want to buy. And I think it's a fair way to do it. Belinda, is that a 15, a 20,000-dollar ticket if we were to go forward with this finding, the five or 10 people and picking it out of a hat.
>> we've already followed the steps in the name name.
>> I think they've agreed to split the cost.
>> 50%. Let's not take that opportunity away from them, ms. Mellia.
>> we'll pay half the money. I'm looking -- I want to find a way to look forward. I started to say there are ways to criticize people, criticize our appraisal, criticize the others' work, but that is going through life looking backwards. We've come up with a plan and we've always said if you want to condemn it, go over to the courthouse and we'll have a lawsuit and get 12 people off the street and come up with a value. That is a fair system. That is a system we have independent people making decision. Our system that we propose is an independent system that gets it decided. And it's over. That's all I'm trying to do. And Commissioner Daugherty has put it, we need to sell it and you need to buy it. If you can't agree on price let's come up with a way where we can come with a process that ends up with a number. And that's what we're here and asking the court to do.
>> I have some questions, some fact questions before we go into executive session on it. Is this the right time?
>> it's as good a time as any.
>> I have three or four questions of my own when you get done.
>> first, the threshold question is the we must purchase question. Are we obligated under the permit to purchase this property?
>> no, we're not.
>> are we -- and the lawsuit that's being referenced is a lawsuit between fish and wildlife and the property owners?
>> correct.
>> so any circumstance -- any agreement is theirs alone, does it obligate us in any way?
>> I'm not familiar with the terms of their settlement agreement.
>> we are parties to that lawsuit?
>> no, we're not.
>> may I respond briefly to that.
>> sure.
>> if you look at our slides on your permit -- it's the third one in like that.
>> regarding obligation to require and to implement the formal agreement for (indiscernible) cave.
>> and ms. Mellia is actually accurate that you don't have to buy it, but you have to do one of the three things there that is involved in the managing or implement management agreement requires in agreement with us. And I don't think she'll deny she's testified to that and raised her right hand indenture to it because it was one of the issues that we raised with the fish and wildlife.
>> isn't it true that we already own .6 acres around root and (indiscernible) cave?
>> that's correct, we own both caves.
>> you own the caves now.
>> we've always interpreted that to be -- one is that the feds have made it clear that they prefer us to purchase this. And we have indicated that we would happy through do so if we could -- held happily do so if we could agree on a purchase price for which the feds agree and will provide 75% match. So there's no problem with with that, but we've been unable to reach that agreed purchase price. The appraisals have gone back and forth.
>> I agree with that also.
>> what you say today makes sense to me. Who in the federal government do we normally rely on to let us know what we have to do to get the fed's agreement on the grant, on the 75% match?
>> we deal with the federal aid division at the regional office of the fish and wildlife service in albuquerque.
>> do you think ms. Cook has any influence there in albuquerque?
>> was there a lawyer in the department of justice? I believe the department of justice in the context that this is necessary to resolve the dispute in the court of claims and can make this happen.
>> we need to touch base with whoever we have been dealing with in the past, let them know a proposal has come to us and basically get their take on it, right?
>> yes, sir.
>> if they're take is just proceed, then we basically put up the money to do the appraisals and the only question is out of five or 10 -- the question is does we take the average of the multiple appraisals?
>> no. It would be one appraisal. We will draw out of a hat two names, one would do the appraisal and one would do the review. And whatever the combination of the appraisal and the review come up with the value, we'll take. And you'll take. So there's only one more appraisal and one -- so there's two people to do the job and those two people are not in this game at all. They're not --
>> we have to approve the names to be placed in the hat.
>> they do not need to approve the names, the feds. They need to approve the actual work in the appraisers do to ensure that they follow the --
>> but everybody in the hat is --
>> if we can get a perfect appraiser, still the feds would have to agree on the appraisal as well as the appraised value.
>> well, all things -- it could end up that we -- there is nobody that can do an appraisal that the feds would approve in Texas besides paul hornsby, but I doubt that. Because this -- we're not the only mace in the world that has -- the only place in the world that has this problem. And therefore we could -- lots of people have the problem. San antonio has it, we have it, houston has toads.
>> and everybody in the hat is going to be ultimately familiar with the yellow book and know that they have got to perform this by yellow book standards.
>> and there is a list of appraisers that are licensed in Texas and you can find out whether or not they've taken the courses and gotten the certificate for the yellow book. That's available, most of it is on their website. You just pull up and pick out the people who have got the tick.
>> I have some questions in that regard. The yellow book is the on owe I'm sorry I'm not familiar with this. The yellow book is the process, the procedure for appraisals that fish requires for these transaction stph-z.
>> for the grant money.
>> for the grant money.
>> we believe as --
>> hold on.
>> and one of the authors of the yellow book is ms. Frohm, who we contracted with to review to do a desk review of these two appraisals that are at issue, is that correct?
>> I don't know that, whether it's true or false. I know she does --
>> can you tell me whether she is one of the authors of the yellow book that fish requires?
>> I have been told that she did help in writing sections of the yellow book and has taught classes on yellow book.
>> and the appraisals that we have before us to get the time line right, there was a draft appraisal in December by mr. Hornsby based on the -- based on 35% impervious cover. That came in with a yellow book appraisal of 3.6 million, is that correct?
>> yes.
>> and then there was a subsequent final appraisal by mr. Hornsby upping that impervious cover limit from 35 to 50% that came in -- just to compare apples to apples at roughly 4.5 for the same 17.6 acres that was originally part of the draft appraisal. But the sellers required the addition of five -- of four more acres, so it was reappraised at 5.6 with the 50% impervious cover limit, is that correct?
>> that's correct.
>> not quite.
>> how is it different?
>> the permit that the fish and wildlife department were going to require us to sell to you, so we have to sell it to either you, the city or the lower colorado river authority. The permit was not 17.6, but was 21.6. And that 17 acres was arrived at by extraction of what your grant money was in 2006.
>> so in any case, my point being that the difference between the draft appraisal, the basic difference between the assumptions underlying the draft appraisal by hornsby in December and the final appraisal by hornsby in February of this year is the difference between a 35% impervious cover limit and a 50% impervious cover limit, is that correct?
>> that's fair.
>> and then subsequent to that was the k-2, am I pronouncing that correct, mr. Kato's appraisal?
>> no, ma'am. His appraisal was being done in December and I don't remember the date it was done. Because I didn't bring it. It was done before the end of the year.
>> I think it was the reason why I say that is I think it became available to us right after, I believe March.
>> I don't know the answer to that. But it was done.
>> in any case, that amount came in as opposed to the hornsby appraisal of 5.6, it came in at roughly 12.4. And the chief explanation for that is the 65 percent impervious cover limit.
>> no, ma'am. The chief explanation for it is the value per square foot of impervious cover. Mr. Cato's value is approximately $22 or whatever the number is. And mr. Hornsby's is $11.
>> so that's because of impervious cover and the comparables that mr. Katu was considering versus those that mr. Hornsby was considering?
>> like all appraisals it is based upon the choice of the comparables and the judgment of the adjustments. So that -- and mr. Hornsby did not consider the water treatment plant sale. Mr. Catu did. Mr. Hornsby considered the sale of the galleria at Bee Caves, but he only considered part of the consideration. Mr. Hornsby's appraisal of that tract assumed that when mr. Barstow -- baldwin. When mr. Baldwin sold it, he sold the entire fee, but he did not, he only sold 82.5 percent of the fee and kept a carried interest in the finished product of 17 and a half percent, which mr. Catu believed constituted the greater part of the consideration in considering the value of the sale of the galleria sale to be only the 82% he got in cash was inappropriate because he has a carried interest in a great big shopping center that's worst a lot more than the cash he had. So mr. Hornsby does not mention that in his appraisal and mr. Catu mentioned it and says we need to adjust for that in some fashion. Those are the kind of problems that we have with the hornsby's as well as the way he adjusted, used the Leander school sale. That's the kind of problems we have that caused the currency, if we use the same currency, so we get a pass at density and level. The currency being the impervious cover, twice one, twice as much as the other.
>> and I am not an appraiser, nor an expert on appraisals. So let me go to what our expert with whom we contracted with to take a look at the two appraisals said in regards to them. You've may the statement that it was miss frohm's recommendation and that you agree that you split the difference between the 50% and the 65% to arrive at 57%. And use that as the impervious cover. Is that -- is that your take on what she said?
>> that's exactly what she said.
>> where is it that she says that?
>> she says it in -- I didn't come with that marked because I didn't think that was contested. But she in her --
>> this might be the reference from which you take that. I think there is a difference here. A second recommendation, she's saying this is a second recommendation. This is page 2 of her report.
>> this is the may 28th letter?
>> may 23rd.
>> a second recommendation would be for Travis County and the property owner to agree to the use of an extraordinary assumption as part of the appraisal instructions that would direct the appraiser to use x as the maximum allowable impervious cover. And agree to hire one appraisal company to do an appraisal with this extraordinary assumption.
>> yes.
>> so is that the statement from which you take the 57%?
>> no.
>> as the extraordinary assumption.
>> no, she actually used the number in one of the tkphafrplz the complete report. But it is actually mats. It takes tpweuflt 15 and divide it in half. You divide it in half and add that for 15 and you come up with 17 and a half.
>> I'd like to see that because I haven't seen that. All I've seen is this statement of hers that says one other option would be to take an extraordinary assumption of an impervious cover of x that was mutually agreed upon. Then she goes on to say, based on the quality of the work submitted by the two appraisal companies, I would recommend the county hire paul hornsby and company rather than catu. Previously she says in the letter, as report understand my review of catu evaluation appraisals, the sales comparison approach is not adequate in my opinion. For this reason alone, I would not make a recommendation to Travis County to rely on the appraisal.
>> Commissioner, if we are going to not be able to find a way to agree, then we have -- we'll go down the road and see what other relief we have.
>> and let me just bring up one other statement of ms. Frohm's because again I don't think any of us here are experts in appraisals. She further says, I would not recommend Travis County -- I will then recommend Travis County engage mr. Hornsby to do a new appraisal using 65% maximum impervious cover even though the catu valuation appraisal uses 65%. I would not recommend reliance on this appraisal. So I think that taken as a whole, she is suggesting that really this comes down to the impervious cover, but she -- I think taken as a whole, she's seriously questioning the assumptions made in the catu appraisal --
>> I don't think that's fair. She has chosen -- there are problems that I don't understand. She has lots of things, nits to pick with mr. Catu's appraisal and fewer with mr. Hornsby's appraisal. I would simply refer to you the language on the first page of the 23rd letter that says neither can be said to comply or not comply.
>> she is saying neither of the appraisers was wrong in this regard and in this regard refers back to however, there is another issue that needs to be addressed, and that is one of impervious cover. I gray with you she says -- I agree with you she says neither is wrong in regard to impervious cover issue. But she does take issue with the other appraisal as not being adequate under yellow book standards.
>> the issue before the Commissioners is do we find a way to make an agreement or do we not find a way to make an agreement?
>> is it also --
>> we will not sell it for 5-point of million dollars without a process change that we are comfortable with because ms. Frohm has worked for you before. She has done work for you before and she was --
>> let me finish my question. Isn't it also true that in the deposition on December 18th that I believe you were present for, that the city of Austin representative testified that 50% impervious cover was pretty much the maximum impervious cover?
>> one of their representatives has, yes. The person who was there at the time the Lake Travis ordinance came in place --
>> the designated representative of the city of Austin that was sent to the deposition.
>> yes. Of course, he wasn't there in 1985 when the regulations applicable to this property were done. And alice glasgo, who is -- was there at that time, said he was wrong. That is what -- that's part -- that's what you used to do, and I still do is we try lawsuits about who is right and who is wrong. We're trying to avoid that kind of resolution of this dispute by a means in which we avoid the -- come in some way to split the difference on the density requirements so that we can avoid basically the cost of who is right because there is no way to know who is right until we bring in the city of Austin and we try at least through the third court of appeals to find out what the law is because density requirements are under the article 265 of the local government code, which has got the 1704 provision so that the rules at the time you first applied for the permit are the rules. What exactly that means is a law question. Neither the city staff nor you nor I will know, decide that. Somebody with a black robe over in this courthouse or in the third court at least will decide --
>> but that will an lawsuit between the landowners and the city of Austin. And right now we're talking about Travis County's offer to purchase this property, for which we are not legally required to purchase, but we would very much like to purchase it. We don't want to purchase it at any price.
>> I think you're wrong about both of those. Because if we can't come to an agreement, we will assert that the state code, state government provisions of the parks and wildlife go, article 83.16 requires you to buy it at fair market value under state law and that your agreement with the -- in your permit with the fish and wildlife service and our permit with the fish and wildlife service requires either you or the city of Austin to purchase it. And that will result in the lawsuit with you and -- because our permit doesn't require you to purchase it. It requires the city of Austin, us to sell it to the city of Austin or you. So we'll have a lawsuit as to what our rights are under state law and we'll take another five or 10 years, and at the end of the day we'll have a value determined at that time and we'll all be older and grayer, and this dispute will continue. I am trying to find a way to not have a dispute. And the beauty of --
>> sell it to us for 5.6.
>> [ laughter ] I'm sorry.
>> but if I'm hearing what I heard --
>> so the question then is --
>> hold on one second. What I'm hearing, and I heard staff testify earlier that we really wouldn't be a part in that lawsuit. Now I'm hearing that we may be an part of the lawsuit, the city of Austin, somebody would sell this property. So I really have gotten kind of off base on hearing different versions, variations of a lot of things here.
>> I'm not here to give you legal advice. I shouldn't.
>> I know --
>> [overlapping speakers].
>> I'm just pointing out what I'm hearing. And that's what we have to --
>> we have a difference of view of what the law is with the county attorney and with your staff. But be that -- and god bless differences in what the law is and what the facts are or I'd be out of work. But the fact that we have a dispute doesn't mean that we ought not to settle the dispute. We don't need to know who is right. If we go down the road we proposed, we don't need to know who is right, all we need is a process that we both buy into by which we come up with a compromise.
>> let me ask this question of staff.
>> this money that's been set aside to help us to purchase this particular property from the federal government, how long would that money be made available? There are always competing interests for money, whether it's federal or local. Wherever there's money setting, somebody is going to feet for it. Is that money basically protected at this time for this actual purpose or can anyone else have access to those funds?
>> at this time the money is earmarked for this particular acquisition. If it's not under the terms of the program that funded it, then the money would go back to the federal government.
>> so my question, though, is the length of time for possession of it. Of the money. Has there been a time line set aside I guess is what I'm trying to get to? In other words, he said he would be gray in a certain incident, so my point is the money that's set aside, how long would that money be available for use for acquisition of this property?
>> typically they expect us to spend it within three years, but extensions are available for particular circumstances. And so the deadline is not a concern at this time. That the money --
>> [ inaudible ].
>> but there is a lot of questions that's been raised and a lot of answers that have not been tied to the questions that's been raised. So I'm really -- I really have some concerns at this time.
>> any concluding remarks?
>> Commissioner Davis, let me just say that I believe if we go down the right road of putting names in the hat and drawing them out this, whole process can be done before thanksgiving and probably before halloween. And it is a process that we will have an answer. We won't know at the end of the day which lawyer was right. We won't have to know to get a resolution.
>> will you require certain comparables be utilized by that appraiser?
>> I'm not requiring anything. If the county doesn't require anything -- these people will be given, their names will be drawn out of a hat. We say you guys have certification for yellow book appraisal, go do a yellow book appraisal, come back with a number.
>> would you require an impervious cover percentage? For that appraiser or would allow them to come up with a determination themselves?
>> since I think it's impossible for an appraiser to come up with that determination because it's unknowable from a legal point of view, I propose that we promise on that and that we give them instruction.
>> isn't the sales price unknowable from a legal point of view? Isn't that what we're asking the appraiser to do, to be an expert in determining what the most likely sale price would be based on the most likely impervious cover limitations? And the most likely assumptions made by the market? Purchase and sale?
>> that's possible. That is one of the things, but I have proposed since she says, we can't know who is right. Neither one can know for sure who is right. She proposed we compromise. And I have proposed a compromise that we follow her instructions.
>> why wouldn't we have it set up like this? We're talking about appraisers. We're not talking about somebody that just started last Tuesday. I mean, everybody that's going to be in this game is going to know how to go and appraise something. I wouldn't expect jim, for you to after they were picked to get on the horn and say, hey, I'm going to-- I want you to make sure that do you this any more than I would want us saying, do you know what -- because I don't think that Travis County is looking to pay the least amount of money, I'm not. I'm looking to pay the fair price for somebody's private property. Now, if we can't get there, then I'm willing to say to you all, we can't get there. But what I think is the most important thing here is to get there thing off of y'all's plate and off of our plate because quite frankly our staff is worn out. And I think that if we pick and we have the agreement that when this person or these two firms are picked, it's a gag order or I guess that's a -- a legal term. That you say this is what you do. They're going to go and they're not going to ask all the questions because their obligation is to go and to get the fair market value for the piece of property. And they're going to know all the right questions to ask and bring forward. That's the reason that I think that this is a fair deal because we can talk about --
>> it's only fair if fish and wildlife would agree to it.
>> absolutely.
>> so the question is what would fish and wildlife find acceptable for the 75% match? We can find that out, can't we?
>> yes, sir.
>> if we can get that --
>> we probably need to hear it from them.
>> I understand. And we need -- I have told you what I have discussed with their staff and their lawyer. I can tell you we can get their staff and their lawyer to say whatever they're going to say.
>> we need the people that handle the money to make the commitment.
>> jim, if we call --
>> I hear you. Because we want this over and we understand you need to get the money. And we're trying to find a way to get it done quickly and do the money. We believe, and that's all we can ever do is to come here telling you what we actually believe. We believe that the fish and wildlife will do it, but you need assurance that if we have a yellow book appraiser and a yellow book reviewer and they do the analysis that the -- they come up with a number and we don't anybody have any input to them except to do an appraisal according to the rules, will fish and wildlife southbound it, we ought to give you that answer, and that is a fair request, judge, and it ought to be done.
>> but we also need to look at this before we shut down. I know we're getting ready to recess for lunch. But before we leave, we have a -- what has been I guess the policy of Travis County and we have purchased property within the bccp, what has been the policy as far as impervious cover percentage? And I do not know what that is, but I'm quite sure as we look through the times that we have used the federal dollars to purchase the acreage within the bccp, I'm quite sure there was attached impervious cover with those particular purchases more than likely.
>> yes, sir. I'd be glad to answer that.
>> can we get an answer to that question?
>> yes. We we tip which I go to a -- we typically go to a land planner and follow the yellow book guidelines that direct us to discover what the market thinks about what the -- in this case the city of Austin will do about impervious cover. Limits and entitlements. We go to an expert. If the appraiser isn't able to do it, then we do hire a land planner. The appraiser hires a land planner who has experience working with the entity that reviews and grants the entitlements. In this case we're talking about the city of Austin. It could be another municipality.
>> our policy is simply to find out what in an expert's professional experience, what they think the entitlements would be if there's any doubt about it. And then the appraiser will use that information based on the calculations that the land planner provides to given us his professional opinion about what the value -- what the market thinks the value would be.
>> was that done in this particular --
>> yes. That's exactly how we've done it with every acquisition since '98 we've followed this same set of procedures.
>> in all the acquisitions that we have made, has any of the acquisition of the acreage been greater than 50%?
>> it varies from tract to tract. That's not something -- there's not a policy where we set an impervious cover amount because we're really looking at what the actual development rights on any given property are. Or we think they will be.
>> have we ever paid more than 100% more than the appraised value that came out of that process for a bcp acquisition.
>> no. We pay araised value.
>>
>> [inaudible - no mic].
>> this is a tract that's subject to the Lake Travis ordinance. That ordinance was on the books for a very short period of time. There are -- there is one piece of property that is actually been developed under that ordinance. That is where the houses are back behind this property that were developed by doyle wilson in 1985. There are no other tracts subject to the Lake Travis ordinance that have been developed under that ordinance. There is one tract that is the comanche trail tract that was sold under that ordinance, the 5.5-million-dollar tract I showed you in your presentation. Those are the unlike almost every other place in Austin. We have a place where we have con 39 of unique facts that we think matter. We think it matters. Mr. Hornsby and ms. Mellia don't think it matters. We're trying to come up with a way to compromise. And if you don't want to compromise, you don't have to compromise. But if you want to find a resolution, we've proposed one.
>> judge, I think if we simply get melinda to make the phone call because it sounds like you can do it with a phone call, melinda, to say here's what we're wanting to do, fish, and what is your take on us doing that. And if they say no --
>> what we're considering.
>> we're considering. We would consider this. The court needs to vote on it. If fish just patently says no, we're not going to go for that, then it's pretty obvious what we're going to do. But if they say sure, it sounds fair to us and we're willing to take a look at that, and given the fact that you're going to find somebody that's going to comply with yellow book and all the things that we've all agreed, then that's the way to move the ball forward. I mean, otherwise we're never going to get this thing accomplished and done.
>> we'll take this up in executive session this afternoon under the real estate and consultation with attorney exceptions. Yes, sir.
>> iago want to say, Commissioner Daugherty, we've done research that shows that the federal funding for these grants can be done in three ways. It certainly can be done under the yellow book. It can also be done through condemnation and it can also be done through negotiated price. Now, we've got the policy guidelines for those grants. We'll be glad to give to you. On that.
>> I don't think that's in dispute at all. I think that we all recognize those are three separate ways that one can arrive at --
>> the point is the federal funding can proceed under all three of those ways. It's not just the yellow book that is required. There's nothing sacred about yellow book. It can be done through condemnation or a negotiated price.
>> we thank you very much for giving us time, more time than we thought we would take. I apologize for that. And we are trying to reach a compromise. Every compromise means somebody has to give up something that we think is important. We think we're giving up something important and that's the right to get it done under condemnation. You think you're giving up something important by giving up mr. Hornsby's appraisal. Everybody agrees to that. The problem is if there's going to be a compromise, we volleyball to give up something. Thank you --
>> we will take this up in executive session this afternoon. We will take up item number -- the agenda first thing this afternoon, which should be shortly after 1:30.
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Last Modified:
Tuesday, July 8, 2008 1:51 PM