The Arkansas Appraiser Licensing and Certification Board is investigating whether an appraisal for property being purchased by the state was improperly increased by about $1 million.
The board will hold a nonjudicial hearing today to determine whether appraisers Eric Edmondson and Stephen Cosby along with appraiser trainee Blake Casey acted inappropriately when they increased the value of a parcel of properties under negotiation for purchase by the state. The properties on North Street in Little Rock off LaHarpe Boulevard will be the location of a planned 50,000-square-foot headquarters for the Department of Arkansas Heritage.
According to a complaint filed with the board by Rep. Kim Hammer, R-Benton, the appraisers first appraised the properties -- three pieces of land that make up about 2.4 acres total -- for $1.55 million on Feb. 5, 2013. Hammer said the appraisers amended that amount to $2.6 million on Sept. 19, 2013, after several conversations with Department of Arkansas Heritage staff members.
In his complaint, Hammer included documents claiming that the department had reached a final agreement to purchase the land for $2.5 million on Aug. 27, 2013.
"How could the appraisal jump $1 million in such a short period of time?" Hammer said when reached by phone Wednesday. "That's the merit of why I decided to file this complaint."
According to online tax records of the Pulaski County assessor's office, one parcel included in the headquarters purchase was valued by the assessor's office at $480,750 including the land and buildings but was valued at $1.2 million in the contract for sale. A second property in the sale was valued at $664,910 by the assessor's office but was included at a sale price of $1.15 million in the contract. The department also signed a third contract to purchase a building at 1120 North St. for $150,000.
Hammer filed his complaint June 20 with the Appraiser Licensing and Certification Board, which held jurisdiction and probable-cause hearings earlier this fall, where board members agreed there was enough evidence to move forward with today's hearing.
The Department of Arkansas Heritage currently rents three floors in the Tower Building at the corner of Fourth and Center streets in downtown Little Rock. The Arkansas Arts Council, the Arkansas Department of Historic Preservation, the Arkansas Natural Heritage Commission and the Department of Arkansas Heritage director's office would all move from the Tower building to the new headquarters, which is planned for a location next to where the department's collections are stored on LaHarpe Boulevard.
The Tower Building is owned by lawyer and lobbyist Graham Catlett, whom Hammer said he has worked with on legislation in the past. Catlett leases space to the Department of Arkansas Heritage for about $440,000 annually, according to Arkansas Building Authority records. The lease would not be renewed after the department's headquarters is built.
"My disclaimer on this is Mr. Catlett is a big supporter of mine. I've worked closely with him on [some] nurse practitioner bills. He brought this to my attention," Hammer said, adding that after he looked at the records, he had concerns of his own. "When I started looking into it, what brought it above the water for me was the jump in the appraisal value in just such a short amount of time."
Lee Gordon, the director of the Appraiser Licensing and Certification Board, said the board's ability to investigate and sanction is limited to the appraisers. The board cannot disqualify the contract or make either party lower the price if it determines the appraisal was improper.
When appropriate, the board can caution appraisers, suspend their licenses or limit the value of the property they are allowed to assess.
Hammer said he wanted the problems he saw with the appraisal to be addressed before looking into any other complaints about the department's move.
Hammer's complaint included several emails between Department of Arkansas Heritage Director Martha Miller and the appraisers. Information about the investigation obtained by the Arkansas Democrat-Gazette through a Freedom of Information Act request included some of the correspondence among Miller and the appraisers Edmondson, Cosby and Casey.
In several of the emails, Miller describes occupancy and rental changes in the properties and asks, in a May 28, 2013, email, whether those would "constitute a material change in the valuation report."
On July 22, 2013, she wrote Cosby saying, "I would appreciate the opportunity to discuss with you the possibility of obtaining additional valuation information employing a hypothetical condition which the Department is considering."
In an Aug. 27, 2013, email, Miller sends the contracts for the property to Casey.
Casey responds in an email in September 2013 that he has spoken with the owner of the property about improvements that "will be kept for approximately 12 months before they are razed."
There was no email describing the hypothetical condition Miller mentioned or whether the temporary improvements were part of the decision to increase the appraisal of the property.
The appraisers' answers to the complaint, which have been filed with the appraisers board, were not included in the Freedom of Information request because of the open investigation. A call late Wednesday to the company where the appraisers work -- CRBE Inc. -- was not returned.
Miller said through Department of Arkansas Heritage spokesman Melissa Whitfield Wednesday that she was "aware of the complaint, didn't know that the hearing was happening tomorrow, and she doesn't feel the need to comment on it today."
Metro on 12/11/2014