Gulf Harbors Golf Course Lawsuit Summary As of January 1, 2018
Pasco County commissioners voted on September 27 2016 to create a Municipal Services Benefit Unit (MSBU) to purchase a defunct and contaminated golf course in the Gulf Harbors residential sub-division. This MSBU was created in order to tax the homeowners for that part of the purchase that was not being paid for with county funds. Specifically, the purchase price is $1,200,000, and the county will be contributing $600,000 under the Environmental Land Acquisition and Management Program, which is funded from Penny for Pasco. The $600,000 was arrived at as a result of an appraisal that ELAMP obtained for that amount. The appraiser hired by the county, at the direction of the county, used a hypothetical condition that 80 homes could be built to arrive at the $600,000 value. The same appraiser a year earlier, without that hypothetical condition, valued it at only $275,000. There is ample evidence that no homes could actually be built on that site. The balance of the purchase price, being $600,000, plus all costs of acquisition, improvements, and annual maintenance are to be taxed to the homeowners of Gulf Harbors by way of the MSBU.
Two individual residents filed a lawsuit pro se to challenge the land purchase and the creation of the MSBU. That suit is styled Diane Theriault Kobernick and Susan Levine v Pasco County, Florida, and was filed in the Circuit Court of the Sixth Judicial Circuit in and for Pasco County, under Case No. 51-2016-3484-WS/G.
The suit complains that the county did not follow its local ordinances and state law in how the MSBU was passed, and how the property was to be purchased, including the fact that the price was twice the appraised value, even using the suspect appraisal. A vote of the homeowners was held in July 2016, and all the documentation provided for the vote, including a letter accompanying the ballot, stated that this vote was being conducted under Chapter 94 of Pasco County Ordinances, which details the voting procedures. The purchase contract also contained a clause that the purchase was subject to a positive vote of the homeowners and creation of the MSBU. The county claimed that the vote passed with 58% of the returned ballots voting in favor. A detailed audit conducted by several residents uncovered multiple irregularities in the voting process and the returned ballots, and the audit results showed that only 47% of the returned ballots voted in favor, so the vote did not actually pass. This is one of the counts that is brought up in the suit. In the county’s answer to the suit, they then claimed that they did not use Chapter 94 to pass the ordinance creating the MSBU, but rather they only used Title XI Chapter 125 of Florida Statutes. They also addressed the vote by saying that the vote was only to gauge the interest of the community, and that it did not count and was not binding on the county commissioners. That claim was also challenged in Plaintiff’s response to their answer.
It should also be noted that the county and a few dedicated residents conducted an aggressive campaign to convince the community to vote in favor of this purchase, including misrepresenting what could be built on this site in the event the county did not purchase it. Subsequent to the vote, this misinformation has been disproved, and many of those that voted in favor have indicated that now that they are better informed they would have voted against it. The lawsuit seeks to have the MSBU voided, and if the county wants to continue with the purchase they should conduct a new vote of the homeowners. The county is aggressively fighting the lawsuit rather than conducting a new vote.
A Motion to Dismiss was brought be the county, and that motion was briefed and a hearing held. The motion was defeated. Currently, interrogatories and production have been exchanged, and discovery is continuing. Recently, 14 intervenors were allowed into the case on the side of the county. The attorney representing all these intervenors is also representing the majority lienholders on the property, who would only end up being paid if the sale were consummated. Coincidentally, the negotiated purchase price of $1,200,000 is just enough to ensure that the lienholders are paid in full.
The county was on a path to acquire this defunct golf course before even conducting any environmental testing. The purchase contract and price were negotiated by the county, and although the contract provides that the county can terminate the contract if contamination is found, it also provides that the county can continue to close the purchase in the event contamination is found, as if no contamination were present. The original target date for closing was October 2016, but did not occur due to the objection filed against the ordnance creating the MSBU, and the subsequent lawsuit. An initial environmental report was then delivered Nov 30. It recommended further testing, which was then done, and that testing revealed multiple contaminants in the land that exceeded the FDEP Target Cleanup Levels. The engineering firm that did the testing recommended much more extensive testing to define the scope of the contamination, and provided a range of $315,000 to $4,700,000 as possible remediation costs. In a response to an interrogatory, the county disclosed 8 other land purchases in excess of $500,000 that it purchased without conducting any environmental testing prior to closing. Several of those have subsequently been found to be contaminated as well, and it is likely that the cleanup costs are going to fall on those homeowners who were assessed by an MSBU.
The cost of this golf course purchase to each of the homeowners was represented by the county to be $500, spread over 5 years on their tax bills. However, this does not include any potential capital improvements that may be approved by the county, which retains full decision making authority over the future use. This estimate was also done before any contamination was discovered, or disclosed. The cost to remediate is unknown at this time since the more extensive testing has not yet been done, but the high end of the estimate would bring the cost closer to $3,000 per homeowner. Our subdivision has a large number of seniors, many of whom are living on fixed incomes, and we have been told by several of them that this extra cost would be too much to bear.
The ability to use an MSBU by local government was created by the Florida State legislature. The stated purpose of an MSBU was to provide for infrastructure and services deemed necessary and essential to the community. Using this statute to purchase a piece of land we feel is an improper use of the statute. If allowed to stand, this would open the door for local governments throughout Florida to use this statute for any purpose they desired, without oversight. This taxing authority is outside the budget, and so is essentially an “off the books” expenditure that can be used to avoid budgetary scrutiny. The use of an MSBU has become very popular in Pasco County in recent years, including for purchasing other defunct golf courses, and needs to finally be challenged.
The original objection to the MSBU and the lawsuit to contest it were filed by the two individuals on their own, pro se. The county has chosen to continue to fight the lawsuit, spending taxpayer money to do so, rather than simply conducting a new vote of the community to follow the will of the people who would end up being taxed. Hence it was necessary to hire an attorney to continue to prosecute the case and to prepare for trial. We intend to see this through to the end.