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