Land deal said to aid political donor

Sources name Hackerman as `benefactor' in plan to sell conservation acreage

October 14, 2004|By David Nitkin | David Nitkin,SUN STAFF

Construction company owner Willard Hackerman, a prominent political donor and Baltimore power broker for decades, stands to receive a major tax break from a secret deal to purchase state-owned conservation land at a cut-rate price, sources told The Sun.

Hackerman, president and chief executive officer of Whiting-Turner Contracting Co., is the unnamed "benefactor" mentioned in state documents seeking to buy an 836-acre parcel of land in St. Mary's County that was acquired with taxpayer conservation dollars just eight months ago, several sources familiar with the transaction said.

Environmentalists and lawmakers have assailed the proposed deal because the state is planning to sell the protected forest property at the same $2.5 million price it paid for it - without getting fresh appraisals that would reflect soaring land values in fast-growing Southern Maryland.

Additionally, the sale would occur without a written agreement that the land would be protected from future development, according to documents.

"This smells, and it looks sleazy," said state Sen. Roy P. Dyson, a Southern Maryland Democrat.

Hackerman did not return two messages left at his office seeking comment.

A politically connected force in Baltimore development for decades, Hackerman's Whiting-Turner Contracting built such projects as Harborplace and the city's Convention Center. Hackerman is a regular donor to Democratic campaigns but has also given to Republicans. Federal and state elections records show that he donated $30,150 to various campaigns and committees in the past five years, including $1,000 to House Speaker Michael E. Busch, $15,000 to the state Democratic Party and $10,000 to the Maryland GOP.

He is considered a member of Comptroller William Donald Schaefer's inner circle and served on the comptroller's transition committee in 2003. As a member of the three-person state Board of Public Works, Schaefer would cast a vote on whether the St. Mary's land should be sold to Hackerman. A spokesman said the comptroller was not available to comment.

The St. Mary's land was a small part of a $34 million plan by the administration of Democratic Gov. Parris N. Glendening to protect 25,000 acres on the Eastern Shore and Southern Maryland. But, sources say, the administration in its final days also quietly hatched a deal to re-sell the 836-acre tract to Hackerman.

So, in a move that has surprised environmentalists, state officials are in the process of declaring the tract surplus property. They have said that a "benefactor," whom they refuse to name, wants to buy the land from the state at cost and donate development rights to the Maryland Historic Trust. Some of the land would go to St. Mary's County for schools. But for tax reasons, state officials say, those transfers could not happen until he has held the property for 12 months.

"The benefactor's history of philanthropy and his reputation as a man of his word has eased some initial concerns regarding selling the property without a conservation easement," state Department of General Services Secretary Boyd K. Rutherford said in a letter.

Once the conservation easement is in place, Hackerman would receive a tax break based on the difference in value between the protected land and its worth if it were developed for homes or businesses.

"You value the property before the easement is attached to it, you value it after the easement is attached and the difference is the decline in fair market value, which is available for a tax deduction," said Jim Wilhelm, tax department director of the Hunt Valley accounting firm Stout, Causey & Horning, PA.

With land rapidly appreciating in St. Mary's County, Hackerman's tax break could be sizable. The arrangement is even better for him because he is negotiating to buy the land at what the state paid for it, which is likely much less than it is now worth.

Records with the state Department of Assessments and Taxation show that the Glatfelter Pulp Wood Co. sold most of the parcel, some 783 acres, to a preservation group in April 2003 for $1.24 million. The group, Sustainable Conservation Inc., then sold it to the state in February 2004 for $2.5 million - a doubling of value in 10 months.

The St. Mary's real estate market "has gone bonkers in the past 14 or 18 months," said Del. John L. Bohanan Jr., a Democrat who represents the area and is an aide to U.S. Rep. Steny H. Hoyer. "Prices have just skyrocketed. The things that have gotten most scarce are large undeveloped tracts of land that are developable. It's a good location, it is large untouched property that has potential for a subdivision."

Land for houses is typically sold at $20,000 an acre, he said, compared with the $3,300-an-acre price that Hackerman will be paying.

Bohanan said he is troubled by the transaction and is worried taxpayers aren't getting their money's worth because the state doesn't know how much the property is worth and has not sought competitive bids.

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