Wednesday, April 18, 2007

Fort Wayne Redevelopment Commission Appears to Have Violated State Law in Harrison Square Land Acquisition

Last night's Fort Wayne city council meeting was the first to really address the Harrison Square issue. Deputy mayor Mark Becker and other city officials presented the memoranda of understanding for the hotel developer as well as Hardball Capital.

The council had a very lively discussion about the project and it started out with a bang when Tom Smith asked how the Redevelopment Commission could spend over $12 Million dollars without council approval and without appraisals. The city responded by saying that 2005 CEDIT bond allowed them spend money on "major projects that would be a catalyst for downtown". They also stated they used this bond money to pay for $4.2 Million of the land acquisition with the balance coming from the Jefferson Pointe TIF which only purchased properties along Jefferson. The city also claimed that they didn't need the appraisals because state law gives them the right to purchase land above appraised value.

Don Schmidt quickly countered this by quoting the Indiana Code that seems to suggest while they can purchase land above appraised value they must still have the appraisal first. Read the statute for yourself:
The redevelopment commission shall first approve and adopt a list of the real property and interests in real property to be acquired and the price to be offered to the owner of each parcel of interest. The prices to be offered may not exceed the average of two (2) independent appraisals of fair market value procured by the commission except that appraisals are not required in transactions with other governmental agencies. The prices indicated on the list may not be exceeded unless specifically authorized by the commission or ordered by a court in condemnation proceedings.

It appears to me that the Redevelopment Commission can certainly pay MORE for a property but only after they get appraisals and offer the averaged appraised value. I think it's quite clear that the Redevelopment Commission violated state law in purchasing the Harrison Square land.

Greg Leatherman's response was that the above statute only applies to Eminent Domain which is a RIDICULOUS argument as anyone that reads the statute can see. The council attorney was going to look into the issue and report back...

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