What a Difference a Decade Makes

click to enlarge UPSCALE SLUM? The appraised value of the - land now home to International Plaza dropped from - $56.6-million to $2.9-million in a span of 10 years. - Sean Deren
Sean Deren
UPSCALE SLUM? The appraised value of the land now home to International Plaza dropped from $56.6-million to $2.9-million in a span of 10 years.

Who put the radioactive waste dump in the middle of the West Shore business district between 1986 and 1996 and didn't tell anybody? How else to explain a $53.6-million drop in property value.

That is the huge discrepancy between two real estate appraisals of the same 155 acres, conducted 10 years apart. The land, owned by the agency that operates Tampa International Airport, is now home to the upscale International Plaza shopping mall.

The Hillsborough County Aviation Authority leased the property to Dick Corbett in 1979, and the politically connected Tampa businessman took nearly 20 years to find developers who would build the mall and an office complex on the public land.

Evidence continues to mount that the aviation authority betrayed taxpayers by giving Corbett an airport land deal of mind-boggling perfidy. Corbett's International Plaza lease, considered a sweetheart deal by federal auditors and others, will cost taxpayers $500-million before expiring about 80 years from now, according to one estimate. That's because, critics say, Corbett's lease payments are ridiculously low. Taxpayers and airport users will have to make up the money that Corbett should have been paying the aviation authority. The Corbett lease, dissected over the past two years by the St. Petersburg Times, The Tampa Tribune and Weekly Planet, has been under such editorial assault that in 2001 airport officials won face-saving rent concessions from a Corbett partnership. But the higher rent that Tampa Westshore Associates Ltd. agreed to pay isn't due for another 15 years.

In past years, Corbett has employed developer Richard A. Beard III and land-use lawyer David M. Mechanik, both prolific political fundraisers in Tampa, to make his case to airport officials.

But the primary tool that Corbett used to get a 1996 rent decrease from the authority was an appraisal of the future mall site by the late C.L. "Charlie" Knight. The Tampa appraiser, who died in 1998, valued the land at $18,871 an acre. Within days of the airport appraisal during the winter of 1996, Knight valued another piece of public land in the area at $433,358 an acre.

Airport officials have clung to the Knight appraisal as they fend off criticism that they gave away the mall site to Corbett. They rely on the appraisal despite the fact that Corbett paid Knight for it. The aviation authority usually forbids tenants from hiring their own appraisers because the numbers get cooked.

An appraisal of the same land, which Corbett requested in 1986 while refinancing a mortgage on the property, does nothing to dispel the impression that Knight's 1996 work was influenced by who paid for it.

Corbett, who didn't return a telephone call seeking his comment, almost certainly knew of the earlier appraisal. That raises the possibility that he misled Tampa Mayor Dick Greco, Hillsborough Commissioner Chris Hart III and other aviation authority members about the land's true value in 1996.

With their approval, Corbett's annual rent dipped from $800,000 to $200,000 after the 1996 appraisal was presented to authority members. Using the 1986 appraisal figure with Knight's suggested 7.5 percent rate of return, Corbett's 1996 rent should have been $4.2-million.

The Planet obtained the 1986 appraisal from U.S. bank regulators under the federal Freedom of Information Act.

The appraisal normally wouldn't see the light of day. But Corbett defaulted on the $13.5-million mortgage loan in 1990 as his lender, St. Petersburg's Florida Federal Savings and Loan, was seized by regulators.

Along with other records of the Corbett refinancing, the appraisal wound up with the Federal Deposit Insurance Corp., which attempts to protect depositors when a bank or thrift fails.

The FDIC released the Corbett records to the Planet. The records confirm that taxpayers took a $10-million bath on Corbett's mortgage default.

In 1986, Corbett and his wife personally guaranteed repayment of the loan. By 1992, when Corbett settled a foreclosure lawsuit with regulators, he owed $15.4-million, including interest and penalties. Yet Corbett's in-laws, who bailed out him and his wife, paid the regulators just $5.4-million for the mortgage note.

The $10-million difference was made up by the FDIC's taxpayer-subsidized insurance fund.

But the larger discrepancy was in the 1986 appraisal requested by Corbett in order to induce Florida Fed to loan him the $13.5-million, secured by his airport land lease. That year, R/E Marketing Consultants Inc. of Tampa valued the airport land at $364,677 an acre. With the West Shore district booming a decade later, however, Knight couldn't find it worth more than the $18,871 an acre.

Knight's 1996 value for the whole plot was around $2.9-million while R/E Marketing's 1986 value was more than $56.5-million.

The Planet asked Tim Wilmath, director of valuation process for county Property Appraiser Rob Turner, to compare the Knight and R/E Marketing appraisals, and then try to explain the wide gap in values.

Placing himself in Knight's shoes in 1996, Wilmath said: "This was not an easy assignment." Few comparable West Shore tracts of that size had been sold in arm's-length transactions up to that time, said Wilmath.

Even considering that, Wilmath said he had trouble following Knight's rationale for the $2.9-million valuation.

"Every single (comparable property) sale he used, he adjusted down," Wilmath said of Knight, who did the same with the subject airport property.

Wilmath said Knight discounted both the comparable properties and the airport land because of various restrictions that the aviation authority placed on Corbett's development of the 155 acres.

In Wilmath's opinion, R/E Marketing appraised the airport land more accurately by examining strictly market value. Knight valued the landlord's interest in the property instead of the full market value.

"That's where Charlie went wrong," Wilmath said of Knight. "He missed it."

Louis E. Miller, the aviation authority director, wasn't around Tampa when either appraisal was conducted. Miller said he was thus reluctant to comment.

Miller did reiterate that his agency has induced the Corbett partnership to pay more rent in coming years. "It's not perfect," Miller said of the lease. "But if we get the opportunity again to improve it, we will."

The chasm between R/E Marketing's $56.5-million and Knight's $2.9-million is further proof that the airport was incredibly generous in negotiating terms with Corbett.

Using the approach most favorable to his client Corbett, Knight arrived at a figure — 43 cents a square foot — that Wilmath called "the extreme low end of the range in commercial property values around that West Shore area."

So where is that West Shore waste dump?

The 155 acres, with easy access to the airport and Interstate 275, was and remains one of the best commercial tracts in the entire Tampa Bay area. A neighboring parcel in private hands recently sold for $26 a square foot.

While taxpayers are losing on Corbett's lease, the airport tenant himself is presumably gaining.

The Planet has gone to court to attempt to force Corbett and the aviation authority to turn over a document that could detail how much Corbett is making off his bargain-rate lease. (See "What is the Big Secret?" in the Planet's April 12-18, 2001, edition at www.weeklyplanet.com/2001-04-12/cover.html.)

Corbett has made every attempt to the keep the document, called a lease-arrangement agreement, under wraps. Rather than disclose it to Turner's office, Corbett dropped his appeal of a county assessment of the airport land and agreed to pay real estate taxes that he initially protested were too high.

The Planet has challenged Hillsborough Circuit Judge Sam D. Pendino's July 2001 dismissal of the newspaper's public-records lawsuit, which seeks a copy of the lease-arrangement agreement. A three-judge panel was to hear the appeal later this month. But lawyers in the case are seeking a continuance until June, at the earliest.

Contact News Editor Francis X. Gilpin at 813-248-8888, ext. 130, or [email protected].

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