Nature Conservancy’s Mike Carr says Domtar deal was done "by the numbers"
I spoke this morning with Mike Carr, head of the Adirondack Nature Conservancy. We spoke about the New York Post’s article, in which sources allege that the state overpaid for the massive Domtar land deal.
In 2008, that $9.8 million transaction added 20,000 acres to the Adirondack forest preserve. The Nature Conservancy paid only around $6.2 million for the parcel.
NCPR: HOW DO YOU EXPLAIN THE DISCREPANCY BETWEEN THE NATURE CONSERVANCY’S PURCHASE PRICE AND THE AMOUNT PAID BY THE STATE OF NEW YORK?
CARR: We go out and seek these big landscape sale transactions. This one was 104,000 acres, which means wet got discount at sale. The state only wanted 20,000 acres. Smaller retail blocks don’t get the same discount. Two appraisals were done independently for the state and reviewed internally by the DEC. The timber market was jumping in 2007 and 2008. Markets were very good, it appraised well. One of those two appraisals came back at 11 million dollars. They [the state] could have paid us 11 million dollars for this land.
NCPR: IN THE POST ARTICLE, APPRAISERS IN THE NORTH COUNTRY ARE QUOTED SAYING THAT THE PRICE PAID BY THE STATE WAS INFLATED AND OUT OF SYNC WITH MARKET RATES IN THE REGION.
CARR: They have no business commenting on commercial timberlands. They comment on housing markets. In this case, the experts [on timber land transactions] looked at comparable sales in Northeastern forests, actual trades.
NCPR: THE ARTICLE SUGGESTS THAT THIS WAS A SWEETHEART DEAL AND THE NATURE CONSERANCY PROFITED BY MILLIONS OF DOLLARS. IS THAT TRUE?
CARR: No. You have all of these costs, survey costs, subdivision blocks, property taxes paid by the Nature Conservancy. In this case, our costs exceeded $3.4 million. We just about broke even [after the sale]. It was very close.
NCPR: ATTORNEY GENERAL ANDREW CUOMO AND COMPTROLLER TOM DINAPOLI SAY THEY PLAN TO REVIEW THIS DEAL. WHAT DO YOU THINK ABOUT THEIR PROBE?
CARR: We?re delighted. We fully support the idea. These transactions get reviewed by the Comptroller?s office regularly.
NCPR: DO YOU THINK THE QUESTIONS RAISED ABOUT THE 2008 DOMTAR DEAL WILL AFFECT CURRENT NEGOTIATIONS OVER THE STATE’S PURCHASE OF THE FINCH, PRUYN AND FOLLENSBY LANDS IN THE ADIRONDACKS?
CARR: I don?t think so. This [Domtar deal] was done by the numbers. When you get facts in front of professionals, it will be abundantly clear that this was the right way forward.
"This [Domtar deal] was done by the numbers. When you get facts in front of professionals, it will be abundantly clear that this was the right way forward.". I think that this statement is probably correct. If the state wants to overpay for land, like it appears they may have done in this case, than more power to the TNC. Like they are saying if they have an opportunity to stick it to the state or any other buyer they will jump on it. They will do it again given the opportunity. The state is entirely to blame in this matter. Buyer beware! Brian if you want to follow up on this Post story why are you talking to Mike Carr? I would be interviewing the folks in the DEC's real property office and the appraisal companies that may have got the appraisal screwed up. I am no fan of these deals but if you are going to do them you better have competent people on both sides.
Maybe the appraisers didn't screw it up like Paul said. TNC bought this as part of a 100k acre deal and sold 20k to the state. Sounds like whole sale vs. retail. An AG investigation will be good to clear things up instead of all of these accusations
I agree the results of the investigation will be interesting. Even if these appraisals were correct, and they very well may be, why does the state have to pay that much for the land? The TNC may have taken closer to what they paid for the land, why not offer them that? Why not offer the lower of the 2 appraisals rather than split the difference like they did? If the state is required under some statute to pay the appraised value without any room to try and get the taxpayers the best deal then the system is still broken in my opinion.
In NCPR's report this morning, I believe TNC said there have been occasions where the state's appraisals have been less than TNC purchase price so they lost money. Why shouldn't TNC get the most they can with their supporter's money?
blackus, I totally agree. The TNC should try and get as much as they can, AND the NYS taxpayers should pay as little as they can. I agree the TNC did nothing wrong here.
The problem in my mind is how can we have faith that the state employee who would negotiate isn't going to get corrupted. It seems like the process they use is a good one. They got two independent appraisals and split the difference. I know Landvest, who was one of the appraisers, is very experienced in forest land real estate. Unless there is true corruptions with the appraisers, seems like nothing wrong happened. I guess an AG investigation will clear it up.
It seems to me you have to try and negotiate the best possible deal. The appraisal serves just the purpose you note to make sure that there isn't any kind of "corruption" but that doesn't mean we need to pay MORE than the appraised value. No one is going to criticize the real property office for for getting the state a good deal. Even if you think this is money well spent (I personally do not) why not spend the other 2 million on other open space projects! Lots of places in NYS can use two million dollars right now.
I am pretty sure they can't pay more than the appraisal. Just the the sears parking lot in Saranac Lake. The Village cannot pay more than their appraisal. It seems like the process they follow is a good one.
Anon 12:30. No, of course they can't pay more than the appraisal. But, again, why not pay LESS that the appraisal if possible. If the AG investigation shows that 2 million dollars of state funds were spent without a good reason than everyone should be a little bit upset. If the "process they follow" makes them pay 20% more than they have to with our money than I think the process is NOT good.
This is just another case of the Fred Monroe and his media supporters attacking their opponents (TNC AGAIN!) without all the facts. Fred Monroe and Fred Dicker don't even care if they have all the facts because they know that this story will play in Denton's papers, the Post Star, and Plattsburgh PR, and a lot of the right-wing local papers who will run this story – as Brian Mann even did initially – as a "scam."They win either way – nice work local media.
It appears there was good reason to may the 2 mil more: 2 independent appraisals. The only troubling thing that could come out of this AG investigation is if there was criminal corruption by the state TNC AND appraisal companies. The AG is not going to say "I think we could have negotiated a better deal" even if we could have.
I would like to see the AG investigate Fred Monroe and the Adirondack Local Gov't Review Board, (a taxpayer funded organization) to see how much of our tax dollars we spent on this witch hunt
Why didn't the state ask TNC how much they paid for the land?1:19,The Post-Star isn't perfect but they aren't right-wing either: they endorsed Kerry and Obama.
The issue is not The Nature Conservancy or conservation. The issue is that the state is making bad deals. We all — as taxpayers — should appreciate the investigation of the state AG and comptroller to make sure our money is well spent.
scratchy: Why didn't the state ask? Because they new. real estate transactions are public info.Beside, it wouldn't change anything. The appraisals would change and therefor the purchase price wouldn't change
"It appears there was good reason to pay the 2 mil more: 2 independent appraisals." Anon 1:21. Again the appraisal only sets the UPPER limit of what we could pay. You don't have to blindly follow and appraisal. Real estate does not come with a no-haggle price tag. It is the ORPS's job to negotiate the best deal. If they have then fine. But this looks strange to me, apparently it does to the administration as well.
This is interesting. I decided to look at the financial statements for the TNC to see if I could fish out the expenses on this Adirondack land in question. Without the notes it is almost impossible to locate the specific expenses related to this particular land. My guess is that their estimates are accurate, I wouldn’t bother asking for the details. In the 2009 statements I found a strange note. On November 25th of 2009 TNC set up a LLC for the sole purpose of selling 50 million dollars in bonds to pay off a debt to the John Hancock Life Insurance company. As I recall John Hancock owned a large amount of NYS timberland through some sort of subsidiary (very common for insurance companies to hold timberland as a long-term asset). I am curious if this debt was related to TNC purchases of Adirondack timberland? As I recall there was a group called the Hancock Timber Resource Group that was involved with TNC and the state in a sale of some land on the Tug Hill. The buyer of all 50 million dollars worth of the bonds (at a 3.9% interest rate) was something called “The New York State Environmental Facilities Corporation” (aka NYS). Brian, do you think these type of transactions are something that NYS should be involved in? Why do you think they are doing it? Is this a normal buyer/seller relationship going on here? How does the state have 50 million dollars to enter into this type of transaction and what is the state’s interest involved in the transaction. If you talk with Mike Carr again, could you ask him what this type of transaction is for?
Why does the Conservancy pay taxes when it does not have to? Is it to make them look like heroes?
tnc dealt with Hancock when they purchase the Tahawus tract. That was a very complicated deal and appeared to have some risk for them. I believe there were some NY Times articles back then that described how they financed it.
Why does NYS buy 50 million in bonds from TNC so that it can pay John Hancock? Since when does NYS have 50 million dollars to lend even with a 3.9% return. It is not NYS taking the risk? I don't understand this transaction. Brian, can you help us here you have been following these deals? The PDF is here look at page 27:http://www.nature.org/aboutus/annualreport/files/fs_fy2009.pdf
I concur that we need an investigation into Fred Monroe's use of taxpayer funded Adirondack Local Gov't Review Board funds!How many times has he been to NYC on our dime to talk with Fred Dicker about his personal vendettas? The Local Government Review Board, which I believe his wife is a paid employee of, is the biggest waste of our taxpayer dollars. There is not one result from that board beside obstructing state business!When will someone – NCPR? Adirondack Almanac? – look into this!
5:13,"The Local Government Review Board, which I believe his wife is a paid employee of, is the biggest waste of our taxpayer dollars. There is not one result from that board beside obstructing state business!"No the computers that APA employees used to look at pronography would be the "biggest waste" of taxpayer dollars. The Board has nominated several mainstream individuals to the Board and represents the views of most Adirondack residents who believe the APA overreaches. I suppose you might consider that "obstructing state business" but i would rather have bad policies obstructed. As far as Fred Monroe wasting taxpayer dollars, on what basis do you believe that is occurring? If the allegations are credible it should be investigated.
The Adirtondack Local Governemnt review Board sole statutory purpose is as a watch dog of the Adirondack park Agency. This has nothing to do with the APA, so is Monore acting in his capacity the head of the LGRB? Has any LGRB money from the state been used in Fred's involvement in this story?