CRA advances two property purchases after heated debate over closing-cost caps and title issues

Daytona Beach’s Community Redevelopment Agency on Dec. 17 advanced two property acquisitions and spent a significant portion of the meeting debating closing-cost allowances and title encumbrances.

Item 6b asked the CRA to approve up to $210,000 (inclusive of closing costs) from Midtown CRA loan funds to buy 819 Doctor Mary McLeod Bethune Boulevard from Robert Rand. Commissioners repeatedly questioned the staff’s chosen "up to" closing-cost figure of $50,000, citing that figure as a large percentage of the purchase price. Redevelopment Director Ken Thomas and outside counsel Mary Ellen Austin North explained that the parcel’s title had multiple potential encumbrances and that staff set a conservative ‘‘up to’’ figure to cover unknowns.

Attorney Mary Ellen Austin North characterized the title work as extensive: "I’m actually the attorney who did the quiet title and the partition to turn it into the 32 of 23 owners that you have," she said, adding that she has a title commitment and a special magistrate order enabling a closing process. She told commissioners, "I think realistically, you could probably be under 10" (referring to thousands for closing costs) and suggested the 10–15 thousand range would likely be sufficient.

Commissioners proposed a series of amendments to lower the cap (from $50,000 to $25,000, then to $15,000 and $10,000). A proposed $15,000 amendment was not adopted due to procedural confusion; a later motion to limit closing costs to $10,000 (moved by Commissioner Perez, seconded by Commissioner May) failed on a 3–3 tie. After further motions, the commission adopted a motion moved by Commissioner May and seconded by Commissioner Perez (transcript text, "move that we go to 12") that passed by voice vote recorded in discussion as 5–1; the meeting transcript uses the shorthand "12" in the motion text and does not provide an expanded dollar value at that moment in the record.

Item 6c, a separate resolution to acquire 543 Oak Street from Batt Development LLC for up to $360,000 inclusive of closing costs, prompted similar concern about a proposed $55,000 closing-cost cap (about 18% of the listed purchase price). Commissioners discussed the parcel’s inclusion in the town-center footprint and the city’s practice of negotiating purchase price; staff said prices rise once development plans are public and that they do attempt to negotiate. A motion to reduce the Oak Street closing-cost allowance from $55,000 to $20,000 was moved and seconded and was taken to a vote; commissioners verbally recorded ayes and noes during the exchange and the amended figure was accepted for the purchase resolution according to the meeting transcript.

Commissioners urged staff to return with an explicit policy on the percentage the agency will allow for closing costs in future acquisitions so staff is not repeatedly presenting large open "up to" caps. Several commissioners also asked for an itemized backup showing a breakdown of closing-cost categories when future purchases are presented.

The CRA portion of the meeting ended with a request from Commissioner Perez to schedule a January workshop to set priorities and review the workshop materials; commissioners also discussed using remaining CRA borrowing capacity (approximately $2 million referenced in the meeting) for targeted beachside improvements such as underground utilities, enhanced trash pickup, lighting, and park maintenance.

Next steps: staff to provide itemized closing-cost backup on future acquisition items, to consider a standardized percentage policy for closing-cost allowances, and to circulate dates for a January CRA workshop.