There's not enough deodorant in Bradley County to eliminate the smell of this deal
A strip of land on Keith Street that Cleveland, Tenn., leaders hope to buy for a greenway parking lot has an astonishingly complicated history — not least the fact that they're paying $200,000 to buy the property back from the same guy they sold it to 12 years ago for $500.
Another curiosity is that, thanks to a misappraisal, the property has been hugely overvalued since it went into private hands and was appraised at roughly $300,000. A new appraisal filed Dec. 29 puts its true value at a little more than half what the city has offered.
And the third oddity is that the landowner was getting a tax break all along on his overvalued property.
The Cleveland City Council on Oct. 26 voted unanimously to buy the property to maintain parking and access to the Mouse Creek greenway. The deal included a three-year payment plan.
"The property is heavily utilized day and night by walkers on the greenway," Mayor Tom Rowland said via email Friday night. "It has long been the fear of the greenway board that [landowner David S. Gilbert Jr.] might sell the 2 lots. Which would become a public loss of the valuable asset."
Four Cleveland City Council members said that, despite the complications, the transaction needs to go through.
Councilman Dale Hughes said the city's been using part of the property for greenway parking for 15 years.
"It's a piece of property that we need for parking for those that use the greenway," he said.
He and Rowland said the city built a bridge and walkway that encroached on the owners' property, but no repercussions ensued.
"They could have called the city's hand but they didn't," Hughes said.
Councilman George Poe added, "We don't want anything built there, we want to keep it for the people to use."
Councilmen David May and Richard Banks agreed. But Councilman Avery Johnson said he doesn't think the city needs the property and he'll have questions the next time the purchase comes up in council.
The Bradley County Register of Deeds' office said Friday the deal has not been completed nor a new deed recorded.
Gilbert did not respond to requests for comment Friday.
A comedy of errors
Assessor Stanley Thompson said Friday the appraisal mistakes were his.
"It was just an oversight" that went unnoticed until late last year, Thompson said.
Both properties had been in Cleveland's hands since 1955, and weren't appraised for tax purposes until they were sold under a single deed listing them as Parcel A and Parcel B. The deed shows David and Sharon Gilbert bought the land from the city Nov. 24, 2003, for $500.
Thompson said in that first appraisal, he didn't notice the small, square lot next to Kingsway Press on Keith Street and the adjacent strip of land along the Mouse Creek greenway were in a designated flood zone, although the deed plainly states that fact. Records show four reappraisals since then but the error wasn't caught.
Thompson initially valued the square lot at $27,400 and the strip along the greenway at $211,400. As of late last year, the values were $64,700 and $233,900, respectively.
When he heard the city might buy the property, he said, he checked the books and finally saw the strip land, Parcel A, lay in the flood plain, unsuitable for building. An appraisal dated Dec. 29, 2015, drops the lot's value from $233,900 to $46,800. The square lot's appraisal didn't change, and the two lots together now are worth $111,500, according to Thompson's records.
He said he hasn't told Rowland or the council about the new value.
The tax break comes in the difference in taxes paid on commercial and residential property. Taxes on commercial property are assessed at 40 percent of its value, while residential property owners are assessed at only 25 percent.
The small square lot, Parcel B, is assessed at commercial rates, but the larger property somehow was assessed as residential.
So the Gilberts were getting a 15 percentage-point tax break on the larger piece of land, Thompson said, but on an appraisal that was more than 450 percent of its true value.
"Like I said, we should have caught it," Thompson said.
He's not sure why the Gilberts never questioned it, either.
"If I'd had a property in the flood plain with value that high, I would have been calling the assessor's office to complain. But nobody ever complained," he said.
Deal or steal?
Some outside city government don't accept the idea of a simple mistake, starting with a $500 purchase price from the city to the Gilberts in 2003 for two parcels collectively deemed worth $238,000.
It wasn't clear whether the city had the property appraised before the sale, though someone with an unreadable signature signed a sworn statement on the deed that $500 was the proper value.
Councilmen Poe and David May said they thought the deal might have been part of a swap for other land the city needed, though neither remembered details. The deed doesn't mention any swap, and records were unavailable Friday.
Rowland, recuperating at home from pneumonia, said he didn't remember any details of the 2003 sale either.
Some local real estate experts said they didn't recall the city ever offering the parcels to the public for sale, and Bradley County Commissioner Thomas Crye, a real estate professional, said he doesn't remember any land swap.
The city asked the County Commission to split the cost of the purchase, since the city and county share the greenway, but commissioners voted last week against hiring an appraiser to evaluate the property.
Crye, who voted with the 7-6 majority, said zoning setbacks and easements made the land nearly impossible to use for anything other than parking. And even that, he said, would cost the city dearly for leveling and paving the lot.
In an interview Friday he called the deal a "boondoggle" that benefits Gilbert, whom he called a friend and political supporter of Rowland.
"There's not enough deodorant in Bradley County to eliminate the smell of this deal," Crye said.
Hughes and others, though, said the square lot could hold a building, and the city needs to secure that lot for parking.
Council members seemed at ease with paying $200,000 for property worth much less if it helps create parking for one of the city's most valued and popular resources.
"Oftentimes a tax appraisal is not comparable for what the property is really valued at for what it is being used for," Banks said.
Banks also said the county should help with the purchase.
"It was disappointing the county would not participate in something as popular as the greenway," he said. "The city residents are also county taxpayers. I wish my commissioner would spend my constituents' tax dollars in ways that would enhance" amenities for all.
Contact staff writer Judy Walton at email@example.com or 423-757-6416.