By Emily Ford
eford@salisburypost.com
KANNAPOLISóA homeowner says he will fight “tooth and nail” against plans to seize his property for a new health department.
Mike Kennedy has refused to sell his rental house at 313 S. Juniper St. to the Cabarrus Health Alliance, which wants to build a state-of-the-art public health department across from the N.C. Research Campus.
“I think it’s a bunch of bull,” said Kennedy, who had been renting out the house but will move into it himself next month. “They’re going all about business the wrong way, threatening to take things from someone.”
If Kennedy doesn’t sell, the Health Alliance plans to use the power of eminent domain to seize the property.
A hospital authority that acts as the public health agency in Cabarrus County, the Health Alliance can seize private property for public use, much like the removal of a home to construct a highway.
Health Alliance leaders say they need the city block at the corner of Highway 3 and Loop Road for a new building. The block includes four homes, Sherwin-Williams Paint, a career center for Rowan-Cabarrus Community College and a vacant bank.
The Health Alliance would rather avoid using eminent domain, a process that “leaves a bad taste in everyone’s mouth,” director Dr. William F. Pilkington said.
So the agency has tried to buy the properties voluntarily using a third-party real estate agent.
Two homeowners on the block have already sold. They received more than tax value for their property.
“It was a very good deal for them,” Pilkington said. “It was a good deal for both parties.”
According to tax records, the Health Alliance paid $115,000 for the house and land at 600 W. D St., which had a tax value of $75,560.
The agency paid $123,000 for the property at 340 Mooresville Road, valued at $82,680.
The Health Alliance then gave the homes back to the previous owners, who paid to have them moved, Pilkington said.
But Kennedy said land near the Research Campus is worth more than that.
Kennedy recently listed his house for sale at $399,000 to make a point.
The Health Alliance “is trying to get prime real estate for a giveaway price,” he said.
The agency can afford to pay more than $100,000 offered to him by the third-party agent, Kennedy said. The Health Alliance will receive about $15 million for a new building from publicly financed bonds tied to the Research Campus.
Kennedy’s refusal to sell comes with some risk. If the Health Alliance eventually seizes the property, Kennedy would receive only the tax value of $86,260.
Very few people have successfully challenged eminent domain in court, Pilkington said.
Kennedy said he won’t back down or sell unless the Health Alliance offers what he considers a fair price.
“My house is for sale,” he said. “Come buy it, don’t snatch it away for tax value.”
Kennedy is not alone in his refusal to sell. David Murdock also has declined.
Murdock, the billionaire founder of the Research Campus, owns the fourth home on the block, as well as the building that holds Sherwin-Williams Paints and the RCCC career center. He also owns the vacant bank.
Murdock won’t sell his property for tax value because his companies would rather get market value, which is higher, Pilkington said.
But unlike Kennedy, Murdock’s top executive in North Carolina, Lynne Scott Safrit, has said her boss will not fight eminent domain.
Safrit has been a vocal supporter of the Health Alliance, and Murdock recently made a large donation to the agency to fund a new division solely devoted to working with the Research Campus.
Tax values on property surrounding the $1.5 billion biotechnology hub have skyrocketed.
Murdock’s commercial property on the block the Health Alliance wants had a tax value of $600,000. It jumped to $2.2 million after Cabarrus County’s 2008 revaluation.
Across the street, the tax value of the Southern Select Credit Union went from $916,310 to $2.3 million.
“In 2003 when the Cannon plant shut down, the economic future for that area was shot,” said Chris Ferriss, Cabarrus County revaluation manager.
Then in 2004, Murdock bought back the abandoned textile mill that he had owned in the 1980s. The use changed from industrial to commercial, which is much more valuable, Ferriss said.
“Once he announced his plans up there, the market totally changed,” Ferriss said. “People all over the world were calling and investing in property, trying to get a jumpstart.”
Often, outsiders asked why property values were so low, especially on the mill houses, Ferriss said.
Since then, residential tax values have increased as well.
Murdock’s residential property on the block the Health Alliance wants went from $78,420 to $99,020. The tax value on Kennedy’s home and land nearly doubled from $43,210 to $86,260.
Kennedy said that’s still too low and asked the county assessor’s office to increase the value. He was told to obtain a private appraisal, which he said he can’t afford.
Many private appraisers won’t take the job anyway since they know the Health Alliance plans to seize the property, Kennedy said. They don’t want to end up sitting in court, waiting to testify, he said.
Kennedy bought the one-bedroom house at auction for $86,000 in July 2007 as an investment.
His purchase price actually helped set the new tax value that he disagrees with, Ferriss said. The county used 2007 sale prices to determine 2008 values.
“He set the market because he bought it for $86,000,” Ferriss said.
Kennedy, who owns and operates an electronics recycling business in Kannapolis, said he has fallen on hard times. Business is bad, and he recently lost his home in a divorce.
He will move into the rental house on Juniper Street because “it’s the only place I can afford to stay right now,” he said.
The Health Alliance has not served notice of eminent domain on his property yet. The agency might not need his property, which will become a parking lot, for a year or two, Pilkington said.
The Health Alliance has not made an offer to buy Kennedy’s home, Pilkington said. The agency sent the third-party real estate agent to gauge Kennedy’s interest in selling, he said.
Kennedy said he’s holding out and will hire an attorney to fight eminent domain if necessary.
Looking at the tax card, revaluation manager Ferriss said Kennedy stands to make $15,000 on a house he bought last year if he sells it for $100,000.
“In this economy?” Ferriss said. “That’s more than generous.”
But anyone with property around the Research Campus should expect more, Kennedy said.
“You would have to be a moron to sell your property even for that price,” he said.
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