The state attorney general’s office will investigate whether the state overpaid for 20,000 acres it bought from The Nature Conservancy in the northern Adirondacks for addition to the public Forest Preserve.
The probe by Attorney General Andrew Cuomo follows questions raised by the New York Post earlier this week about the deal, in which the state paid $9.8 million for land the private conservation group had purchased from a timber company for $6.3 million in 2004.
Both The Nature Conservancy and the state Department of Environmental Conservation said the price was set through outside appraisals, and they welcomed the investigation.
“By utilizing well-defined acquisition protocols — which include mandatory approvals by the attorney general and comptroller — we ensure that acquisitions are fair to the seller, fiscally sound, and achieve the state’s important public policy and economic development goals,” DEC Commissioner Pete Grannis said.
The controversy comes at a time when Gov. David Paterson is already proposing that the state stop new open space acquisitions because of the state’s budget deficits. And at least one critic said it showed why such land deals should stop.
Fred Monroe, executive director of the Adirondack Park Local Government Review Board, said the review of the land deal “is strongly welcomed in the Adirondacks.”
“We look for a thorough review and hope the state will follow through on a land purchase moratorium to set up a system so this doesn’t happen again,” said Monroe, the Chester town supervisor, speaking for Adirondack local government leaders who often oppose additional state land acquisitions.
It was Monroe who brought the deal to the attention of the New York Post.
The Post, known for a willingness to editorialize in its headlines, ran the story Monday under the banner: “NY gave environmental org. absurd $3.7M profit for forest,” prompting calls for an investigation.
The DEC and The Nature Conservancy have a long relationship involving coordinated land deals in the Adirondack Park, including a still-pending transaction in which the conservancy has acquired the former Adirondack woodland holdings of Finch Pruyn & Co. The conservancy will sell nearly 58,000 acres of it to the state at a price still to be determined.
Observers have noted that the Conservancy, as a private organization, can act much more quickly than the state when land wanted for public ownership goes up for sale. Later, the Conservancy sells some or all of the land to the state.
“The Nature Conservancy is confident that all land transactions conducted between our organization and New York state have been completed according to proper procedures,” Nature Conservancy State Director Bill Ulfelder said in a statement.
In the arrangement that has been questioned, The Nature Conservancy bought the 20,000 acres from paper company Domtar Industries of Montreal in December 2004, with an understanding that the state would buy it for future public use. The land includes Lyon Mountain, the largest mountain in the northern Adirondacks, and a mile of shoreline in Chazy Lake.
The sale from the Conservancy to the state for $9.8 million didn’t happen until late 2008, with the price being based on averaging the difference between two appraisals conducted in 2007. One valued the land at $8.8 million, the other at $11 million.
“That fair market value price was based on the average of two independent appraisals commissioned by DEC and accepted by the attorney general’s office,” the Conservancy statement said.
The Conservancy incurred more than $3.4 million in expenses during the four years it held the land, Ulfelder said, so its profit on the deal was less than $100,000.
DEC officials said two independent appraisals are required as a standard part of all its land purchase negotiations.
Categories: Schenectady County