Commissioners, RDC move forward with land acquisition

The idea of swapping county-owned land on State Road 43 in exchange for land owned by  Brett Franklin first was discussed during a joint council and commissioners meeting in April.

At the time, Commissioner’s President Gary Burton suggested the county consider a swap of 107 acres from the county that would allegedly cost $9 million to bring sewer to, for 30 acres owned by Franklin. The goal was simple: acquire land for the jail project without cutting into the $25 million allocated for the project.

Now, the proposed deal is for the county to swap 96 acres of county-owned land south of Franklin Road, including between five and seven acres that have Indiana Department of Environmental Management restrictions due to it being the former county landfill, for 9.64 acres of the 30 owned by Franklin.

The State of Indiana places limits on how much government agencies can lose if appraisals are too far off in a land swap deal, and those limits don’t apply to Redevelopment Commissions (RDC) that can consider other value-based factors that can’t be represented in an appraisal such as the county’s need for a location for the jail. Burton and County Council President Polly Chesser both sit on the RDC, along with RDC President Craig Coffman, member Bobby Hall and ex-officio member Derek Morgan, who is appointed by the Spencer-Owen Community Schools Board of School Trustees.

The process also happens to circumvent the approval of the county council, which serves as the fiscal body of county government.

Public records request provides approximate appraisal difference

Emails obtained through a public records request that the auditor’s office complied with show that Burton received the appraisals from Rich Figg of Bloomington-based Figg Appraisal Group on June 14, two weeks before the June 28 RDC meeting, and several days before the June 19 commissioners meeting. Transferring the property to the RDC to allow for the difference in appraised value was not brought up at that time.

Burton forwarded the appraisal reports to County Auditor Sheila Reeves. Reeves responded by asking if Burton wanted her to print copies for the other two commissioners – Bob Curry and Joel Lowe.

Burton responded the following Monday, June 17, “Please give me an extra copy for Brett Franklin. GB.”

Reeves then responded that she would do so, to which Burton responded, “Thank you! I will try to get with him before Wednesday if possible.

An updated appraisal was emailed to Burton on June 19, and that appraisal was forwarded to County Auditor Shelia Reeves on June 24.

While the appraisals themselves were not able to be obtained through the public records request, the attachment file names associated with the email indicate that 96.39 acres of county land was appraised and that 9.57 acres of the property owned by Franklin was appraised by Figg.

Another email from Chesser to her fellow council members, Reeves and the council’s attorney Tony Overholt gave insight as to what sort of gap exists between the appraisals. In the email dated June 9, Chesser also sought advice from Overholt as to whether or not the process as presented to them was indeed legal.

“It was reported that the county land was appraised roughly $100,000 more than Tri-State’s land,” the email reads.

Commissioner unaware of RDC purpose, process at July 3 meeting

The July 3 commissioner’s meeting was the first commissioner’s meeting following the receipt of the appraisals that the jail project and the RDC were mentioned in.

“The jail update has been moved over to the redevelopment committee,” Burton said.

County Attorney Dana Kerr went through the proposed timeline that was first discussed during the June RDC meeting.

“Can you explain more in depth as to why we’re turning this over to the redevelopment for those who aren’t up to speed? I’m a little behind on this myself,” Lowe said in the meeting.

Kerr explained that county land was likely to be appraised for more than the jail site property.

“My question would be are we leaving anything on the table,” Lowe said. “My worst fear is I don’t want to leave anything on the table here.”

Burton said that the infrastructure difference makes it valuable to the county.

“At what point did we decide to turn this over to the redevelopment committee?” Lowe asked.

Burton responded, “It has to come back to us anyway.”

Process circumvents council’s fiscal power

Then, during the July 8 council meeting, the topic came up twice, first as an update near the start of the meeting and again during public comment.

Chesser asked if Burton wanted to give the update and explain the RDC component.  

“We just turned it over to the redevelopment committee. By state guidelines, it’s best that we let them take care of the transfer of the property, that way if there’s any difference in values it goes into more of a redevelopment or economic development for the county,” Burton said. “We’re doing it the legal way, and we’re doing it the right way.”

He added that the environmental study will be pursued during this process as well.

“We obviously don’t want to do a transfer of property and find out that we have an issue,” he said.

Councilman Anton Neff asked several questions to clarify the timeline and specifically that the council would not have any vote on this land purchase. Councilman Andy Wood also asked if the “goal post” was being moved away from the 30 acres, and Burton said that the full 30 acres isn’t buildable.

Later, during the public comment portion of the meeting, former sheriff and currently unopposed Republican commissioner nominee Sam Hobbs asked several questions relating to the project.

“I kind of get the sense that this board change was in relation to something that happened. I don't think it happened on a whim. I kind of get the feeling that this whole circumvention of the council thing happened because there was something they wanted done and didn't want brought back here which looks like it worked out,” Wood said.

He noted that any county purchase goes through the council.

“I’m just seeing lots of things that undermine processes in order to get a desired result, and I don’t like it,” he said.

Neff noted, “There’s still the potential for a loss.”

He reiterated that the desire across the board was to have zero cost related to the site of the jail so more money could be put into the building of the facility. The first best option financially was to build upon land already owned by the county. The second best option, he noted, was to do an even land swap.

“Whether that’s an equitable swap is yet to be determined and whether that is exactly what we want to end up doing may or may not come to a vote,” Neff said of the council.

Councilman Nick Robertson also criticized the process.

“It seems like some of the truth is being withheld from us, and here we are to make some decisions. We control the purse strings. How can we make good decisions to protect the public if we’re not given good facts?” he asked before adding, “This bothers me.”

He pointed out that the initial agreement was that the trade would be for 30 acres.

“We can’t see an estimate? We can’t see appraisals? This is a farce,” he said.

RDC accepts property, attorney advises appraisals not for public

The jail project proportion of the July 11 RDC meeting started with Dustin Meeks, an associate attorney with Barnes and Thornburg.

“The reason to do that is the redevelopment commission has the ability to dispose of property using more simplified procedures than the county does,” Meeks said.

He explained the two resolutions. The first authorizes the RDC to acquire the property from the commissioners, and the second ratifies the receipt of the appraisals for the properties.

Kerr said that there would be a public hearing that will occur as part of the process, likely in September.

Chesser asked if the appraisals would be made available for the public to view.

“Both of the statutes, 36-7–14-19 and 36-7-14-22 provide that the appraisal documents are only for the review and information of the redevelopment commission, so those documents are not public records,” Meeks said.

Chesser asked what the purpose was behind those state statutes.

“The reason that the general assembly has provided this particular requirement around appraisals is that… the redevelopment commission exists as a more flexible tool for local units of government to engage in economic development transactions, And that often requires negotiation with third parties,” Meeks said. “The statute is structured to avoid a situation where the redevelopment commission is not able to engage in negotiations because the information that they give you creates a kind of information inequality between the negotiating parties, who then engage in negotiations with a third party or acquiring property from. So here, where, the redevelopment commission is going to acquire a piece of property, it would be disadvantageous, for example, for the owner of that property, to have a copy of appraisals that you have, to know what the true value of that property might be.”

Except, Burton already requested a printed copy of the appraisals for that property owner, Franklin.

Coffman asked if it could become public afterward.

Meeks said the term sheet, which would be set by the value of the county-owned property would be made public because there would be a 30-day period in which anyone could put in an offer in conformance with the term sheet to purchase the 96 acres of county property.

Meeks said that there is no law against making those appraisals public.

“It’s just that statutorily they’re designed to not be public records documents themselves for the strategic reasons that the redevelopment commission is engaged, generally in a property transaction related to those appraisals,” he said.

“The whole purpose of this confidentiality is to protect our entity when we’re in the negotiation process,” Coffman said.  

He said he wanted transparency afterward.

“Certainly after the consummation of the transaction, when there isn’t the possibility of that information being public would damage your negotiating position, there wouldn’t be any reason why you couldn’t publish those documents. It would just be potentially disadvantageous. And the General Assembly has provided the ability to not disclose that information to avoid that disadvantage,” Meeks said.

Coffman then opened the meeting to public comment.

“There’s gonna be a lot of unanswered questions at this point, but I am interested in your concerns so we can weigh those as a body,” he said. “We’ll be glad to be transparent about it when we’re allowed to.”

Hobbs asked if the RDC could legally share the appraisals if they wanted to.

“The statute provides that the documents are for the redevelopment commission’s information and not for public distribution,” Meeks said. “The statute doesn’t provide a penalty for the distribution of those.”

“I’m on board with this transfer, and I feel like it is absolutely in the best interest of the county. I’m not on board with not having appraisals being public. I want this to be totally, totally transparent,” Chesser said. “I’ve told multiple people that come to this meeting, it is going to be made public what the appraisals are and you’ll see that it’s not that far apart, and now that we can’t even do that, I can’t, that upsets me.”

Coffman noted that if the RDC thinks that the appraisals are too far apart, the RDC could decide to not move forward with the swap.

“I just want to touch base on the county's aspect with this,” Burton said. “We're trying to transfer a piece of property that we’ve had in our possession for over 50 years with no tax monies coming in on 96 acres. Zero dollars with the liability of a landfill, transferring that piece of property that can be used for a forest farm, tree farm, whatever for a usable piece of property with the infrastructure that we need, at no dollars, all we’re gaining is property tax on the backside of that.”

Burton could not answer how much the county would gain in property taxes.

The Indiana Department of Natural Resources offers a property tax incentive to landowners who agree to manage their land for timber, wildlife habitation and water quality through their CLassified Forest and Wildlands Program.

DNR provides the following explanation and example, “The enrollment in the program reduces that assessed value for tax purposes to $1 per acre. Taxes are then calculated based on that assessment: $1 x number of acres x tax rate. For a 40-acre tract at a two percent tax rate, the taxes would be $0.80 (landowner would receive minimum tax bill of $5).”

Councilwoman Amy Casebeer was present at the RDC meeting and asked about the timber on the county-owned land.

“My concern is Amy, if we market that timber and cut that timber, that is the only reason anybody would buy this property that I can tell,” Chesser said.

Casebeer asked if the timber value was included in the appraisal, to which Burton said it was not.

Sheriff Ryan White noted that to build at the current jail site, it would cost between $1.8 and $2.4 million to house the county’s inmates elsewhere and that the site doesn’t allow for additional growth should it be needed as the population grows in the future, placing the county in the same predicament in the future.

“Why would we spend that much taxpayer money building two jails when we can build one jail, get what we need and have the room for future expansion if that is needed? We will shoot ourselves in the foot if we build on that property,” White said.

Both resolutions were approved unanimously, 4-0, by the RDC. Morgan was not present for the meeting.

The commissioners moved forward with their identical resolution during their July 17 meeting.