Posted on April 7th, 2010 2 comments Add a comment >>
The New York Post has raised questions about the state’s purchase of Lyon Mountain from the Nature Conservancy in late 2008 for $10 million. Four years earlier, the conservancy paid $6.3 million for the same twenty thousand acres.
In an editorial on Wednesday, the Post called the rise in price “a staggering 57 percent profit . . . at a time when property values were collapsing.”
At the request of Governor David Paterson, the state Attorney General Andrew Cuomo has opened an investigation into the matter.
Fred LeBrun will write about the controversy in the next issue of the Explorer. Meantime, I called Connie Prickett of the Adirondack Nature Conservancy for her view of things. She denied the Post’s implications that this was a sweetheart deal, saying the state’s purchase price was determined by two appraisals of the property. The appraisers were hired by the state.
“We don’t have any influence over the appraisal process,” she said. “It’s completely independent of us.”
She also pointed out that the conservancy bought the property from Domtar Industries as part of a larger deal involving 104,000 acres. The rest of the land was bought by Lyme Timber, but because this was handled as a single transaction, Prickett said, the conservancy benefited from the economies of scale. That is, it paid a lower per-acre price than it would have if it had purchased the twenty thousand acres in isolation.
Prickett said the whole project cost the conservancy $9.7 million when interest, taxes, maintenance, and other costs are taken into account. This means the conservancy pocketed $100,000, not $3.7 million.
“You could call it a profit,” Prickett said. “We look at it as funds that can be rolled over into another project.”
After the Domtar deal, in fact, the Adirondack Nature Conservancy purchased 161,000 acres from Finch, Pruyn & Company in 2007 and the 14,000-acre Follensby Park in 2008. The state expects to buy much of this land. Prickett said she doesn’t expect the controversy over the Domtar sale to delay these transactions.