Tale of Airport Appraisals

as told by emails:

The day before the Pensacola City Council approves the Exclusivity Agreement with Innisfree Development (Dec. 12, 2007), Dan Flynn, Manager of Properties and Development at the airport, sends an email to appraisers Joel Asmar and Charles Sherrill.

Joel and Charles,

Once again the Pensacola Regional Airport finds itself in a unique appraisal situatin. We must determine the fair market value for two parcels of property fronting 12th Avenue/Tippen Avenue. The first parcel encompasses roughly 11.44 acres and is currently used for our shuttle parking lot and our rental car service facilities. A developer has expressed interest in constructing and operating a hotel on the area. The property is currently owned by the City/Airport with a zoning classification of ARZ. The second parcel encompasses roughly 4.81 acres and is currently used as the Army Reserve Center. The Reserve is constructing a new facility on Corry and will soon vacate this area at which time it will revert to the City. The Airport would like to transfer the area to the Airport roles.

In order to determine the fair market value we propose to use a process similar to other recent appraisal situations. We’ve employed Mr. Shawn Brantley to help determine the appraisal problem and to serve as a review appraiser. With that, we now need to employ the services of two appraisers. Given your experience in conducting similar work, we would like to inquire as to your interest in possibly performing the work.

In each situation, the appraiser would need to assume a zoning classification of C-2, less and except any permanent residential uses. With respect to the 11.44 acre parcel for the proposed hotel, existing improvements would not be considered. We would only value the land itself. For the 4.81 acre site containing the Army Reserve Center, obviously there are structures on the site that must be taken into consideration. The Corps of Engineers is in the process of conducting an environmental audit of the facility itself to outline any items of concern. I have surveys of both parcels for the use of the appraisers.

Please let me know if you would be interested in doing this work.

As always, thank you for your time.

Daniel Flynn
Manager of Properties and Development
Pensacola Regional Airport

Note: It appears this is the normal policy for the Airport – two appraisals and a reviewer.

Dec. 21, 2007 Charlie Sherrill sends Flynn a quote of $4,400 to do the appraisals.

Dec. 24, 2007 Joel Asmar sends Flynn a quote of $5,600 to do the appraisals.

Dec. 26, 2007 Flynn accepts Asmar’s and Sherrill’s quotes and states Shawn Brantley has been retained as the review appraiser.

Note: It appears there was no effort to negotiate with Asmar to reduce his fee to the same as Sherrill’s.

Feb. 20, 2008 Brantley lets Flynn know he has both appraisals. “I hope to have the reviews completed in the next day or two.” By 1:51 pm, Brantley sends another email saying he has completed the reviews. “I will dictate a summary letter and forward it to you acknowledging the review process.”

Feb. 26, 2008 Flynn sends this email to Frank Miller and Melissa Crawford (Assistant Airport Director – Finance).

We have the appraisal report from Joel on the hotel area as well as the review appraisal from Shawn. Shawn’s final assessment of the value is $7,000,000. I’ve placed copies on Melinda’s desk.

Note: There is no mention of the higher appraisal by Sherrill, but it clearly states Brantley assessed the property at $7 million. Remember the original ground lease that the Enterprise Committee approved in November 2008 used a $6 million value.

The Hotel Property Appraisal doesn’t come up again until August 25, 2008. Frank Miller sends this email to Crawford and Flynn:

Melinda

Please check with Joel Asmar regarding his valuation of the hotel property site. Joel averaged the high and low valuations rather than using the average of the 5 subject properties. Innisfree would rather use the average of the 5 subject properties: was there a particular reason he averaged the high and low valuations?

Frank Miller

Note: I found no email from either Flynn or Crawford asking Miller why he wasn’t using the Brantley review. Also why is Innisfree getting to dictate which value to use?

Of course, we know at the Enterprise Committee Meeting on Nov. 17, 2008 Miller told the council that there was only one appraisal. The Committee approved the lease.

At 6:48 pm Melinda Crawford sent an email message to Frank Miller: “Congrats…….maybe”

At 6:52 pm Miller replied: “Still have Thursday night. Need to look at the appraisal file in the am. Are you in the office.”

The next morning, Nov. 18 at 7:46 am Frank Miller sends an email to Rich Chism of Innisfree. He copies Julian MacQueen and Robert Payne:

Rich,
I have forwarded language from the Savannah lease that may provide the comfort Councilman Marty Donovan asked for last night with respect to the architectural and landscaping maintenance. Mike Godwin will work with Alan Manning to draft language for your review. The other item is to use the $6,480,000 value for the rental calculations and I assume you will take this for action.

Frank Miller

Note: They are back to using Asmar’s appraisal. No mention of Brantley’s $7 million valuation.

Then I came across this email:

From: Frank Miller
Sent: Tuesday, November 18, 2008 1:10 PM
To: ‘Julian MacQueen’

Subject: I NEED TO TALK TO YOU ASAP

Note: Looks like Miller may have realized he had a problem with the appraisals.

At 3:59 PM Rich Chism sends an email to Frank Miller asking to meet at the Hilton at 9 am Wed. (November 19). Miller replies five minutes later saying he and Robert Payne will be there.

Note: They are in full crisis mode.

On Wednesday, Nov. 19 there is email (12:04 pm) from Chism to Frank Miller, Mike Godwin (asst. city attorney) and Rick G. Emmanuel (Emmanuel Sheppard & Condon) and copied to Jeff Townsend and Julian MacQueen. It ends with “See you at 1:00 at City Hall”.

Frank Miller (12:05 pm) replies: “Okay, good to go. See you at City Hall.”

Eight minutes later (12:13 pm) Chism emails Miller: “Please bring copies of the other two appraisals.”

Miller replies (12:33 pm): “They are being emailed to you.”

At 1:15 pm: Robert Payne emails Frank Miller and Al Coby a draft memo to the council explaining the appraisal error. “Please review and let me know what you think. Frank, please insert the information in the areas that I left blank.”

At 1:40 pm: Coby replies to Payne and Miller: “I made a few changes, most notably to the recommendations.” He copies City Attorney Rusty Wells.

Note: The memo changes the valuation to the $7 million proposed by Brantley back in February.

Lastly at 5 pm: Melinda Crawford sends this email to Frank Miller:

Frank,

After talking with Dan, I realize that I misinformed you when we started the two appraisals/one review appraisal process. I have only been actively involved in the Rental car, Hotel area, and reserve center appraisal process, but Dan has indicated that we used the same process on the ball field (the City picked one appraiser, the Airport selected one and both were reviewed in 2000). We also used the same process on the Roger Scott property in 1997 and on other appraisals as far back as some of the Baars acquisitions.

I apologize for giving you the wrong information and messing up again.

Melinda Crawford