A three-member panel of the Arkansas Appraiser Licensing and Certification Board wants to know why appraisers increased the appraised value of a property parcel shortly before it was sold to the state.
They voted Thursday to recommend that the full board investigate the appraisal that jumped more than $1 million between February and September 2013.
The panel heard testimony Thursday from appraisers Stephen Cosby and Eric Edmondson, as well as appraiser trainee Blake Casey, all employed by CBRE Inc. The company appraised a parcel of two properties owned by the Hoffman Family Trust on North Street off LaHarpe Boulevard in Little Rock where the Department of Arkansas Heritage is planning to build a new headquarters.
The appraiser board is investigating a June 20 complaint from state Rep. Kim Hammer, R-Benton, alleging that the appraisers amended their initial valuation of the property after several conversations with Heritage Department staff including an email containing the contract price reached between the department and the property owners.
On Thursday, the panel said the appraisals did not include some of the details and records of research and work that should have been included to support the appraisal of such a "complicated property."
But they said they weren't ready to issue a ruling.
"Based on the size of this case and the complexity of it, I don't feel like in this informal setting, a three-member panel can make this decision. I think it needs everybody's eyes on it at a hearing before the full board," board Chairman Drew Vance said.
The group initially valued the about 2.4-acre property at $1.55 million in February 2013 but amended that price to $2.6 million in September 2013.
A letter from Arkansas Building Authority Director Anne Laidlaw to Gov. Mike Beebe, obtained through a Freedom of Information Act request, endorses the property purchase. Laidlaw wrote that the appraisal change was made because the property was originally classified as "depressed industrial area" and the second appraisal changed the classification to "commercial purposes."
Laidlaw also noted that the owners originally had asked for $3.5 million, countered by Heritage Department Director Martha Miller who offered $1.5 million. The two negotiated a final price of $2.5 million.
Cosby told the panel Thursday that they based the new value partly on information they had received about other similar properties in Little Rock.
"I hear your criticisms, and we will heed those in the future," he said. "We probably should have explained better where we were going and where we weren't going in the second report."
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.
Department officials have said the move will consolidate the agency's operations next to a warehouse space where the agency already keeps its collections.
The Tower Building is owned by lawyer and lobbyist Graham Catlett. 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.
Hammer said he has worked with Catlett on legislation in the past and said Catlett initially brought the matter to his attention.
Hammer said one of his larger concerns about the land deal is whether the state is appropriately spending money. Several appraiser board members said Thursday that the board cannot change the sale price or amend the property contract.
"I think it needs to be understood that our focus in a hearing like this has nothing to do with value. We can't make a determination of if the values are right or wrong," board member Burney Lightle said. "Our focus is on procedures ... what you did, and how you supported what you did. And in these two appraisals, there is a disconnect."
The full board will meet Wednesday, when it will decide whether to schedule a hearing for the investigation. That hearing would be more formal, include charges of misconduct and require a court reporter and presentation of evidence.
Metro on 12/12/2014