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Home My WebLink AboutVII (C) Old Winter Garden Road Widening Project: Proposed Settlement with Frank Casserino Agenda 2-06-2001 Item VII C FOLEY & LARDNER ATTORNILYS AT LAW CHICAGO POST OFFICE BOX 2I93 SACRAMENTO DENVER ORLANDO, FLORIDA 32802-2193 SAN DIEGO JACKSONVILLE III NORTH ORANGE AVENUE. SURE 1800 SAN FRANCISCO LOS ANGELES ORLANDO. FLORIDA 32801-2386 TALLAHASSEE MADISON TELEPHONE. 1407) 423-7658 TAMPA MILWAUKEE FACSIMILE. (407)648-1743 WASHINGTON. D.C. ORLANDO WEST PALM BEACH WRITER'S DIRECT LINE (407) 423-7656 EMAIL ADDRESS CLIENT/MATTER NUMBER Mdoty(&foleylaw.com 020377/0547 MEMORANDUM TO: The Honorable Mayor and City Commissioners of the City of Ocoee FROM: Mary A. Doty, Esq., Assistant City Attorney THROUGH: Paul E. Rosenthal, Esq., City Attorney DATE: January 23, 2001 RE: Old Winter Garden Road Widening Project: Proposed Settlement with Frank Casserino (Parcel 101) As part of the Old Winter Garden Road Widening Project, the City acquired Parcel 101 on January 8, 2001, pursuant to an Order of Taking entered by the Circuit Court. Parcel 101 is a ±30,768 square foot parcel that was formerly owned by Frank Casserino. Parcel 101 is located on the north side of Professional Parkway just west of its current intersection with Old Winter Garden Road. Parcel 102, acquired at the same time, is the property that lies on the northeast corner of Old Winter Garden Road and Professional Parkway just east of the subject property. Parcel 101 is needed for the realignment and improvement of the Old Winter Garden Road/Professional Parkway intersection. Parcel 101 is improved with a ±3,768 square foot modular metal building on a concrete slab and containing a ±377 square foot office. The eastern portion of the property is improved with a 2 story concrete block/frame duplex containing ±1,890 square feet. All of the property is zoned C-3 and has a future land use designation of commercial. The City first had Parcel 101 appraised by Walter Carpenter on March 12, 1999. Mr. Carpenter appraised the land at $200,000.00 and the improvements at $50,500.00, 066267067.1 SLis eo> th:\ for a total of$250,500.00. Because the property owner failed to respond to our request to inspect the improvements, this appraisal was subject to an interior inspection. On May 13, 1999, City Staff made an offer to purchase Parcel 101 to Mr. Casserino for the sum of $250,500.00, subject to City Commission approval. In response to the City's offer, Mr. Casserino counteroffered for $425,000.00 and offered the appraiser access to make an interior inspection. After this inspection, Walter Carpenter raised his valuation of the improvements to $85,650.00. The City Staff then, on October 18, 1999, offered to purchase Mr. Casserino's property, subject to City Commission approval, for $285,650.00. The City heard no response from Mr. Casserino until April 18, 2000, when we received a letter from Attorney Kurt Ardaman, representing Mr. Casserino, demanding $475,000.00 for his property. This offer was not supported by any appraisal. Because of the disparity in the valuations attached to the Casserino property, City Staff recommended that the City proceed with condemnation. In preparation for filing an eminent domain petition, Staff asked Walter Carpenter to update his value. In a report with a valuation date of July 2000, Mr. Carpenter arrived at a value of$300,000.00, $225,000.00 for land and $75,000.00 for improvements. Mr. Carpenter valued the raw land at $7.25 per square foot. Mr. Carpenter's $300,000.00 valuation is a reconciliation of all three of the generally accepted methods of valuation. Using these approaches, Mr. Carpenter arrived at the following values: Cost approach $ 305,500.00 Sales Comparison Approach $ 287,500.00 Income Approach $ 297,500.00 Reconciliation $ 300,000.00 Prior to the actual filing of the eminent domain petition, City Staff made another offer to Mr. Casserino, this time in the amount of$300,000.00. In response to this offer, the City received correspondence from Attorney Ardaman, indicating that Mr. Casserino was willing to reduce his demand to $450,000.00. Again, this offer was not supported by an appraisal. As mentioned above, the City acquired title to Parcel 101 on January 8, 2001 with a deposit of$300,000.00. Mr. Casserino has now provided Staff with an appraisal prepared on his behalf by Calhoun, Dreggors & Associates. Mr. Dreggors concludes to a value of $355,000.00 based on a reconciliation of the values set forth below: Cost Approach N/A Sales Comparison Approach $ 369,500.00 Income Approach $ 351,600.00 Reconciliation $ 355,000.00 006.207067.1 -2- I have reviewed the appraisal reports prepared by Mr. Carpenter and Mr. Dreggors. In my opinion both reports appear to be within the range of reason and are free from any obvious errors that would have a material impact on value. A jury, presented with these two opinions of value, would be free to arrive at any value between $300,000.00 and $355,000.00. Copies of both reports are available in the City Clerk's office for review. We have now been approached by Mr. Casserino with a settlement offer of $353,000.00 for Parcel 101. This settlement offer also includes a provision for payment of Mr. Casserino's appraisal fees in the amount of$7,318.00. Also, pursuant to Florida Statutes, the City of Ocoee is obligated to pay Mr. Casserino's attorney, Kurt Ardaman, 33% of the difference between the last written offer before Mr. Ardaman was hired and the ultimate settlement or jury valuation. Settlement of this matter in the amount of$353,000.00 results in an attorneys' fee payment to Mr. Ardaman in the amount of$22,225.50. Mr. Ardaman, however, has agreed to accept the amount of$15,600.00 as his attorneys' fee in this matter. Mr. Casserino's proposed settlement offer is $53,000.00 more than the City's appraisal, an increase of 18%. It is, however, only $2,000.00 below Mr. Casserino's appraised value of$355,000.00. Although this settlement proposal is not particularly advantageous to the City, it is my opinion that continuing to litigate the matter in the hopes of obtaining a settlement or a verdict more favorable to the City of Ocoee would not be cost effective. Not only does the City of Ocoee have to pay the reasonable expenses of the property owner's experts if the matter were to go to trial, the City would incur experts' fees and attorneys' fees of its own. There is no guarantee that the City would achieve a better result than the $353,000.00 offered by Mr. Casserino. There is also the chance that Mr. Casserino, especially in light of the previous settlement demands made upon the City, would seek to put on appraisal testimony much higher than that of Mr. Dreggors, if the matter were to proceed to trial. Payment of Mr. Casserino's settlement demand results in a total payment of $375,918.00, which is $63,864.50 more than the City would pay if the case were settled today for $300,000.00. I remind the City Commissioners, however, that the cost of this acquisition is governed by the Interlocal Agreement between the City of Ocoee and Orange County and that Orange County is obligated to pay 46% of the acquisition costs for property in this area of Old Winter Garden Road. RECOMMENDATION: It is respectfully recommended that the Mayor and City Commissioners approve the settlement of the eminent domain litigation for Parcel 101, formerly owned by Frank Casserino, by payment of the following amount: 006207067.1 -3- $353,000.00 to Frank Casserino (less the $300,000.00 previously deposited in the court registry) $ 15,600.00 to Kurt Ardaman, Esquire $ 7,318.00 to Calhoun, Dreggors and Associates, Inc., subject to review and approval by the City Attorney and authorizing the City Attorney or Assistant City Attorney to execute a final judgment for these amounts cc: Jim Gleason, Acting City Manager lames W. Shira, PE, City Engineer 006.207067.1 -4-