Fri
Jul 15 2011
04:12 pm

On Wednesday Knox County auctioned off 160 acres of land in Solway for $2 million, pending County Commission approval. 30 of those acres house the Solway green-waste facility that has been leased to Natural Resources Recovery of Tennessee for several years. The rest of it is a county park, Bigfoot Park, or it was.


continued...

In theory, the lease agreement was supposed to be a money maker for the county, in addition to providing a public disposal site for homeowners and businesses with brush and yard waste. Because the contract was not properly followed, the county's income fell short of expectations, but over the past year, NRRT paid the county $84,614 in profit sharing.

Burchett supporters have celebrated the fact that this sale puts the property back on the tax rolls, but using the appraisal from the auction ($1.19M) as the assessed value, NRRT would pay $28,084/yr in property tax. Is a $56,530/yr drop in revenue really something to celebrate?

I can do math, but I'm hardly an expert in economics. I'd like to be convinced that I'm misunderstanding this situation. There are folks on KnoxViews who can analyze this sort of thing better than I. To me it looks like Burchett is behaving like a junkie at a pawn shop, converting assets to cash at a lousy price so that he can keep pursuing his Carter school promise after the free market let him down by producing a low bid no better than the price tag the School Board had placed on new construction.

Can anyone put together a comprehensive look at the finances that shows this transaction to be a wise move, and not a desperate squandering of assets for short-term cash? And is the county really selling a park?

301
like
SamIAm's picture

According to the Knoxville

According to the Knoxville News Sentinel, Knox County has spent an average of $245,000/ yr on funding the facility since taking it over. If that's the case, then that would mean, using your numbers, that Knox County would actually save (245,000-84,614+28,084) $132,302. Honestly, that sounds like a smart move to me...park or no park.

rikki's picture

Please complete the analysis.

Please complete the analysis. I missed the $245k/yr support, but adding that in does not make this a smart move.

The land itself has value, and that must be weighed against operating losses. At $132k/yr expenses and a $2M selling price, it is 15 years until the county actually sees a loss, longer if the land appreciates in value, as would be expected with real estate.

Also, some level of expense can be justified if:

  • the facility provides a service to citizens and businesses
  • that service is subsidized or even free
  • the facility supplies city and county maintenance crews with mulch and soil free of charge
  • the facility uses local wastes that would otherwise be sent to landfills (such as zoo wastes and fly ash)
  • more...

Whether the Solway facility does enough of all those things to justify $132k/yr is debatable, but that's the kind of analysis that needs to be done. We need to treat this like a business decision.

I don't see why the county should be paying anything at all to fund NRRT's operations. The business approach should be to secure an operating agreement that pays for itself at the very least. For example, I'd lower or eliminate the $245k, perhaps offer a small escrow fund as payroll insurance, and require NRRT to pay back the county's yearly investment prior to any profit taking, lobbying or political contributions.

In addition, there are rumors of an industrial, wood-fueled boiler of some sort to be built in the area, and that will expand the market for green-waste products. Finding an operating agreement that maximizes the value of the Solway land should not be hard. That facility can easily justify itself and is worth more kept than liquidated, given a sensible contract and a reputable operator.

rikki's picture

Apparently no one is

Apparently no one is interested in breaking down the numbers and showing that this was actually a smart move. I imagine "putting property back on the tax rolls" is more useful as a political slogan than a financial principle anyway.

WhitesCreek's picture

So by that reasoning we

So by that reasoning we should auction off the Marine corps. They've lost money every year since that Montezuma and Tripoli thing.

Conservatives are so stupid it astounds me at times.

SamIAm's picture

Did you really just compare

Did you really just compare the sale of a brush collection and mulch facility to selling the Marine Corps? Now, really...who's stupid? It's simple math, but some moron like you wants to ignore basic math.

It is the job of the the federal government to provide for the national defense. Providing brush collection services isn't exactly on the same level, nor is it something that government is "supposed" to do.

If there was a park there, who cares? According to the parks and rec website, the only thing that was there is a 3-mile hiking/biking trail. Big deal. I bet the vast majority of people in Knox County never even knew this thing existed.

Pam Strickland's picture

Wow, you are being amazingly

Wow, you are being amazingly defensive. Do you work for Burchett?

SamIAm's picture

No, I don't work for

No, I don't work for Burchett. I just take great offense to being called stupid simply because I made a relatively party-neutral observation about the math that seems to be behind the sale.

I don't feel like I was being defensive in my first post, simply responding to another post. I think Rikki's post was legit. She asked a question, stated her opinion. No bit deal. Nothing personal. I saw it a different way and laid out my point of view. I didn't attack Rikki or "liberals" or anyone for that matter. Then, I most definitely did get defensive when WhitesCreek came on here and started calling names because he doesn't agree with my reasoning. I bristled. That's all.

I think we can all disagree without resorting to playground tactics. I played my part in that, I'll admit, when I threw out "moron" in my response to WhitesCreek. Probably not the best way to have countered the situation.

rikki's picture

For what it's worth, you

For what it's worth, you haven't offended me in any way. I am a he, however, but one who takes 'she' as a compliment ;)

cubedoctor's picture

A he?

You are a heh heh…..you troublemaker. :)

Rachel's picture

According to the parks and

According to the parks and rec website, the only thing that was there is a 3-mile hiking/biking trail. Big deal. I bet the vast majority of people in Knox County never even knew this thing existed.

I live in the city. I don't use county parks and I don't know where most of them are, despite the fact that I pay taxes to maintain them. That doesn't mean I think it's a good idea to get rid of them.

The fact that this property contained a park is brand new news to me, and I suspect to pretty much everyone. I'm wondering why that wasn't made clear before the sale, or if (and this possibility makes me cringe) the Mayor wasn't aware that part of the property was a park. He didn't seem to initially be aware that he couldn't sell the animal shelter because the city owns half of it.

bizgrrl's picture

The property backs up to

The property backs up to Melton Hill Lake. Someone thinking long term for new development?

metulj's picture

Ding. Ding. Ding.

Ding. Ding. Ding.

cubedoctor's picture

Too steep to develop

Too steep to develop…..even without the Hillside\ Ridgetop Plan

But I do like to hear you Ding.

bizgrrl's picture

Burchett said Dadgum? He's

Burchett said Dadgum? He's right out of Li'l Abner.

Shannon S's picture

He is not an engineer

Why was Van De Vate at the auction prancing around with a young girl on his left and one on his right, in golf shirts with Knox County logos on the front? He was on the staff of the past county mayor when this land was dedicated as a park. Why did he not tell Burchett 130 of 159 acres was dedicated as a park? Why is he spending money through Knox County Public Works, $250,000, to clean out the contaminated holding pond on the site and put in the third liner Knox County has paid for, so NRR could compost and get paid for taking zoodoo and sewer sludge?

Why is Van De Vate still here anyway? He is not an engineer. The head of Public Works has been an engineer in the past. Do we keep engineers employed in Public Works to fill the shortcomings in Van De Vate’s qualifications to perform the job as the head of Public Works?

Was Bruce Wuethrich run off so Van De Vate could have the job?

Bbeanster's picture

Actually, Shannon, Bruce

Actually, Shannon, Bruce Wuethrich (whom you wanted fired) was not an engineer – not that facts mean anything to you. Your personal grudges are tiresome.

Shannon S's picture

Strange

Strange, he works for an engineering firm now. Can you prove your comment.

metulj's picture

That engineering firm has a

That engineering firm has a billing clerk. By your logic, the billing clerk has to be an engineer. Stick around. Since the Coward left the county, we haven't had anyone to remind us how moronic the drivel can be.

Shannon S's picture

logic

Wuethrich is a billing clerk?

metulj's picture

Wow. I mean just 'Wow.'

Wow. I mean just 'Wow.'

Bbeanster's picture

Bruce Wuethrich has a degree

Bruce Wuethrich has a degree in hydrology.

Shannon Szito has an obsession with the mulch facility, loves R. Larry Smith and hates Amy Broyles. She'll be trashing Madeline Rogero any minute now.
She is a #9 wannabe. Minus 2.5, maybe.

And I'm being kind.

Shannon S's picture

hydrologic engineer

Who is Shannon Szisto?

No wonder they took you off reporting facts and put you in the opinion section.

So you were wrong, he is a hydrologic engineer?

Rachel's picture

A hydrologist is NOT an

A hydrologist is NOT an engineer, although I would say that that degree might qualify Bruce to be in charge of at least the stormwater part of the engineering department.

Engineer is a professional term, like lawyer. Engineers guard it zealously and woe be to anybody calling themselves one without the proper credentials.

I'm familiar with all this because the spouse is a water quality engineer, with a P.E. (that's professional engineer citation) in civil engineering.

cubedoctor's picture

hydrologist

I thought a hydrologist was someone who washed hair at a beauty parlor. :)

Bbeanster's picture

Who is Shannon Szisto? No

Who is Shannon Szisto?

No wonder they took you off reporting facts and put you in the opinion section.

So you were wrong, he is a hydrologic engineer?

In order:
A: You
B: Incorrect
C: Nope

jmcnair's picture

misdirection

Re: A: I suspect it's a quibble over Szisto/Szito.

Stan G's picture

By pure coincidence, I

By pure coincidence, I visited Bigfoot Park the day before the auction. A friend had asked about it on Facebook and I was hoping to find a nice hiking trail. There was no sign at the entrance to the park. I drove by thinking that it might be private property. When I reached the green waste facility, I turned around and returned to the gravel parking area. On the back side, I found the gate with a standard Knox County No ... Allowed sign.

The trails up the ridge were basically washed out dirt roads. If there was a three mile trail at one time, it has long since become overgrown. I started down several possible trails, but never found a maintained trail. What I did fine was a network of short trails that have been turned into crude BMX trails with ramps,jumps, humps, and bumps. There was one constructed bank with a pool behind it where the dirt had been removed to construct the bank. It was deep enough that a person could drown it if they when over the bank and flipped.

In summary, not being a attorney, it appeared to be more of a liability than an asset, since it appeared to be unattended the riders would not have to sign any sort of release. There appeared to be a high risk of serious injury.

Since the county has no plans to develop it and since it is unlikely that a mountain bike group would construct and maintain a trail, it is basically undeveloped and probably undevelopmental land. As for access to Melton Hill Lake, there is an active railroad track along the lake which, I suspect, prevents direct access.

rikki's picture

Stan, perhaps you can help

Stan, perhaps you can help with a full analysis of whether it's better for the county to liquidate this property, as opposed to repairing the lease so it operates to the county's benefit.

It seems that NRRT had been operating on business model that depended on the county to subsidize operations, yet with the prospect of losing the subsidy and replacing it with a property tax obligation, they were willing to spend quite a bit more than the assessed value for the land. To me that implies considerable profit potential, to the point that they never needed the subsidies to begin with.

In other words, the biggest liability here was the lease agreement negotiated by Ragsdale. It's possible that $2M plus ongoing property tax collections is a good deal versus keeping the land and seeking a worthwhile operating agreement, but I want to see convincing numbers.

Stan G's picture

Rikki, I haven't logged on in

Rikki, I haven't logged on in several days and didn't see your comment. I haven't read the minutes, but I have to assume that county commission approved the sale of the land and Monday will approve the bid that was offered. Given the bid exceeds the appraised value and is more that double the expected sales amount, I suspect that county commission will turn a deaf ear to any reasoned analysis. I look forward to Troyer's comments.

In the meantime, I need to get my head together on another issue I plan to discuss Monday.

rikki's picture

sale of the facility

Stan, sale of the facility has been discussed a fair amount, but it went from a decision to be made to a done deal with a curious transition.

In April, Commission passed a resolution "determining
the method of disposal of the Solway Greenwaste property which includes 50.86 acres located at 8706 Joe Daniels Road, 106.49 acres located at 8707 Joe Daniels Road, and 2.51 acres located at 0 W. Emory Road, for a total of 159.86 acres, to be by public auction." This was understood to be merely how the sale would be conducted, not a decision to sell, as you can see by the resolution they considered and passed in May.

Commission considered a resolution "requesting the Metropolitan Planning Commission (MPC) to review for the possible rezoning of property located at 8706 Joe Daniels Road, 8707 Joe Daniels Road and 0 West Emory Road for the purpose of determining the highest and best use of the land prior to sale by Knox County" and asking Purchasing and Engineering to review the potential sale and report at the June meeting. They decided not to bother with an MPC review or the rezoning and just hear from purchasing and engineering. Notice the phrase "prior to sale."

In June, Commission considered a resolution "to enter into a short-term contract of no less than thirty (30) days or no more than sixty (60) days with Natural Resources Recovery of Tennessee, LLC, for the operation of the Solway Greenwaste Facility and the Forks of the River Convenience Center until the sale and transfer of the Solway Greenwaste Facility to a new owner are completed." Meanwhile, the auction had been scheduled, though no contract to conduct an auction was approved.

So the progression was "when we sell it will be by auction" to "let's decide in June after we hear from purchasing and engineering if we should sell" to "oh no, their contract is expiring and we already scheduled the auction!"

The sale itself only appeared on the agenda this month, with less than two weeks notice. I don't know what public notices are required for the sale of land or the sale of a park; perhaps they've been satisfied. I do know discussion of the subject has revolved around selling the mulch yard, with no mention of the surrounding park.

The sale at best snuck in sideways. Maybe it satisfied notice requirements and legislative protocol, but if this is a proper sale, it took a pretty rough ride over the spirit of the law.

bizgrrl's picture

It just came to my mind.

It just came to my mind. Burchett sounds like a Blount County mayor. Except that I'm not sure a Blount County mayor would get away with selling a park.

rikki's picture

Let's review here: Burchett

Let's review here:

  • Burchett promises the Carter community a new school while campaigning for a job that does not include authorization of school construction among its duties.
  • Burchett asks the School Board to postpone their renovation plans so he can demonstrate that competitive bids from a hungry development market will yield tremendous savings and value.
  • Competitive bids from a hungry development market yield diddly and confirm that the School Board and PBA knew what they were doing.
  • Burchett hatches a plan to create a slush fund he can control and starts auctioning off county property without securing approval from either the School Board nor County Commission, the entities empowered to control school construction and county expenditures.

Is $2M a good price for the Solway property? Does Knox Co recoup its investment at that price? Did Knox Co explore whether a reasonable operating agreement could be negotiated? Or is Burchett just looking for money he can use to do something that's not his job to do?

rht's picture

"we don't need any more parks"

at citizen forum last night he said knox county has enough parks. Parks = property not on tax rolls. He cited a statistic that govt land (fed, state, + local) makes up 60% of ... some part of knox, i didn't quite catch which part he was talking about but i would like to check on that statistic.

at least he didn't say Parks = creeping socialism govt ownership of everything

Shannon S's picture

enough parks

Knox County has enough parks, and then some.

(link...)

rikki's picture

Knox County has enough parks,

Knox County has enough parks, and then some.

That does not justify the Mayor unilaterally deciding to sell them off to finance a project that's outside his authority. Nor does it justify conducting an auction prior to getting Commission to approve the sale. Nor does it justify announcing that you're going to sell a mulching facility, then selling both a mulching facility and an adjacent park.

metulj's picture

Seems like that might be

Seems like that might be illegal. Who wants to check?

R. Neal's picture

I was thinking the same

I was thinking the same thing. Don't have time right now to check.

cubedoctor's picture

troublemaker

Troublemaker….

It will get even better when NRR explains to the county that Knox County owes NRR money and they are not going to pay the full $2,000,000.

A solution would be for NRR to pay what they bid….and then dedicate the park area back to the county. NRR night even get a tax break from the state on the deal. Probably won’t happen though, as it is hard for some people to do the right thing.

bizgrrl's picture

Yeah, I think this statement

Yeah, I think this statement would be good to verify. Is he including all the government land used for offices, etc. that provides jobs? If he wants to get rid of something, he should get rid of that big monstrosity called the City-County Building and put everyone in trailers on a no longer used garbage dump. Just kidding:) The City would probably interfere with that idea.

bizgrrl's picture

Besides, he is the manager of

Besides, he is the manager of Knox County, not the federal and city landholdings. Thus, it's none of his business how much land those two entities own in the area.

metulj's picture

Remember, Knox County

Remember, Knox County receives no money from the Federal and State governments. Not penny. This guy is a joke.

djuggler's picture

knox county has enough

knox county has enough parks

Funny. When they were converting the Dean Hill golf course into the Dean Hill shopping center I found a study that said Knoxville is well below the national average for parks. Wish I could find that study again. Of course, that was then.

I've also read that parks help attract a different income bracket to a city. If you want the salaries associated with creative type jobs (like software development) then you need the elements, like parks, that attract those persons. A lack of recreational parks and an abundance of business parks attract factory/assembly type jobs. And not to slight one type of job over another, but each of these directions produces a very different city.

rikki's picture

conservation conversation

If there had ever been any deliberations about selling Bigfoot Park, that sort of data would have probably been discussed. Since the whole thing was transacted in the shadows of the mulch yard sale, neither Commission nor the community got to talk about how much park land we might want nor whether the forested parcel should have been sold.

knoxvegas99's picture

Selling off the assets

This is snipped from numbered page "8" in the 2010 Consolidated Annual Financial Report for Knox County. Concerning net assets:

"By far the largest portion of the Knox County Government’s net assets reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment), less any outstanding related debt used to acquire those assets. The Knox County Government uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the Knox County Government’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities." (italics added)

There's probably some GASB way around this, but I'd submit that in the tangle of bonds and short-term notes issued over the years it may be difficult to say in some cases whether an asset considered for sale has "related debt" attached.

Just saying, and I'm not a fund accountant.

LVG

Stan G's picture

Rikki, I appreciate the

Rikki, I appreciate the history. LVG, as you suggest, it is doubtful that there is any "related debt" associated with this property. Again, having visited the "park" it appears to me the county purchased the property and having no particular use for it, called in a park with no intent to develop it as a park. Since the proceeds are being deposited to the general fund, there appears to be no legal obligation to reserve them for any specific purpose. LVG, what is the current status of the Halls Community Park expansion?

rikki's picture

further news

Today County Commission will vote to rezone 13 acres of this site (9 with road frontage, 4 near the mulch yard) from agricultural/public park to rural commercial. The application is on the agenda under the name of the attorney handling the rezoning, not the owner of the property, Nature's Best Organics. Normally that is not done, and it is questionable whether a public notice that misstates the property owner is a valid notice.

This move further emphasizes that the auction of this property was rushed and improperly done. Because the county is exempt from zoning, the land remained in an agricultural zone when the greenwaste facility was built and operated. Nature's Best has been violating zoning laws since they purchased the land by running a commercial operation on ag land. That would have been true of whoever purchased the property, and the county should have updated the zoning prior to auctioning the land. Of course, they auctioned it off before Commission even voted to sell it, so a proper sale was never a priority.

This rezoning partially corrects the discrepancy between use and zoning, but since it does not cover all the acreage in use, the owner's motive is more likely to set the stage for constructing a retail facility for selling mulch, etc. along the road frontage and a packaging facility adjacent to the mulch pad.

Mike Cohen's picture

Resort

Rikki...you are wrong. The MPC use on review that the county obtained transferred with the property. There has been no violation. The reasoning simply allows us to sell some additional items, such as stone. The county didn't want to sell those and compete with the private sector....but we now are the private sector.

That's the purpose.

metulj's picture

Did a county park sell

Did a county park sell somewhere in the middle of this?

rikki's picture

I'm just paraphrasing

I'm just paraphrasing comments on the application written by MPC staff: "Knox County sold this property to a private operator for continued operation of the greenwaste facility for profit, requiring the need ror [sic] this plan amendment and zoning change. Knox County was not required to seek commercial zoning for its previous operation of the facility."

"The current plan does not acknowledge that the property has been used for a number of years as a greenwaste collection and processing facility, which could be considered a commercial use."

I see nothing in the application about use-on-review, which I believe is a feature of planned zones, not the agricultural zone.

Rachel's picture

I see nothing in the

I see nothing in the application about use-on-review, which I believe is a feature of planned zones, not the agricultural zone.

Don't know the details of this site, but I can speak to this statement.

Use on review is definitely a feature of planned zones. UOR is required for a planned zone, and is basically a development plan review.

However, in additon, many, if not most, zones have a list of uses by right and also a list of uses permitted by review.

Mike Cohen's picture

Follow up

The rezoning was for 2 of the 4 parcels, not all the property.

It allows us to sell some additional landscaping products. Under AG we could only sell materials we produced.

The county had not wanted to make this change because it didn't want to compete with the private sector. We are the private sector.

rikki's picture

Finding the real Bigfoot mystery

Reviving this thread seems like an appropriate way to celebrate Bigfoot Day. Mayor Burchett has maximized cheese time in front of cameras and reporters since an Animal Planet crew decided to film an episode of "Finding Bigfoot" here, yet there has been no mention of Burchett's own Bigfoot mystery.

Was it legal to sell the 130 acres Knox County called Bigfoot Park along with the Solway mulch yard? Was the sale conducted within the checks and balances that keep government honest? Was adequate public notice given prior to the sale?

Did Tim Burchett really sell Bigfoot Park or are we all imagining it? Commission did not approve the sale until after it had been made. Only selling the mulch yard had been discussed. 130 acres of forested river bluff were sold without a peep, before the officials who could have alerted County Commission that they were selling more than just the mulch yard could testify.

If a citizen sued the county for operating outside its authority in transacting the sale of Bigfoot Park, he or she would have a strong case. Slowing things down frame by frame makes it clear Bigfoot Park was not properly sold.

rht's picture

good point!

big irony as to bigfoot

rikki's picture

no sale

I wonder what the statute of limitations is on violations of public notice laws. Is there a statute of limitations on violating inherent governmental checks and balances?

If such legal challenges remain a possibility, NRRT's best hedge against having the auction challenged might be selling the 130 acres to a land conservancy or obtaining an easement by placing the land into long-term ecological management that uses selective harvesting to create mixed-age, mature forest.

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