Potential County Farm Land Resolution Stirs Emotions

Oskaloosa, Iowa – It appeared on Monday’s agenda for the Mahaska County Board of Supervisors as a resolution, but the discussion, since being tabled, has grown during the week.

“Consider Resolution Approving Transfer of County Farm”, was placed on the agenda by Mahaska County Supervisor Mike Vander Molen as he said, “That’s how the political process is suppose to work. You bring an item up for discussion and solicit some feedback and see what people think, and I’ve certainly heard from a lot of people.”

Vander Molen said the agenda item wasn’t placed on there for ultimate resolution, “I wanted to solicit feedback from Willy and Mark and determine what they thought also. Obviously, we haven’t discussed it before because that would violate open meetings laws, so it’s good to discuss these things in the open, in front of everybody.”

“The county owns a number of crop-row acres that sort of surround the farm. Originally when the farm was established, it was established so that people with mental disabilities could work out on the farm and see some benefit towards their efforts. But, things have really trended away from residential care facilities, so it’s not used as much. Nobody’s working the land out there”, said Vander Molen. “So that begs the question in regards to the crop land. Does the county need to be in the farming business? I don’t think it’s a primary function of government to own farm ground and lease it out on a cash basis. So, it’s an asset of the taxpayers. So I think, at some point, we need to divest ourselves of the crop portion of the county farm so to speak.”

“When I ran for supervisor, I wanted to do sort of an audit of everything the county owns, and see what we need and what we didn’t need, and I definitely think the farm ground we don’t need. That’s a taxpayer asset and we should liquidate it at some point. So, how do you liquidate it? You could just put it up for sale, but there’s also been the airport, or the issue with the airport, and once the airport board goes through the process of land acquisition, the farmers there will be subject to a lot of capital gains taxes. So, I thought you could do an exchange of land, where the county gets reimbursed for what they give in the exchange”, says Vander Molen. “There would be an exchange of land between the farmer and the airport agency, and so the farmer would get land in exchange for his ground and the county would get cash. That way those folks at the airport side would get the 1031 exchange according to the IRS code, which means they wouldn’t have to pay capital gains since it’s an in-kind purchase.”

The conversation about that exchange has brought about conversation from those interested in the proposal. “I think the whole idea is a little bit confounded because the airport brings up a lot of strong emotions. Although, since I had altruistic intentions here of helping people at the airport site, I think it may be best to separate the airport issue from the county farm issue,” says Vander Molen. He explained that, at some point, the county may consider selling the “crop ground at the county farm to the highest bidder” and “completely separate from the airport”. “I’m going to modify what was proposed on Monday.”

When it comes to those emotions, Vander Molen said that, “I think some people see it as the county sort of exchanging taxpayer asset for furtherance of the airport, which is really not, because your exchanging land for cash.”

“I think there’s so many issues at play, it’s best to keep the two ideas bifurcated at this point. So we’ll leave the airport issue on its own, and then allow the county farm to resolve itself here in the next year or so. There’s also the issue with the residential care facility, and I think that’s all going to play into it and the timing of the sale,” says Vander Molen.

The other point of discussion with the sale of the county farm also includes the residential care facility. “I would expect in the next year or two, we will be auctioning off the county farm,” says Vander Molen.

Vander Molen explained that the facility is still leased and the county has several patients in the facility. “It’s operated by a third party now, and that third party is going to have to figure out what their future is. I haven’t heard anything definite as far as them changing course, but it’s always good to have contingency plans. We’re going to put a committee together to look at that issue too.”

The motion was tabled at the Supervisors meeting to allow further investigation into the proposal.

A copy of the proposed resolution is listed below:

MAHASKA COUNTY RESOLUTION NO._________

RESOLUTION APPROVING TRANSFER OF COUNTY FARM

WHEREAS, Mahaska County owns farm land collectively known as the “County Farm” near the intersection of Ford Ave. and Highway 92;

WHEREAS, the South Central Regional Airport Agency (“SCRAA”) is seeking construction of an airport (“Airport”) near Highland Ave. and Highway 163;

WHEREAS, property acquisition for the Airport may begin in 2015;

WHEREAS, property owners owning land at the airport site may be subject to significant capital gains upon acquisition of their property;

WHEREAS, such capital gains may be avoided by a like-kind exchange pursuant to Internal Revenue Code §1031 (§1031 exchange);

WHEREAS, the County Farm is a taxpayer asset;

NOW, THEREFORE, IT IS RESOLVED BY THE MAHASKA COUNTY BOARD OF SUPERVISORS to:

(1) Allow SCRAA to offer portions of the County Farm to landowners as compensation for acquisition of their property in a §1031 exchange;
(2) Direct SCRAA to compensate the County for any County property transferred at the County Farm at the market rate for such ground, the reimbursement being made to the County General Fund (Fund 01) as property tax relief;
(3) Allow surveys to be conducted at the County Farm for dividing the residential care facility from the remaining crop ground and/or for dividing property pursuant to a §1031 exchange;
(4) Authorize appraisals of the County Farm for purposes related to such §1031 exchanges;
(5) Terminate the current lease for the 2016 crop year to prevent automatic renewal;
(6) To forward this resolution to the current tenant as notice of termination for the 2016 crop year; and
(7) Forward this resolution to SCRAA for their consideration.

PASSED, APPROVED AND ADOPTED this _____ day of ___________, 2015.