Perdue failed to disclose land buy near prized tract
Acreage next to the governor's Houston County home abuts a pristine forest that's slated for major development
Ken Foskett, 10/28/2006
Gov. Sonny Perdue took office in 2003 after campaigning for greater transparency in state government. But within months, he bought 101 acres next to his home in Houston County without disclosing it as required by state law.
The omission obscured a conflict of interest Perdue faced in 2004 when the state had to decide whether to protect a major tract of conservation forest abutting the governor's land.
The state decided it couldn't afford to buy the pristine forest, which wound up instead in private hands. The new owners plan to create a large residential and commercial development in the 20,000-acre Oaky Woods, a black bear habitat used by hunters and prized by environmentalists for more than 40 years.
Nothing in the public record suggests that Perdue's actions as governor were motivated by the potential for personal financial gain.
But the governor's failure to disclose his conflict was the sort of secrecy he had campaigned to fix, saying it undermined public confidence in state government.
Private development of Oaky Woods has driven up demand for nearby tracts of undeveloped property dramatically. The assessed value of Perdue's 101 acres has more than doubled to $750,100 since Oaky Woods was sold, tax records show. Recent sales of nearby land indicate the market value is much higher.
In a written statement to The Atlanta Journal-Constitution the governor did not respond to questions about his land transactions and possible conflict of interest.
Perdue said was "sorely disappointed" the state was unable to acquire Oaky Woods. "I was and continue to be in favor of the state acquiring Oaky Woods and preserving it in trust for future generations of Georgians," Perdue wrote. "In fact this was the very land on which as a young boy I first learned of the majesty of the outdoors."
Agency chief unaware
Perdue's tract off Ga. 247, next to his longtime home and 58-acre spread, was transferred into his name in May 2004. The deed was recorded shortly after state officials decided against buying the Oaky Woods forest.
The governor apparently bought the land 10 months earlier, using a limited liability company named Maryson. Public documents listed just one officer for the company, Stephan Holcomb, a dentist and family friend of Perdue's who was Maryson's registered agent.
Perdue paid the 2003 tax bill on the property after it was acquired by Maryson, Houston County tax records show, and again in 2004 once the land was transferred to his own name.
The state agency chief who had weighed the possibility of buying Oaky Woods said Perdue never mentioned that he owned adjacent property.
"I never knew anything whatsoever about any land that he bought, any land that he owned," said Lonice Barrett, the former Department of Natural Resources commissioner who now has a key position on the governor's executive staff. "We never had any conversation there of any kind, in any regard."
Perdue also did not disclose the property or any interest in Maryson on his financial disclosure forms for 2003 and 2004, as required by law. Under laws in place at the time, elected and senior appointed officials were required to complete annual disclosure statements listing ownership interests in companies, fiduciary positions and ownership interests in real property.
In 2003, Perdue proposed new laws that would have required officials to disclose even more information. The legislation would have required officials to describe the exact location of property they owned, ending the common practice of simply identifying acreage and a general location. The measures failed that year, but passed in 2005.
Perdue's 2005 financial disclosure form noted "additional acreage acquired in 2004" in the portion where he reported ownership of his home.
'A legacy tract'
In February 2004, Weyerhaeuser Co., the paper and timber giant, announced it was selling more than 300,000 acres of timberland in Georgia. The sale included Oaky Woods.
State officials with the Department of Natural Resources spent two months exploring strategies to purchase the land, a wilderness stretched along the Ocmulgee River that then-DNR chief Barrett considered "a legacy tract" for its ecological significance.
In 1998, state botanists discovered a rare habitat at Oaky Woods — the remnant of a prairie that is home to several rare plants. Georgia has leased Oaky Woods as a hunting and wildlife preserve for nearly 40 years. Acquiring it for permanent protection was the department's top priority, according to agency records.
The state, facing a tight budget year, a difficult time frame to finance the purchase and a potentially daunting $30 million price tag, did not bid on Oaky Woods.
The state also turned down a chance to acquire the property from a national preservation group. The Nature Conservancy told the state it was prepared to bid $26 million for the land — provided the state pledged to buy the land from the conservancy at some future date.
Citing financial constraints and no clear source of future funds to pay the conservancy, Barrett turned the offer down in May 2004.
At the end of June, the group of Houston County developers emerged as the winning bidder for Oaky Woods, officially closing on the property Sept. 14 for $32.1 million. The developers have since laid the groundwork to develop a planned community of town centers, commercial space and industrial sites.
The 25-year build out could include up to 35,000 new homes, according to Scott Free, a 25 percent owner in Oaky Woods Properties, which now owns the land.
Land's value affected
The state's decision not to buy Oaky Woods for preservation had a dramatic effect on the potential use and value of nearby tracts.
The 101 acres Perdue bought in 2003, combined with his house and the 58 acres on which it lies, now have an appraised value of more than $1.35 million. The appraised value, however, probably is below market value.
Large tracts around Oaky Woods have been selling briskly, including one sold by the governor in 2004.
In June 2004, a month after Weyerhaeuser closed sealed bidding on Oaky Woods, Perdue and his sister sold 280 acres about a mile north of Oaky Woods for more than $15,700 an acre — $4.4 million in all.
Last month, the Oaky Woods developers paid $35,000 an acre for undeveloped land about a half mile from Perdue's home.
This summer, Perdue acknowledged the potential conflicts of interest he faces over buying and selling land while in office. Explaining a recent investment in Florida, Perdue said he didn't want to buy Georgia land because he didn't want to be accused of a conflict.
"If I bought land within 100 miles of a new road construction, I'd be accused by the other side of influencing that," Perdue told The Associated Press.
When discussing the Florida property, however, Perdue didn't acknowledge that he had bought Georgia land next to his home since becoming governor. Unlike some previous governors, Perdue has not put his assets in a blind trust, preferring to handle his own business affairs while serving as governor.
Hubert A. Williams, who sold the land next to Perdue's Bonaire home to Maryson in 2003, said the governor had approached him about buying his land on and off "for years."
Williams said Perdue negotiated directly with him in the 2003 sale. He said Perdue told him he wanted the land for his grown children and grandchildren as a kind of family homestead.
"Finally the price got right, and we reached a deal," said Williams, who owns a chemical business in Macon.
Williams said he was satisfied with the price of $303,000, or $3,000 an acre.
Limited liability rules
Williams said he did not know why Perdue purchased the land through Maryson, a limited liability company that was created just eight days before the closing.
Limited liability companies are commonly used to purchase real estate because they offer tax advantages and the ability to share ownership among several partners.
Limited liability companies also are legally required to provide far less public information about ownership than corporations.
They can be formed by an attorney and then transferred to a group of partners, without any of the partners having to be disclosed in public records.
Maryson was organized by Perdue's attorney, state Rep. Larry O'Neal (R-Warner Robins), a tax and real estate lawyer who has formed dozens of limited liability companies, often choosing the full or partial names of partners to create the company name. Mary Perdue is Perdue's wife.
Barrett, the former natural resources commissioner who explored the options for acquiring Oaky Woods, said he discussed the land with Perdue in only a few, passing conversations. Barrett said Perdue encouraged him to find a viable financing option.
Barrett said he could see none, and the governor put forward no plan or initiative of his own.
'Fiscal crisis' for state
In his statement, Perdue said the Oaky Woods sale came at a time of "fiscal crisis" for the state and on a timetable the state could not meet.
"One of the biggest frustrations of my administration so far has been the way Weyerhaeuser made public acquisition of that land impossible," Perdue wrote.
Weyerhaeuser spokesman Bruce Amundson on Friday said Weyerhauser had discussed the pending sale with a state official and invited the state to be a part of the bid process.
"We ran a disciplined and fair process that allowed all parties, including the state, a fair and equitable opportunity to bid on the lands," Amundson said.
Former Department of Natural Resources chief Barrett, a Perry native who grew up hunting and fishing in Oaky Woods, said he has agonized over the state's failure to secure the land.
"All of us at DNR had loved that piece of property for so long," Barrett said. "If I had my life to do over again, I would have pushed harder than I did."
(Original URL: www.ajc.com/metro/content/metro/stories/2006/10/27/1028metperdueland.html)
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Also see: Connecting dots on Sonny’s Land Deals & Tax Breaks
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