“State law says that once the state appraises a piece of property, they can only pay it a certain amount above appraisal.” -- Atlanta Mayor Kasim Reed during a radio interview Aug. 7
Plans to build a new $1 billion stadium in downtown Atlanta may sound like a project with limitless cash. But there are boundaries concerning what can be spent, according to a key player in the effort.
Atlanta Mayor Kasim Reed recently took to the radio to discuss negotiations with Mount Vernon Baptist Church’s leaders to buy its property. The land on which that historic church sits is necessary to build the new sports facility on a preferred site.
State officials have said they cannot offer any more than the highest appraised value they receive, $6.2 million in this case. The church initially said a fair price is about $20 million. But the mayor announced last week that Mount Vernon has lowered its asking price to $15.5 million.
The mayor told Sports Radio 690 The Fan that the Georgia World Congress Center Authority, which is in charge of negotiations with the church, can only offer a certain amount of money.
“State law says that once the state appraises a piece of property, they can only pay it a certain amount above appraisal,” Reed said.
PolitiFact Georgia wondered whether the mayor is correct. Is the state limited on how far it can move the financial goal posts to strike a deal?
A Mount Vernon attorney said such limitations may hamper negotiations.
“You have stated that the Authority is constrained by law and can only offer appraised fair market value for land which it acquires. … Consequently, unless the Authority is prepared to obtain from private sources sufficient supplemental funds to pay a realistic price for the Church property, I believe further negotiations would not be fruitful,” the attorney, Bill Montgomery, wrote in an email to Senior Assistant Attorney General Denise Whiting-Pack.
For those who’ve just joined this saga, the Atlanta Falcons have been working with the city, the Georgia World Congress Center Authority and others on a deal to build a new stadium, replacing the Georgia Dome.
The city would prefer to build the new stadium on land south of the Dome in large part because of its accessibility to MARTA. In order to build there the city would need land where two longtime churches stand, Friendship Baptist Church and Mount Vernon.
The initial deadline to work out a deal with the churches was Aug. 1. Although the city struck a deal with Friendship, the GWCCA was unable to do so with Mount Vernon. Reed held a news conference Aug. 6 asking all involved to continue the discussions.
The land acquisition process in Georgia seems simple. A state or local agency does research on the property’s value and offers a price. The landowner takes it or leaves it. That’s unless the government really wants the land. In that case the government can buy it whether the property owner wants to sell or not under the powers of eminent domain.
Reed’s communications director, Sonji Jacobs, referred to language in the state constitution to explain the mayor’s point — Article III, Section VI, Paragraph VI(a).
It reads:
“Except as otherwise provided in the Constitution, (1) the General Assembly shall not have the power to grant any donation or gratuity or to forgive any debt or obligation owing to the public, and (2) the General Assembly shall not grant or authorize extra compensation to any public officer, agent, or contractor after the service has been rendered or the contract entered into.”
Said Jacobs: “Basically, if the state does not pay appraised value, it could be thought to be providing an unearned benefit which is not allowed under Georgia law. Based on Mayor Reed’s long tenure in the Georgia General Assembly (11 years) … lawmakers have not paid more than 10 percent above appraised value as a matter of custom and practice if they do make an exception due to the furthering of a public purpose.”
The state has referenced this section of the constitution before on a similar topic. In 1995, the Georgia Board of Regents asked the state Attorney General’s Office for guidance on whether it could trade a lease for its land in return for the endowment of a research chair if the endowment equals the fair-market value of the lease. An assistant attorney general cited the clause in a legal opinion.
The Attorney General’s Office forwarded the opinion to another Atlanta Journal-Constitution reporter in response to the same question we had about whether state law prohibits state agencies from offering more than appraised fair-market value for property acquisition.
“In summary, it is my official opinion that Regents may lease its lands in return for the endowment of a research chair if the endowment is equal to the fair market value of the lease and the term of the lease is reasonable,” wrote the assistant attorney general, Cheryl Janson.
PolitiFact Georgia contacted officials within the Georgia Association of Assessing Officials. They were unaware of any state rules limiting purchase price when the government buys land. Private real estate attorneys were also unaware of any limits.
“Certainly the public press accounts on this issue do not seem to disclose a public restriction,” Hugh Wood, a partner with Wood & Meredith, a law firm that handles real estate litigation, said in an email.
The Georgia Department of Transportation sent us its booklet on right-of-way acquisitions. It mentions that the state agency cannot offer less that an appraiser’s estimate of the property’s fair-market value. It does not mention whether GDOT can offer more money than the appraisal.
“Keep in mind GDOT policy is regulated … and other state agencies (GWCC) are not,” GDOT spokeswoman Natalie Dale told us via email. “… What might bind them may not have an impact on us and vice versa.”
Reed’s statement is based on an interpretation of a portion of the Georgia Constitution, purportedly long-held best practices and an attorney general’s opinion on property leases that’s almost two decades old.
The mayor, however, specifically said this: “State law says that once the state appraises a piece of property, they can only pay it a certain amount above appraisal.”
That’s a precise statement. And our research found no laws establishing this limit.
We rated Reed’s claim False.
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