DMR spent $3 million on land in Pass Christian that may become dog park

mmnewsom@sunherald.comJanuary 19, 2013 

A waterfront Pass Christian parcel the Mississippi Department of Marine Resources used a $3 million federal grant to buy is likely to become a dog park the city would have to maintain.

The land purchase, though, which was for far more than the county appraised the property for, is part of the investigations into spending by the DMR.

Mayor Chipper McDermott, who wasn't involved in the land purchase, often fields questions about the planned dog park at the corner of Henderson Avenue and U.S. 90, as many want it to be built. He has nothing against parks in general, but before Hurricane Katrina, the site was a commercial area -- home to a Winn-Dixie store, a marine supply, chain pharmacy and others. He said the site had brought the city sales tax revenue before Katrina wiped the businesses out.

Off the city's tax rolls

"My problem is $12,000 a year is no longer on the tax roll," McDermott said.

McDermott said he found out about the transaction after the DMR bought the land from a private owner. Now, there's the prospect of the dog park, which is still being discussed, and the city was approached about entering into an agreement with the DMR that would have the city cut the grass and maintain the property.

But McDermott said no decisions on the agreement has been made, and a company is using a road across the property while it works on an infrastructure project nearby. Once it's finished with the work, the property could become a park.

Pass Christian struggled for years after Katrina to regain its tax base. Sales tax revenue was scarce, but McDermott reports the city is now close to pre-Katrina levels. The sales tax revenue ran about $95,000 per month before the storm, and last month, the city got about $89,000.

City leaders are trying to find more places for development, but those plans have been hampered because it has so many low-lying areas, which carry added expense because of post-Katrina federal elevation requirements for construction in flood zones. There's also the higher cost for insurance.

Saved from development?

When the DMR was approached about an interview on the project, the agency released project details, which lay out its perspective on the need for it. The DMR touts the project as a chance to buy property in a flood zone to be used for conservation efforts and public use.

"The commercial grocery and retail center on this site prior to August 2005 were completely demolished by Hurricane Katrina," the project narrative says. "This parcel is at high risk of future flooding. With input from the City of Pass Christian, DMR will manage this property as wetlands and riparian buffer to provide habitat for fisheries and wildlife, flood storage and erosion control, groundwater recharge, water quality protection and a public green space for passive recreation."

According to the DMR, the land, which at the time of purchase was zoned for 150 housing units, conforms to the Coastal Impact Assistance Program's "authorized use 1" projects and activities for "conservation, protection, or restoration of coastal areas, including wetland, because it will utilize funds for the acquisition of a privately held coastal waterfront property for protection and preservation from hotel, condominium, casino and other development."

Pass deal, others probed

The preliminary audit report from the U.S. Interior Department Office of Inspector General questions about $12.6 million in what it says are "unsupported costs" involving several property purchases the DMR made through the CIAP program. It says there were federal standards not met by CIAP land appraisals for the Pass Christian property and several others.

The landowner who made the deal with the DMR for the property couldn't be reached for comment, but the audit says the nearly 7 acres were appraised about $5.25 million. A $3 million grant was used to buy the land. The DMR notes it paid well below the appraisal. But the price was still five times higher than the county tax roll appraisal of $595,000.

"This parcel is especially important to the DMR CIAP plan because the property owner has agreed to sell the property for (about) $2.5 million less than the appraised value," the DMR said in the project outline. "This acquisition represents a rare opportunity to purchase a sizable piece of waterfront property to be managed for conservation and public use."

Analysis questionable

Regarding the Pass Christian property, the audit report notes a large disparity between the tax assessment and the DMR appraisal and a questionable analysis of the "highest and best use." It says there were improper and extraordinary assumptions and what Office of Inspector General says is inadequate investigation and consideration of sales history. It also says there were unexplained zoning differences between the appraised property and comparable sales, as well as a reliance on the seller's appraisal. The audit report is only the preliminary finding, and the final report hasn't been issued yet.

As for whether the property was a worthwhile expense of DMR's taxpayer money, McDermott said he's got no comment on that.

"I'm too small to be involved in that," he said. "I wasn't involved in the decision making, but I do know it's $12,000 a year no longer on the tax rolls."

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