HomeMy WebLinkAboutAgenda - 01-24-2005-5mORANGE COUNTY
BOARD OF COUNTY COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: January 24, 2005
Action Agenda
Item No.
SUBJECT: Approval of County's Cooperation in 1031 Tax Free Exchange of Real
Property; Acknowledge the Donation of Two Acres of Land to Orange County
DEPARTMENT: Environment and Resource
Conservation
PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
INFORMATION CONTACT:
Geoffrey Gledhill, 732-2591
David Stancil, 245-2590
Rich Shaw, 245-2590
TELEPHONE NUMBERS:
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 336-227-2031
PURPOSE: To authorize Orange County's cooperation with the seller of the future Millhouse
Road park property in a 1031 tax free exchange and to acknowledge a donation of two acres
of land to Orange County.
BACKGROUND: On November 3, 2004, the Board approved the County's purchase of 67
acres on Millhouse Road from Ms. Julia Blackwood for a future Orange County park.
The County's purchase was finalized on December 30, 2004. Current plans are to "land
bank" this property until future funds are identified for park planning and development.
Just prior to closing on the property, the seller decided to pursue a 1031 tax free exchange,
which is a procedure allowed by the IRS to reduce the seller's income tax. Similar actions
were taken by two other recent sellers of land to Orange County. In those cases, however,
the purchase contract between the sellers and the County included language that authorized
the County to cooperate with the sellers to effectuate a 1031 tax free exchange. In this case,
the contract between Ms. Blackwood and the County did not anticipate such an arrangement.
Ms. Blackwood would also like the County to acknowledge that the County acquired an
additional two acres of land that was not included in the purchase contract. The contracted
transaction excluded a 2-acre strip of land subject to an existing 60-foot access easement to
adjacent property because Orange County did not want to pay the appraised per acre price
for that property. Ms. Blackwood, however, decided to make a gift of this two-acre strip of
land to the County. Ms. Blackwood will pursue a charitable contribution income tax
deduction for the value of those two acres of land.
FINANCIAL IMPACT: There is no financial impact to Orange County. The seller (Ms.
Blackwood) will pay any and all costs and expenses associated with these actions, including
any incurred by the County in its cooperation.
RECOMMENDATION(S): The Manager recommends that the Board:
authorize County cooperation in the seller's pursuit of 1031 tax free exchange and the
execution, by ERCD staff, of related documents necessary to accomplish the 1031
exchange; and
authorize the County attorney to acknowledge that Orange County received a gift of
two acres of land from Julia Blackwood when it purchased the adjoining 67 acres of
land from her on December 30, 2004.