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Wide gaps in appraisals of Keystone property

Jacksonville Business Journal - by Tony Quesada Staff Writer

JACKSONVILLE -- The appraisals of property owned by Keystone Coal Co. that the Jacksonville Port Authority is seeking by eminent domain are as much as $42.7 million apart.

With a jury trial scheduled April 21 to determine what the authority must pay to take Keystone's 70 industrial waterfront acres, those appraisals and their authors' ability to defend them on the witness stand could be key in whether the authority is able to acquire land it considers vital to the port's future.

Executive Director Rick Ferrin has said the authority has considered leasing the property, if acquired, to a coal handling company. That could generate millions of dollars in rent and fees that could be used to pay the authority's share of the cost to deepen the shipping channel in the St. Johns River.

Keystone has been adamant about its desire to keep the property at the northern terminus of Talleyrand Avenue, saying it has long sought property in Northeast Florida to build a coal terminal.

Four recent appraisals were performed in preparation for the trial. Two were done for the port authority by Michael Roy of Lampe, Roy & Associates Inc. and Ronald Moody of Broom, Moody, Johnson & Grainger Inc., both Jacksonville companies. Moody appraised the property at $17 million, while Roy valued it at $19 million.

The appraisals for Keystone were done by Heyward Cantrell of Cantrell Real Estate Inc. in Jacksonville and by Woodward Hanson of Hanson Real Estate Advisors Inc. in Fort Myers. Cantrell's appraisal was $59.7 million, while Hanson's was $55 million.

One obvious difference between the two sets of appraisals is that Keystone's appraisers assign more than $10 million in value to a dormant lime kiln on the property that Keystone has said it wants to refurbish and operate. The authority's appraisers said the kiln adds no value to the property and appraised it as scrap for about $300,000.

The rest of the differences are cumulative, resulting from the appraisers' choices of prior property sales considered as comparables and the factors and weight given to them to relate those properties to Keystone's.

Keystone's appraisers found the property in question superior to the others with respect to things like expected development costs and accessibility. As a result, they made adjustments to increase the value of Keystone's land relative to the comparables.

"It's not unusual to have differences in opinion because there are differences in assumptions," said Rick Harris, an appraiser in Clearwater often hired by property owners in eminent domain cases and who has worked at times with the law firm representing Keystone. "It's really part art and part science."

The size of the disparity in opinions of the Keystone property's value is unusual, but not unprecedented, appraisers unconnected with the case said.

"Usually, the more complicated the taking, the wider the divergence," said Dave Hohman, an appraiser in Winter Haven who often works for condemning authorities.

Ultimately, the jury will have to sort through the differences.

"Once these appraisers get on the witness stand, the credibility of one will likely stand out for the jurors," said Reggie Carter, a Jacksonville-based appraiser. "That will determine the faith they place in how the appraisers arrived at their numbers."

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Revised: February 10, 2010 .

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