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November 13, 2012

INDOT officials overpaid for some I-69 parcels

INDIANAPOLIS — Indiana state highway officials significantly overpaid for parcels of land in the Interstate 69 corridor, according to a newspaper investigation.

INDOT said this summer that $162.6 million in state and federal funds were spent on right-of-way purchases for the 94-mile stretch of interstate.

The Indianapolis Star  reported Saturday it obtained confidential documents about the appraised values and the Indiana Department of Transportation’s final offers for more than 30 properties. The newspaper found that INDOT offered $7 million for land worth a total of $3.34 million.

According to the Star, two of those properties were in Daviess County, but no names were released in the original story.

 There were also properties in Greene and Pike counties.

INDOT spokesman Will Wingfield wouldn’t comment on specific purchases because the appraisal documents are confidential under state law. But he said the state sometimes has to shell out more than the appraised value to encourage land owners to sell.

“There’s nothing simple about acquiring property for a project such as I-69,” Wingfield said.

“It’s complex, and INDOT is working with people who most often don’t want to sell. Sometimes INDOT is criticized for paying too much for property, and often INDOT is criticized for offering too little.”

Aaron Smith, a taxpayer advocate, looked at some of the documents the Star had obtained.

“There are procedures established in state laws for right-of-way land purchases, things that are tried and true that provide a fair value for everybody involved,” he told the newspaper. “It looks like those procedures were at least sometimes not followed.”

Wingfield, though, said, “INDOT followed its typical practice for researching properties and making offers under the federal ‘Uniform Act.’ “

According to INDOT’s property acquisition guidelines, buyers are to make offers that are close to fair market value for properties.

But Denise McHenry, a former purchasing agent for the state on the I-69 project, told the newspaper, “There was no justification (for some payouts). They were throwing away millions.”

McHenry was suspended from the INDOT acquisition program earlier this year.

She is appealing the suspension, and says that the allegations of performance issues are untrue and are retribution for being a whistle blower.

Gov. Mitch Daniels’ spokeswoman Jane Jankowski declined to comment to the newspaper.

“Property purchases for road projects,” she said in an email, “are handled by INDOT.”

Landowner Barry Elkins paid $850,000 for about 200 acres in Monroe County owned by former Indiana University basketball coach Bob Knight. State highway officials in July paid Elkins $2.41 million for an easement covering 140 of the 200 acres. State appraisers said the easement was worth $658,000.

He also sold two other properties to the state.

Wingfield told the newspaper that the property payments have not caused the state to surpass its budget, saying the interstate project is 25 percent under estimates.

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