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County sale of poor farm land stalls
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By CHUCK CLEMENT, Staff Reporter
| 04/16/2008 |
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The land auction held at the Lake County Courthouse ran aground Tuesday afternoon when the principal buyer of the property near Lake Madison learned that the asking price had doubled since his last meeting with the county commission.
Chuck Sutton, a local auctioneer working for the county, had opened the bidding for 9.93 acres between SD-19 and Lake Madison at $112,000, the average of three estimates performed to determine the land's value. The auction -- held in the commissioners' meeting room for about a dozen people -- soon closed when Sutton did not receive any bids for land that was previously declared as surplus.
Ted Thoms, a Sioux Falls developer, told the Lake County commissioners that he wasn't pleased by the asking price for the property. Thoms, the commissioners and their agents had discussed a sale price of $50,000 plus the payment of other expenses two weeks ago.
"I'm perplexed as to how it went from (50,000) to 100,000 dollars in two weeks," he said.
Thoms had requested a negotiated land auction when he met with the county commissioners on April 1. Last winter, Thoms contacted the commissioners expressing an interest in purchasing about 10 acres of surplus property that was once part of the county poor farm.
The surplus county land lies adjacent to property that Thoms wants to develop into Sunset Harbor, a residential neighborhood. Thoms' plans for the county land include a new access road to his other land holdings.
Both parties had discussed a price of $50,000 for the 10 acres and having the buyer pay for additional expenses, such as attorneys' fees, title insurance, auction and appraiser costs, engineering expenses, fencing and tenant compensation. The additional expenses were estimated at about $35,000.
As part of the auction process, the county assigned three individuals to appraise the land's value -- Commissioner Shirlee Leighton, local auctioneer Wayne Bessman and Rick Becker of the county Equalization Office.
During a public comment portion of the meeting, Bessman said that he had heard someone refer to the land as "junk property."
"All of a sudden it's worth a whole lot more and last week it was junk property," Bessman said.
Bessman noted that if the acreage was sold to Thoms, it would appear as taxable property on the county's tax rolls.
Leighton told the auction attendees that she had appraised the land's worth at $225,000. She had compared its value to the sale price of 1/2-acre lots each sold for $20,000 recently in the Lake Madison and Bayview Lane areas.
Becker told the group that he had appraised the property's worth at about $101,000 and subtracted his estimate of transaction expenses, which was $39,000. Becker's appraisal came to $62,000.
The third estimate, belonging to Bessman, was set at $50,000.
Dick Ericsson, Thoms' attorney, pointed out to the commissioners that no other potential buyers had attended the Tuesday auction, even though they were welcome to do so. Ericsson noted that the 10 acres was not lakefront property and it possessed significant easements that would require adjustments to any land development plans. He added that the land was currently unused.
According to Ericsson, Thoms was disappointed in the auction's outcome, but he added, "We will remain interested."
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©Madison Daily Leader 2009
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