Land deal that raised ethical questions approved

May 01, 2008|By Gadi Dechter | Gadi Dechter,SUN REPORTER

The state Board of Public Works approved yesterday the purchase by St. Mary's College of Maryland of 34 acres of undeveloped land from a member of the state college's board of trustees, over Comptroller Peter Franchot's objections.

Franchot initially praised the liberal arts college's handling of the ethically tricky transaction but then changed course when Treasurer Nancy K. Kopp brought up an article in the St. Mary's Today newspaper criticizing the $800,000 sale as a "land scam" and likened it to a "sweetheart deal" for developer Michael P. O'Brien.

"I wish I'd seen this article," Franchot said. "I would like to postpone this for a couple of weeks, just so we can look at it more."

But the two other board members, Kopp and Lt. Gov. Anthony G. Brown -- who was filling in for Gov. Martin O'Malley -- voted to approve the sale after St. Mary's College officials warned that the sale offer was good only until May 3. Campus officials said O'Brien was selling the land, which is adjacent to the campus, at a "bargain" price and that the purchase was necessary to stave off commercial development.

"We worry about the risk that this ... falls into developers' hands," said Chip Jackson, the college's associate vice president of facilities.

The Board of Public Works, which approves state land and capital construction deals, had already deferred consideration of the land deal once to study potential conflicts of interest.

O'Brien, a Southern Maryland developer and real estate brokerage owner, bought the two parcels in 2004 for about $415,000, before he became a college trustee, St. Mary's College officials said. In an interview several weeks ago, he said he intended to build homes on the land but agreed to sell it after the college raised objections.

College administrators said yesterday that they have no plans to develop the land. To avoid ethical problems, the college asked the attorney general's office to handle the land's appraisal and consulted the State Ethics Commission, officials said.

O'Brien recused himself from all trustee discussions of the land sale, he told The Sun, and said he was selling it for less than it was worth to help out his alma mater.

He did not respond to requests for comment yesterday.

Assistant Attorney General Alexander C. Short, a transactions specialist who handled the property valuation, told the board that the most recent appraisal of $860,000, conducted in February, takes into account deteriorating real estate market conditions.

"I do think $800,000 ... sounds like a reasonable price," Kopp said, but asked the university to prepare a response to "factual allegations" in the St. Mary's Today story.

Salvatore M. Meringolo, the college's vice president for development, dismissed the allegations, but Franchot said the matter deserved further investigation.

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