Governor Paterson authorized Attorney General Andrew Cuomo on Tuesday to open an investigation into a land deal in which the state gave a stunning 57 percent profit to an already wealthy major environmental group.
Even as property values across New York collapsed, the state Department of Environmental Conservation paid the Nature Conservancy almost $10 million for 20,000 acres of Adirondack wilderness in October 2008, the New York Post reported Monday.
Only a few years earlier, the Conservancy had purchased the same land for $6.3 million.
"We intend to begin an investigation into the potential overpayment by the state for these lands in the Adirondacks and into questions about the evaluation methods that were used to value the property," a Cuomo spokesman told the Post. "Questions have been raised by the valuation of the land and the possible motivations and relationships of those involved, and we will review all of the above."
The initial Post report revealed that the sweetheart deal was based on appraisals that were a year and a half old, inflating the purchase price since real-estate values were still skyrocketing then. There is also a discrepancy between the price paid and the research of an independent state agency that found that property values in the area had gone up by only 14.4 percent.
Saranac Councilman Gerald Delaney, in whose town the majority of the land is located, told the Post that the sale was "a horrible deal all the way around.”
"Ten percent a year is a good return on land, but 57 percent in three years? I think it's clear the state has a cozy relationship with The Nature Conservancy," said Delaney
According to the Post, Paterson wrote in a letter to Cuomo that "under the current facts there is no suggestion that any criminal offenses have taken place," but added, "If you discover evidence of such criminality that warrants the expansion of this referral, we will considering expanding the scope to grant you that additional authority."
The probe is to begin immediately, examining the department and the actions of state Comptroller Thomas DiNapoli, whose office signed off on the deal.
DiNapoli also said that his office would investigate into the matter, telling the Post, “In light of the issues raised by the New York Post, we are reviewing the process of these types of transactions.”
The Nature Conservancy told NBCNewYork.com that the Post article omitted important information.
Marisa Biehl, Marketing Resource Center director said, “First off, the Conservancy did not make a '57 percent profit’ on the deal.”
Biehl said that the state paid fair market value for the land based on independent appraisals that were signed off on by Cuomo and DiNapoli in July and September 2008-- one month before the deal and not a year and half.
“In the rare instance that any funds remain after the project expenses are accounted for, The Nature Conservancy will put the money toward another conservation project that helps to advance New York State’s open space conservation goals that align with the Conservancy’s mission to protect ecologically important lands and waters for nature and people,” Biehl said.