Agenda 07/22/2008 Item #10EAgenda Item No. 10E
July 22, 2008
Page 1 of 9
EXECUTIVE SUMMARY
Recommendation that the Board of County Commissioners provide the County Manager or his
designee with guidance on making an offer for the Pepper Ranch, a priority Cycle 5 Conservation
Collier acquisition proposal, considering an actual appraisal value that is higher than originally
estimated and recommended conditions of sale.
OBJECTIVE: To have the Board of County Commissioners (Board) direct the County Manager or his
designee to make an offer for the Pepper Ranch and to consider and make recommendation on the
particular conditions of the acquisition, including presence of an oil, gas and mineral lease, structures and
cattle dipping vat.
CONSIDERATIONS: On January 29, 2008, Agenda Item lOF, the Board approved a Conservation
Collier Land Acquisition Advisory Committee (CCLAAC) recommended Active Acquisition List
(Exhibit 1), with changes, and directed staff to actively pursue acquisition of the properties under the
Conservation Collier Program. At that time, the Board approved the 2,500 -acre Pepper Ranch property as
an "A -1 +" property with an estimated value of $35 million. Staff subsequently moved forward to obtain
due diligence reports and two independent appraisals in order to make an offer pursuant to the
Conservation Collier Purchase Policy (Resolution No. 2007 -300). The two appraisal firms retained were
Anderson & Carr and Callaway & Price. The two independent appraisals came back with appraisal
values of $36 million (Anderson & Carr) and $36.5 million (Callaway & Price). The average of the
appraised values is $36.25 million and would have constituted the County's offer. However, after review
of the appraisals, there was a question as to whether oil, gas and mineral rights were included (less those
under the two quarter- sections where the oil wells stand) and regarding the appraised value for the
Stewardship Sending Area (SSA) #7 lands.
The answer to the first question is that the oil, gas and mineral rights were part of the appraised property
and that the appraised values included the oil, gas and mineral rights except under the two leased quarter-
sections. Real Property Management staff has received written confirmation of this from the appraisers.
In regard to the second question, the County's appraisers were asked to clarify the value of the SSA. In
addendum letters dated July 3rd (Callaway & Price) and July 7d' (Anderson & Carr) the appraisers
adjusted the value of the entire property to $32.4 million (Anderson & Carr) and $34 million (Calloway &
Price), averaged for a new lower offer value of $33.2 million.
Staff has obtained a Phase I Environmental Site Assessment (ESA) which recognized three environmental
concerns associated with the property: one former cattle dipping vat, three oil production wells and one
500 -gallon diesel Above - ground Storage Tank (AST). A Phase II ESA has been recommended and is
underway. The Phase II will identify whether there are contamination concerns at the oil well sites and at
the 500- gallon diesel AST site. The three oil wells are under an oil, gas and mineral lease to Southern Oil
Exploration, which has been assigned to Newport Oil as part of a bankruptcy proceeding. The property
owner has provided us with a copy of the oil, gas and mineral lease and it is under review by the County
Attorney. Staff has ordered an abstract of the oil, gas and mineral rights to determine if any rights are
held by third parties. Cattle dipping vats were constructed from the 1920's through the 1960's as a
requirement of local, state and federal programs for the prevention, suppression and control of a cattle
disease borne by ticks, with an estimated 3,200 of them constructed around the state. The contents were
pesticide "soups" containing Arsenic, Toxaphene, DDT, DDE and Lindane — all now recognized as
carcinogenic and reproductive system toxins and not registered for use by the Federal Environmental
Protection Agency. The property owner has ordered a site assessment report to delineate the extent of soil
Agenda Item No. 10E
July 22, 2008
Page 2 of 9
and groundwater contamination of the former cattle dipping vat. Results from this assessment will define
potential remediation actions and costs — to be borne by the property owner.
The CCLAAC was presented with information regarding the environmental concerns and existing
structures at its regular June 9h public meeting. At that time, the initial appraisal values had been
received but were not yet released. The CCLAAC made recommendations regarding the environmental
concerns and structures, as noted below.
• The current owners agree as part of the contract to remove /remediate the cattle dipping vat
within a certain time -frame after closing, escrowing funds to perform such remediation,
• Also as part of the contract, the 500 gallon diesel AST is removed and necessary clean up done
within a certain time -frame by owners after closing,
• To acquire the Pepper Ranch subject to the existing oil, gas and mineral rights lease.
• The structures identified by Conservation Collier subcommittee to be removed within a certain
time -frame by the owner post acquisition.
Subsequently, at a June 25, 2008 joint meeting of the Ordinance, Policy & Rules and Lands Evaluation &
Management subcommittees, the owners of the ranch submitted to subcommittee members a written
proposal for conditions of sale, which coincided with the June 9 "' CCLAAC recommendations. A copy of
the June 24s letter from Pepper Ranch owners and proposals for conditions of sale is attached. The
subcommittees accepted the owner's conditions of sale proposal and unanimously voted to recommend
making the offer for Pepper Ranch.
At the July 14a' CCLAAC meeting, the full committee made a unanimous recommendation to make the
offer of $33,200,000 with the following conditions:
• To amend the first condition of the proposed special conditions of sale attached to the owners'
letter to staff dated June 24, 2008, to state that the only oil, gas and mineral rights that are to be
reserved by the owner are those under the two quarter sections where the oil wells are located
and which are under lease; and
• To strike 4.c of the proposed special conditions to allow cattle to remain on the property under a
lease arrangement agreeable to both the owner and the County.
FISCAL IMPACT: An average of the two appraisal values, or $33.2 million would constitute the offer
amount under the Conservation Collier Purchase Policy. The County would need to borrow funds to
complete a purchase. Staff has been advised by the Office of Management and Budget that bonding
capacity remains for this purchase. Additional costs include $58,704 already expended for due diligence
and $84,000 expected for closing costs. The Conservation Collier ordinance, 2007 -65 (Section 9.2.),
advises that acquisition of property shall not be constrained based on the immediate availability of
management money. While grants and management partnerships will be sought first, the management
fund currently contains over $10 million.
GROWTH MANAGEMENT IMPACT: The 2,500 -acre Pepper Ranch is part of the Rural Lands
Stewardship Area (RLSA). There is a 985 -acre portion of the ranch that has a Stewardship Sending
Agreement (SSA #7) placed over it where stewardship credits have been removed, constituting a
conservation easement. The Growth Management Plan (GMP), Future Land Use Element, RLSA
Overlay section, (VII) Policy 1.18, (VII) Policy 1.4 and (VII) Policy 3.8, clearly contemplates the
potential to augment the RLSA Program through fee simple acquisition of lands identified as the highest
priority for natural resource protection even if they are within Stewardship areas. Pepper Ranch is within
such an area (Florida Forever CREW Project Boundary) identified by the state of Florida (Florida Forever
Agenda Item No. 10E
July 22, 2008
Page 3 of 9
Program), the University of Florida, The Florida Natural Areas Inventory and the Florida Fish and
Wildlife Conservation Commission as a conservation area of the highest priority.
LEGAL CONSIDERATIONS: The acquisition of Pepper Ranch would meet the goals, policies and
objectives of the Conservation Collier Program as established by the Conservation Collier
Implementation Ordinance. The offer is required to be the average of the two appraisals. Certain costs,
as identified within the fiscal impact section are not required to be paid by the County and may be
negotiated with the Property Owner and incorporated into a Purchase Agreement as a condition of the
purchase. Additionally, once the Oil, Gas and Mineral abstract is received and all mineral rights are
identified, the County Attorney Office, along with Real Property Management staff, will determine the
best way to ensure that "mineral rights" that may interfere with the Conservation Collier goals, policies,
and objectives are released, acquired, terminated, or otherwise extinguished. It will likely be necessary
to address any oil, gas, and mineral rights concerns, once identified, in the Purchase Agreement. Any such
Purchase Agreement would be reviewed and approved for form and legal sufficiency prior to Board of
County Commissioner consideration. This item is legally sufficient for Board of County Commissioner
consideration. - JAB
RECOMMENDATION: The CCLAAC recommendation, supported by staff, is to make the offer of
$33,200,000 with the following conditions:
• To amend the first condition of the proposed special conditions of sale attached to the owners'
letter to staff dated June 24, 2008, to state that the only oil, gas and mineral rights that are to be
reserved by the owner are those under the two quarter sections where the oil wells are located
and which are under lease; and
• To strike 4.c of the proposed special conditions to allow cattle to remain on the property under a
lease arrangement agreeable to both the owner and the County.
Additionally, upon acceptance of the County's offer by the property owner, that staff be authorized to
move forward to obtain borrowed funds in the amount of $33.2 million pursuant to the means advised by
the County's financial managers.
PREPARED BY: Alexandra J. Sulecki, Sr. Environmental Specialist, Facilities Management
Department
Page I of 2
Agenda Item No. 10E
July 22, 2008
Page 4 of 9
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COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
Item Number:
10E
Item Summary:
Recommendation that the Board of County Commissioners provide the County Manager or
his designee with guidance on making an offer for the
Pepper Ranch, a priority Cycle 5
Conservation Collier acquisition proposal, considering
an actual appraisal value that is higher
than originally estimated and recommended conditions of sale. (Alex Sulecki, Senior
Environmental Specialist)
Meeting Date:
7/2212008 9:00:00 AM
Prepared By
Alexandra J. Sulecki
Senior Environmental Specialist
Date
Administrative Services
Facilities Management
7/8/2008 3:48:42 PM
Approved By
Melissa Hennig
Environmental Specialist
Date
Administrative Services
Facilities Management
71812008 4:07 PM
Approved By
Skip Camp, C.F.M.
Facilities Management Director
Date
Administrative Services
Facilities Management
7/812008 5:12 PM
Approved By
Jennifer A. Belpedio
Assistant County Attorney
Date
County Attorney
County Attorney Office
719/2008 1:27 PM
Approved By
Len Golden Price
Administrative Services Administrator
Date
Administrative Services
Administrative Services Admin.
7/912008 4:58 PM
Approved By
OMB Coordinator
OMB Coordinator
Date
County Manager's Office
Office of Management & Budget
711012008 8:07 AM
Approved By
Laura Davisson
Management & Budget Analyst
Date
County Manager's Office
Office of Management & Budget
7110/2008 9:07 AM
Approved By
John A. Yonkosky
Director of the Office of Management
Date
County Manager's Office
Office of Management & Budget
711 01200 8 12:10 PM
,.. Approved By
James V. Mudd
County Manager
Date
Board of County
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Page 2 of 2
Agenda Item No. 10E
July 22, 2008
Page 5 of 9
Commissioners County Manager's Office 7/1412008 3:54 PM
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Agenda Item No. 10E
Exhibit 1 July 22, 2008
Conservation Collier Cycle 5 Recommended January 29, 2008 Page 6 of 9
Active Acquisition List
NAME
Estimated
vela.
Seem)
Estimated
Value per
a51J.1100
Prapoaed Lilt
Category
Priority
Detignation for
"A" Category
Properties
Pepper Ranch -10 parceb,
535,000.000
25110.110
A
Y
FriiWt
£68.0011
217
S21i
A
1
(remaining lantern
£3.911.020
193. 22
in
Herman
S2n,220
1.14
£?3.000
A
1
",f c central,
£26120
LIJ
623.000
A
I
s Deviase
$164.3511
>l.n5
S19.000
A
1
as Romak
D
526,A0
1.14
523,000
A
I
- is
Z : 9fi1Her
S26=20
1.141
523.111111
A
`1 Trinh -2
39510110
51
519,000
A
Deritae
5225,000
-
$45.000
A
Dvchm
$1.515.1100
1.25
£1,2,111.000
A
-
Raise Homes -3 pirrels
94-5.0011
4
$123.'50
A
Trinh- 1(Mtllvane Marsh Project)
£640.000
80
58.0011
A
ALMLLC
£2213100
6'
532,9g5
A
3
Ara
5141.000
9.05
£20JIUM
A
Y Ariaa(2 parrels
$139,0011
6.94
S2(029
A
3
Ayr.
S764500
118
$24.05?
A
3
Blake
545.1100
1.511
$28302
A
3
Fauns
5308.11011
6iR41
45,029
>
3
Fernandez
$90_1011
3.Ml
8241130
6
3
�j Gancon
561.111111
2.34
S26AfiR
A
3
G0re1 0 parcel. )
£3911611
1218
S ^_'_.WO
A
3
na Gam -2 P1 Pwi
U
522114020
199
£28.11011
3
3
May
591.11(111
fi."
530.000
a
J
Z Mohabir
S131on0
-
S20.000
A
3
Vol
5135,11110
6]6'
512910
A
3
Can Intel
$365,12011
4_16
W).044
A
3
a S: Melon
590'11110
III
.$90,000
A
3
C ° Stir.,
a
$96,1100
i 2"
S80.000
A
3
a Van Clem e(4 Purcell)
%2.2_1 110 0
38.-21
S59.904
A
3
CYCLE 5 A -LIST SUBTOTAL
548,746330
2,955.751
$16.492
Hamilton`•
51.625.000
11141
S8XI,
A
RJSLLC•`
S2029101
2102
50.634
F 6mI man- 12,5 at..
5225.000
12.5
S'19 n0U
4
Winchester Head Project (remaining)
£2dfi4.010
123.4
A
PREVIOUS CYCLES A -LIST TOTAL
I4.516.510
352.92
$12,798
. <x.tcl7 , , A.IIST SUBTOTAL
ti4553,263.5411''i,NI
.308.67
IN; ',-In 6.098
'"§ 3.;i,
Contemn. (Rivers Road -2 parcelr)
cN'r p„
fl. -'_
I Ml ll(W
13
So
.i,pnu.Op1.
0
1` 'Aaiv -: °. BB- LISTSrBTOTAL
'3.'" $6.892.000
`3".'v' s n 85
- = '581,082
Bailey Trust
17,111,000
09
?,83,505
C
%'trick
''3T ?110
5
52.500
C
Cam bell
5'12.500
5' -_00
<'
Darby Tr
112.500
52.5011
t'
Diekow
W 5012
DindalWelsb
£13_410
a5n0
C
5 Freem.r
sl2.aa1
s sou
c
no
Griffin
$12.500
525110
yHamilton
c11p2:
4. "'
5.2 <oo
C
g° Mc6wain
512500
52.EUn
t
U Radol F
£25.0011
111
$]9Un
(I
Schwab
56.25Il
2,
C
Street
56.241
2.5
$2.51111
C
Tacker
12,11,11
I0
r Sou
[-
Winebrenner
$114011
- n.5m1
C
Rirbv
$120.U0u
1 £1211.1100
f.
Murphy
51'"0,000
1 5112004
C
Purpero
145'1200
2.94
$155.442
-C -LIST SUBTOTAL
I :° `S1.666,425
is am- -90.68
`, ,SHL377
GRAND TOTAL $61,821,265 3,484.35 $17,743
'Regneat is Ic re- authorize the M.M- parcel project and cominuem buy as parcels became available.
"App, -vrd but not Yet pu¢h.,ed
•
Lake Trafford Ranch, LLLP
June 24, 2008
Ms. Alexandra J. Sulecki
Collier County Facilities Management Dept.
3301 E. Tamiami Trail, Bldg. W
Naples, Fl. 33412
Re: Lake Trafford Ranch, LLLP — Pepper Ranch
Dear Ms. Sulecki:
Agenda Item No. 10E
July 22, 2008
Page 7 of 9
This letter is intended to address certain aspects of the property which the County staff
has determined should be addressed in an acquisition of the above property by the County, as
well as some aspects of a sale that we wish to have addressed. A subcommittee of the
Conservation Collier Advisory Board is scheduled to meet today to address these conditions with
a goal of making recommendations to the entire Advisory Board. Attached is a list of these
special conditions and aspects of the sale. It describes the action that we, as a potential seller, are
willing to take. This is submitted to assist the subcommittee.
At this time the County has placed the property on it's A list for acquisition and has
commissioned and received two appraisals. The County has also received reports from ECT
Environmental Consulting & Technology, Inc. concerning environmental assessments and
Scheda Ecological Associates, Inc. concerning the potential mitigation value of the property.
The average of the value of the two appraisals is $36,250,000.00. We understand that the
County has not yet decided to make us an offer. Consistent with County policy, we will agree to
sell for the average amount of the two appraisals and in accordance with the conditions in the
attached list of special conditions of sale.
We recognize the environmental factors that complicate the final decision. As shown in
the attached special conditions of sale we are willing to address these in a manner that we believe
should alleviate any significant concerns of the County. We also agree to pay for the cost of
performing the additional site analysis respecting the old cattle dipping vat, diesel storage tank,
and oil wells on an expedited basis in order to enable the County to meet our requested schedule.
It is our request that the Board of County Commissioners be asked to approve a contract
at this price and consistent with the special conditions attached at its meeting on July 22, 2008
with a closing scheduled by September 30, 2008. We are pleased to answer your questions and
provide additional information as needed.
Very truly yours,
Thomas Taylor as a general partner
Chris Allen as a g� partner
• Agenda Item No. 10E
July 22, 2008
Page 8 of 9
� LAKE TRAFFORD RANCH, LLLP
PROPOSED SPECIAL CONDITIONS OF SALE
1. Seller will retain and reserve, and not sell or convey, in the deed of conveyance,
the oil, gas, mineral, and other subsurface rights below a depth of 150 feet from the surface
together with a right of entry to explore and extract the reserved materials, as well as an
appropriate access agreement or easement.
2. The sale will be made subject to existing oil leases to the extent they may
encompass any area not to be reserved in item 1,
3. Seller will retain and not sell or convey stewardship sending area credits
established pursuant to the existing Stewardship Easement Agreement.
4. The seller will agree to the following undertakings:
a) Demolish and clear debris from all known structures on the property
except the lodge, caretaker house, and pole barn near Lake Trafford. This is to be completed
within sixty (60) days after closing by seller.
b) Pump out, crush, and fill all known septic tanks on the property in accord
with applicable Collier County and State of Florida requirements except for those serving the
structures to be retained. This is to be completed by seller within sixty (60) days after closing.
c) Seller to remove cattle from the property within sixty (60) days after the
closing.
d) Remediate any soil and groundwater contamination related to an above
ground diesel fuel tank to levels required by state law. This is to be completed by seller within
ninety (90) days after closing.
e) With the approval of Conservation Collier staff the seller will engage HSA
Engineers and Scientist as a consultant to determine the levels and extent of any contamination
resulting from the abandoned cattle dipping vat near the existing cattle pens on the property, and
prepare a plan of remediation. The consultant will also provide an estimate of the cost and time
to perform any remediation. Based on this the extent and scope of the remediation prepared by
the consultant, a plan will be mutually agreed on by the seller and the County. The seller will
pay for the cost of remediation in accord with this mutually agreed plan. The remediation plan
will commence implementation immediately after closing. The County agrees to cooperate and
assist seller in its efforts to recover any cost of remediation for which the seller may be eligible
for under state or federal programs.
5. Responsibility for any contamination from the oil wells that may currently exist,
or exist in the future will be governed by state law and regulations.
Page 1 of 2
E
• Agenda Item No. 10E
July 22, 2008
Page 9 of 9
6. A portion of the proceeds of the sale will be retained in escrow pending
performance of the work in item 4 above. The amount will equal 100% of the estimated cost of
the work in 4(a) - (d), and 150% of the cost of the work in 4(e). As each item of work in 4(a) —
(d) is completed the amount retained for it will be released to the seller. As work is completed in
4(e) periodic partial releases will be made in percentage progress payments according to any
remediation contract(s).
r!do.e,d atl\hke vnffo.tl m..hk..se...... teller -liv d«
Page 2 of 2