Council sends VK Corporation counteroffer of $8M for land; City acquired via 2006 quick-take
The ball is back in VK Corporation’s court in the legal and financial wrangling over land the city plans to use for a new police headquarters after the City Council sent a counteroffer to settle the case for $8 million plus $400,000 in attorney’s fees.
Assistant City Attorney Mark Lupe told the council that throughout the litigation process four separate appraisals judged the VK property as being worth anywhere from $5.65 million to more than $12 million. During a January mediation session, the city and business agreed to an $8.4 million payment for the land, but slashed that number by $200,000 after additional conversation.
There did not appear to be more wiggle room to bring the number down closer to the city’s highest appraisal, which was more than $6 million.
“The $8 million level is a barrier, “ said Lupe, who spoke with the VK Corporation’s attorney recently. “I don’t think we’ll be able to settle it below $8 million at this time.”
The city acquired the land via quick-take in December 2006, about five months before voters rejected a plan to build a $110 million public safety facility there. Last week, council gave its approval to Balfour Beatty to design and solicit bids on a $23 million facility on the site.
Several members of council expressed dismay at the massive differences between the appraisal values determined by city-hired experts and those hired by VK.
“Look at the range and the disparity,” said Councilmember Derrick Donnell. “It’s just frustrating.”
Lupe said the differences stem from the appraisers using different methods to determine the land’s value. While Lupe said the city’s method was more “traditional,” he conceded that even the city-hired appraisers considered the VK’s appraisers approach to be a valid one.
The decision did not generate much controversy as council approved the offer by a 7-1 margin. No one on the dais appeared eager to bring the matter before a jury.
Taking the matter to trial could cost the city even more as any portion of a jury award above the court deposit will bear interest of 11 percent per year from December 2006 until the final payment is submitted. Lupe said an $8 million settlement would cost the city the same amount as going to trial with the jury deciding on a $7.37 million verdict.
Because legal fees grow ever larger when a benefit is awarded through trial, bringing the case to trial could run up the ancillary costs as well. Settling the matter would put a clamp on attorney’s fees growing even larger.
“It cuts off the city’s risk of exposure,” said Lupe.
Councilmember Eric Grill was the sole vote against the settlement. During a reccess he said that he believes VK is “desperate” and that the city is in no rush to build anything on the property.
“I’m glad there’s some resolution, but I think we could have done better,” Grill said.
Under Florida statute, an $8 million settlement would normally generate a legal fee of $625,580. Mayor Eric Feichthaler asked council to cut that down to $400,000, saying that figure was more than fair.