Originally created 02/25/02

Land buying isn't unusual for businesses



From a business standpoint, there's nothing unique about what the Augusta Country Club has done in Sand Hills and other adjacent neighborhoods.

Large, landlocked entities such as universities, malls, hospitals and churches often buy property on their outskirts to expand or create buffer zones. Successful organizations often need room to grow.

"It's quite common that someone did not plan far enough ahead in the beginning," said David Moretz, a commercial agent for Rex Property & Construction Management.

One challenge of land acquisition is owners who don't want to sell at any price, Mr. Moretz said.

For private companies, it can be a waiting game. When stubborn owners die, their children are often willing to sell the property, said Frank Mears, a member of the Georgia Real Estate Commission's Education Advisory Council.

Government agencies can speed things up by wielding eminent domain, condemning a property and paying the owner fair market value for it. Georgia's Board of Regents, which oversees state universities, has the power to do that, but its own real estate guidelines discourage it.

"Certainly it's a vehicle of last resort," said Dr. J. Michael Ash, the vice president for administration and finance at the Medical College of Georgia.

MCG acquired lands to assemble its 88 acres downtown, including both the college and the hospital. For example, the Thunderbird Motel across 15th Street became the Alumni Center.

The Board of Regents paid nearly $3.7 million to Sears, Roebuck and Co. in 1990 and 1994 for the land near the John C. Calhoun Expressway overpass at 15th Street. A Sears store and Sears auto center became two Medical College of Georgia annexes.

On behalf of Augusta College - now Augusta State University - the board bought property along McDowell Street and the odd-numbered side of Katherine Street in the 1960s and '70s. Most of it is being used for parking. The Maxwell Alumni House on McDowell Street was left to the college in a will in 1972. Another Katherine Street property was bought in 1999 for $89,167 after its owner died and her heirs sold it to the school, courthouse records show.

If the university expands further, it will probably be in the Wrightsboro Road area, said Kathy Hamrick, the special coordinator for academic and master planning. The school needs more parking and space for family housing. It has expressed interest in buying the Masonic Temple on Wrightsboro Road, which could be used as a conference center or continuing education building, she said.

Big churches also like to expand facilities as their congregations grow. In 1998, Warren Baptist Church bought 3.36 adjacent acres for $400,000 from Taylor Limited Partnership, which owns Taylor Auto Group next door to the church. The church has first buying rights to an additional 2.88 acres.

The church and the auto dealership worked together when the land became available, Associate Pastor Terry Doss said. The land allowed for a retention pond and a ball field. Future needs include more ministry buildings, a nature trail and additional parking space, the Rev. Doss said.

"The Lord generally provides, and I think he does that in the business world as well," the Rev. Doss said.

In many cases, when landowners find out an entity with deep pockets wants their land, they're tempted to raise the price. That has led to the use of straw buyers - the industry term for brokers who make purchases to hide the real buyers' identities.

Walt Disney used straw buyers in the 1950s to assemble the land in Orlando, Fla., that would become Walt Disney World. Willard Hogan, a commercial agent for Meybohm, acted as a straw buyer to purchase 12 residential properties along Capps Street in the early 1990s, which allowed Rouse Co. to expand Augusta Mall.

The practice is legal, and considered ethical.

"If the price goes up, everybody loses," Mr. Hogan said. "It can get inflated to the point where the buyer isn't interested."

Reach Johnny Edwards at (706) 823-3225 or johnny.edwards@augustachronicle.com.