Timbervest claims Rocky Fork appraisal too high
Appears before County Equalization Board
By Betty Chandler
July 08, 2008
In a recent appeal to the Unicoi County Equalization Board, Barrett Carter of Timbervest met with Unicoi County Assessor of Property Bill Gaines, Board of Equalization Chairman Charles Harris, and members Gene Harris, Ted Hopson, J. B. Street, Jr., and Jim Long concerning property in South Unicoi County and Greene County commonly known as the “Rocky Fork tract.” On the books, the tract contains a total of 9,828 acres, over 6,208 in Unicoi County, and 3,620 acres in adjoining lands in Greene County. Members of the Equalization Board were not swayed, however, and the property appraisal will stand.
The Unicoi County tract of land, presently appraised collectively at $32,560,900.
Carter spoke before the Board of Equalization concerning the Rocky Fork property, owned by New Forestry, a client of Timbervest. Carter told the group that New Forestry had purchased the property several years ago, and he was present at the session to discuss the assessment figure on the much desired Rocky Fork land.
Carter said he had spoken with personnel in Gaines’ office concerning an appeal of the assessment, and he was advised to appear before the Equalization Board. He told the group that the main reason he was appearing before the group was the 2007 tax assessment for a 4,708 parcel of Rocky Fork which saw an increase in tax assessment of 282 percent with no change in the use of the property over previous years.
“We have a 1,500 acre parcel with a 221 percent increase with no change in the use of the property. These were both 2007 increases from 2002. We did not appeal in 2007 due to a pending sale….” Carter added that the pending sale has become “more rocky than it was in the beginning.” He told the board that the closing date has been extended twice, which is not something Timbervest normally does as the seller – occasionally we ask for that as the buyer – considering who the purchaser is, we were willing to do that, and have done so twice.
Carter said when he called in to see what he needed to do to prepare for the hearing, he was told to bring in comparables. He told the group that he requested comparables from Unicoi County and was issued 24 property record cards. Of the 24 PRC’s that he was given, 14 of those had improvements. Carter said he did not consider those as “comps.” Of the 24 PRC’s provided, they ranged in acreage from a quarter of a percent to 4.5 percent in acreage in comparison to the Rocky Fork tract. He stated that he didn’t think that justified as a comparable. The ranges were from 15.5 acres to 282.74 acres. He told the group that he had been advised that the county didn’t have any parcels on the books larger than the 282 acres.
Carter advised that on a website, he located 21 parcels that are larger than the 282 acres.
When asked by Assessor of Property Bill Gaines whether or not those tracts were Forest Service lands, Carter said that was not a criteria that was offered, but it was a criteria that might need to be filtered, but he told the group that was not an offered option.
Carter did tell the group that personnel in Gaines’ office told him there were no comparable sales to the Rocky Fork tract. He said he did not feel that a comparable sale approach would provide a valid defense to an appeal, because he felt that there was not an existing comparison.
Carter said the Rocky Fork Property had a contract on it between the Conservation Fund and its client, New Forestry, the terms of which will remain confidential until the buyer (Conservation Fund) decides to disclose.
Carter said the proposed sale is not a sale, but is still pending and has since been extended. “That’s makes me a little nervous,” Carter said, “because that usually does not happen. The value of the purchase price is reflective of the Conservation’s intention on using the property. I’m not here to discuss the terms of the agreement, certainly if you all have that information, we can discuss what you all wish to discuss.”
Carter went on to compare the Rocky Fork land in Greene County as compared to the Rocky Fork land in Unicoi County. Using the two tracts as a basis for comparison, Carter told the group that according to the material he had assembled, approximately 60 percent of the Rocky Fork tract is in Unicoi County, and 40 percent of the tract lies in Greene County.
Carter said Greene County’s portion of the tract amounts to an appraised value of $2,000 per acre. He said it was his belief that the Unicoi County assessed value is a little over $4,700 per acre. An article carried in The Beacon early in June quoted Ranger Terry Bowerman who is headquartered in Greeneville, as saying that the Greene County side of Rocky Fork boarders the Sampson Mountain Wilderness Area and is rugged, very steep terrain and not well suited to develop for recreation. Reliable sources have also told The Beacon that the Greene County portion of the Rocky Fork tract cannot be accessed by vehicle.
Carter shared his own figures with the group, which included price per acre, taking into consideration the improvement value, and the land value for the total appraised value.
Gaines told the group that the Forest Service lands had no value on them. He said that the county could not place a value on these lands.
Carter showed the group Tennessee Assessment Notices from Greene County for 2007 and 2008 as evidence, as well as documents from Humphries County in Tennessee. He said that his organization (Timbervest) would respectfully request a reduction in the assessed value on the two Unicoi County parcels, or approximately 6,200 acres. “We would request a value of $1,975 per acre. There are no accurate sales comparisons,” Carter told the group. He added that the contract sale price per acre is less than the current assessed price per acre.
He said that Timbervest felt that transfer would be a good sale for the county. Outside the property tax revenue, it would be a good future use. He said that Timbervest did not feel that a sale should trigger such a reassessment of over 280 percent. Carter also requested an abatement in property taxes that were paid on the property in 2007 above and beyond if the amount were to be changed by the assessment board that that amount be retrofitted back into the 2007 property tax year.
Carter told the group that there were basically two issues. One is a reduction in assessed value, and the other, an abatement for last year’s taxes.
At that point, Assessor Gaines advised the group than an abatement would not be possible under state law.
Gaines restated Carter’s request that the Rocky Fork land be appraised for $1,975 per acre, rather than the approximate $4,700 per acre.
Gaines asked if prior to being approached by the Conversancy Group, and or other individuals, that there was great interest apparently from a firm that wanted to buy the property and put a gated community up there. “What happened to that contract? Did they not have the money to put up,” he asked. Carter told Gaines that he was unaware of anyone wanting to put up a gated community. Gaines told the group that his reference was related to an earlier buyer who backed of.
Gaines then told the group that an article which appeared in the Greeneville Sun, a newspaper in Greeneville, stated that the Nature Conservancy Group had expressed an interest in the property and intended to pay $39.95 million for the tract and that they intend to buy the tract on December 15. He further stated that it was his recollection that when the other firm was interested in acquiring the property, that was about the price that they wanted to pay.
Gaines told Carter and the Board that at least two other parties were extremely interested in the property, but backed off “…because of the things going on here….”
Gaines posed another question to Carter, asking if there is any connection between a deal that’s been negotiated on this property and the 5,000 acres that’s being purchased by the Three Sisters Mountain Investment Company, whose partners are Jim Haslem of Pilot Oil, Sandy Beale with Ruby Tuesday, Brad Martin, former CEO of Proffitts, and Kevin Clayton, Charlie Hicks and the adult children of Lamar Alexander. He asked Carter if there were any connection between that sale and this, because both the Three Sisters 5,000 acre tract and Rocky Fork were both New Forestry properties, and prior to that, both properties were owned by Vestal Lumber Company.
Gaines said the 5,000 acres that is being purchased for about $20 million that interestingly, the Three Sisters Mountain Investment Company had planned to put in a 125 home development on part of the 5,000 acre tract and probably convey the rest of it back to the Federal Government to take their tax break for what they make on the other property. Gaines continued by asking Carter if the two sales were in any way related.
Carter said he was not familiar with the property Gaines referred to. He said he was familiar with a tract of land recently sold by his group to a group appearing to be the same individuals. As far as any relationship between the two property transfers, Carter said he was unaware of any relationship between the two properties. Carter would not consider any of the comparables prepared by Gaines because he told the group that they were too small.
Gaines told the group that U.S. Senator Lamar Alexander has been very involved in both sales, through his friends, children and supporters.
Carter said Timbervest was apprised of that relationship during the first transaction and that there were government officials involved in the investment group that was considering purchase of the property.
Continuing, Gaines noted that Terry Bowerman, Unaka District Ranger stated in the same Greeneville Sun article that “Rocky Fork is a Forest Service’s top internal priority for acquisition….” Gaines went on to tell the group that Alexander had confirmed this fact to him in a meeting in Washington, and that he hoped to get some more money on this up in Washington on this project.
With regard to the Greene County portion of the Rocky Fork property, Gaines told the group that you simply could not “get there from here.”
The tract cannot be accessed from the Greene County side and access must be made through Unicoi County and the Clearbranch Exit.
“It is my obligation when we are appraising property, not just to use sales but we are allowed to use contracts as well. All evidences of sound intrinsic value. You had a suitor - you had a person willing to buy it prior for about – the word around town was $40 million,” Gaines said.
Gaines said he was not sure that Carter and Timbervest were aware of the situation in Unicoi County. “People are leaving Florida – the hurricanes have driven up taxes, the cost of infrastructure, insurance is outrageous. People are leaving the area in and around Atlanta because it’s always under construction – can’t get through there. It’s dangerous. A lot of folks have fled to the mountains of Western North Carolina and there are numerous gated communities in Western North Carolina, and I get a new offering about every six months or so from a company that’s wanting to do the same thing. But, what’s happened in North Carolina is land in North Carolina is overpriced, significantly more than Unicoi County, Johnson County, and Carter County,” Gaines said.
North Carolina also has an income tax and a personal property tax, the Assessor said. According to Gaines, people are coming to Unicoi County and buying property just to claim this location as their primary residence.
He said that he had two parcels on the books – Evan Gregory Lynch, a 20 acre tract – just a little hunting cabin, basically - sold for $150,000 in 2005.
Gaines continued to provide other property information to Carter and the Assessment Board.
Carter asked which four or five of the properties Gaines threw out were listed on the 24 in the top parcel.
Gaines told the group that there was a website for “SaveRockyFork.org,” Why you should care about Rocky Fork. He said the site included information on the Rocky Fork watershed and the fact that it is an outstanding scenic area, and has a highly diverse wildlife habitat.
“Here’s my position on this. I would have liked to see the property developed, quite frankly, as a gated community. As it is, it won’t have near the impact upon our tax base. The folks who were going to go in there at first were talking about tracts and lots in there at $200,000 to $400,000 per lot which would be probably about an acre and a lot of that property would be protected as it is in other developments of that kind,” Gaines said. He added that the people who would buy into such a development would have sufficient income to be able to purchase that kind of property. These people would most likely have their children through school, and such a community would have private roads and their own security. That would mean that there would be no added burden to the tax base. Gaines estimated that $1 Billion in new jobs and business could be added to the county’s economy from such an endeavor.
“I’ve said to Lamar Alexander and Bob Corker and to David Davis that they need to be looking at the impact on Unicoi County because we’ve got already half of this county owned by the federal government. We’ve got unfunded mandates from the State of Tennessee to build more classrooms. That’s what’s costing us $22 million,” Gaines said. At one time, Gaines said he was told that the state was ready to put about $18 million in the property to preserve this land. He went on to say that at one time, the federal government was being requested to put in $14 million originally. I think they’ve set that at about $8 million now. “The Nature Conservancy advised us that they expected to receive approximately $18 million from the state and $14 million from the federal government and the balance of the $40 million purchase price from private sources.
Gaines said the federal government pays Unicoi County a fraction of what they owe the county – and we’re entitled to under Impact Aid.
“The $5,000 per acre we’ve gotten off this land, in my opinion, is very reasonable and generous, in particular the contract and offers that have been made on it,” Gaines said.
Carter said he wanted to go back and address a few things that Gaines had brought out during the meeting.
Gaines brought in Doug Treadway, a local surveyor, who told the group that the first offer made on the Rocky Fork Property was in the neighborhood of $35 million. He told the board that it was his recollection that the people who initially looked to purchase the Rocky Fork land intended to develop 1,000 to 1,500 acres of the land. Treadway said that the lay of the land will actually protect it from development. He added that there were probably 2,000 good acres of Rocky Fork. Treadway said he felt that the people making the initial offer to purchase Rocky Fork meant to develop only about 2,000 acres, and still protect the natural setting.
When Gaines asked Treadway what happened to the initial deal, Treadway said news of the purchase got out before it was actually official. Word got out before the negotiations were finalized. Treadway said that this deal was within a month of being finalized when it fell through. Because of the press, Treadway said the developers backed off because they didn’t want to get tangled up in a problem.
Since that time, Treadway told the Board, he had several others to contact him, but for the same reason, they backed off on the Rocky Fork property. Treadway also told the group that the top of the property best lends itself to construction, up around the lake. He said one would be talking million dollar homes in that vicinity.
Gaines added that within 20 – 30 years of developing the Rocky Fork property, service industries would spring up in the county to service the new residents and their homes, bringing lots of good jobs in the trades - jobs like custom carpentry, custom brickwork, and other skills.
Talking directly to Carter, Gaines said, “I think we’ve done you a favor with this appraisal.”
Carter pointed out to the group that the figures given by Gaines were “market value.” He said he took issue with the Forest Service speaking, and that speaking penalizes his agency. Implying that Gaines was biased, Carter said he took issue with Gaines saying that he does not have a problem with the sale. He told the Board that he (Carter) had a sworn affidavit from one of Timbervest’s analysts that states that he objected to the sale because it would take out tax dollars.
Gaines added that the main reason he was backing away from the Rocky Fork property acquisition was because the matter is a private purchase and involves the present owner and a potential buyer. He said he would not like for someone to come in and tell him how to sell his property or purchase someone else’s land. “I didn’t want somebody – and I’ve said this all along – some petty politician telling me how to sell my property.”
In closing, the Unicoi County Equalization Board rejected Timbervest’s appeal on the basis that the board felt that the appraisal was fair.
