Dueling appraisals questioned
BROOKSVILLE Airport officials in January submitted a contract of $1.25 million to buy the foreclosed Brooksville Air Center in the corporate park.
An appraisal, conducted by Hugh Tolle from Crystal River, came back this week showing a leasehold market value of $1.4 million.
Satisfied that they covered all their bases, airport officials are proceeding with the closing in an attempt to buy the facility and lease it to an aviation tenant.
But at least one county commissioner says he wants to review that appraisal, especially since it came back far higher than another appraisal done independently by a private business owner. That appraisal, done by Airport Business Solutions, came back at $790,000 to $940,000
Commissioner Jim Adkins said it is common for appraisals to come back differently but the discrepancy between these two is substantial enough he wants to take a closer look at them and may seek answers at Tuesday’s county commission meeting.
Adkins said it is in the best interests of taxpayers to get the best deal and wants to see what the parameters of each appraisal were before reaching a decision.
“There is a discrepancy between the two and I plan to look at each appraisal,” Adkins said.
Tolle, hired by airport officials to appraise the air center at 15421 Technology Drive, has been a commercial and residential real estate appraiser since 1988. He is president of Tolle Appraisal Service in Crystal River and Century 21 Nature Coast, Crystal River.
Tolle said Thursday he has appraised airport hangars and other aviation buildings before but declined to elaborate on this latest one until the county undergoes a thorough review.
County Commission Chairman Dave Russell said he stands by Tolle’s appraisal and airport officials did their due diligence prior to moving forward with their $1.25 million offer.
“Based on the abundance of research and time taken to compile the information in our appraisal, I would accept it on face value,” Russell said.
County commissioners, he said, have given Airport Manager Don Silvernell and the aviation authority the go-ahead.
Michael Hodges, a certified general real estate appraiser with Tampa-based Airport Business Solutions, was commissioned by businessman Robert Rey to do an appraisal on the building.
Hodges said in his report he did a comprehensive study of “pertinent market data” when appraising the building.
“We have made a personal inspection of the subject property and carefully reviewed all pertinent and available comparable data,” Hodges wrote.
While the general condition of the structures was good, as was the quality of construction, Hodges noted “several deferred maintenance, incomplete and structural design issues.”
Hodges said Thursday that Tolle did not compare apples to apples when applying comparable properties and used a cost-approach analysis that is not applicable in this case.
“Cost is not value, especially in today’s market,” Hodges said.
For example, Hodges said three of the five properties used as comparables were office warehouses and not aviation properties at all.
Hodges said Tolle failed to include structural and other issues associated with the building and did not take into account the current marketplace.
Tolle also did not take into account the $57,000 annual ground lease on the building.
“With all due respect, Mr. Tolle is in over his head,” said Hodges, who stressed that all he does is aviation-related appraisals.
Dave Newell, director of education for the Florida Association of Insurance Agents, said there are no state laws or industry regulations requiring a client – in this case Hernando County – from obtaining a third appraisal.
It is normal for differing appraisals to be 10-15 percent discrepancy up or down, he said.
However, when there are two public appraisals such as these so widely divergent, it is standard procedure for clients to go to their appraiser and inquire as to how that appraisal was conducted.
The appraiser should then write an addendum or explanation as to what they did or did not consider when doing the appraisal, Newell said.
“This is quite a difference, so there may be something in there that’s not being added or properly calculated,” Newell said.
Typically, those differences are in calculations of square footage, construction types or whether the appraisal included land versus building.
Rey said Thursday it comes down to one question: “Why is the county working so hard to spend more money?”
Rey said it’s no secret that he wants to buy the facility and would be glad to see it appraised lower.
He doesn’t understand why there isn’t more of an effort being made to review the conflicting reports.
“Aviation is not a gangbuster business right now and I don’t know why they are taking that position,” Rey said.
Rey said it is in the best interests of the taxpayers that the county gets the best deal.
Realtor Gary Schraut, broker with Century 21 Alliance Realty and chairman of the Hernando County Aviation Authority, questioned the need for a third appraisal which could come back higher than the $1.4 million and cost the airport even more money.
Schraut said Rey is upset because he was unsuccessful in managing the old facility and wants to buy it back at a lesser cost.
“I strongly doubt that Mr. Rey’s motivation has anything to do with the best interests of Hernando County,” Schraut said. “He’s out to get it at the best possible price and the bank has already indicated it wouldn’t sell for that low of a price.”
Schraut said the airport already has an offer on the table and is going through the final stages of closing and to back out now would be a breach of contract.
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