Insurance site by State Capitol valued at less than hoped
Land valued for less than expectation
An appraisal released Thursday of state-owned land near the State Capitol concluded the property is worth roughly $2 million less than what the Jindal administration hopes to generate by selling it.
The appraisal, along with a push by some legislators to hold onto the property, threatens to complicate a meeting set for Nov. 9 at the State Capitol.
The Louisiana House Environment and Natural Resources Committee is scheduled to meet jointly with the state Senate Natural Resources Committee to approve the sale.
Senate Natural Resources Committee Chairman Gerald Long, R-Winnfield, said he expects the vote to be delayed.
“This ... is going to be highly contentious,” he said.
The Jindal administration obtained two appraisals for the property because the time for using the first appraisal lapsed. The first, now expired, appraisal valued the property at $4.9 million. The second, by a different company, valued the property at $2.8 million.
Michael DiResto, spokesman for the Division of Administration, said the Jindal administration may seek to update the earlier appraisal or hire an appraiser to resolve the disparities between the two valuations. “We may recommend the committee delay the vote if we decide to obtain the opinion of a review appraiser,” he wrote in an email.
DiResto said the Jindal administration disagrees with the second, lower appraisal.
“It wasn’t conducted as thoroughly and it undervalued the property,” he said.
Further complicating the issue is resistance within the Legislature to selling the property to a private developer.
State Sen. Ed Murray, D-New Orleans, said the state should retain the property for eventual use by the Legislative Auditor’s Office, which currently shares space with the 1st Circuit Court of Appeal.
“It should be (used) for governmental purpose instead of private development,” Murray said.
The property, which comprises 17 lots, is bounded by North Fifth Street, State Capitol Drive, North Sixth Street and Lakeland Drive.
In 1935, Dr. Carl Weiss lived in a cottage on the property, putting him within walking distance of the State Capitol. Former Gov. Huey P. Long’s bodyguards gunned down Weiss after he allegedly fatally shot Long in a corridor at the State Capitol.
The state acquired the property between 1967 and 1971, eventually building office space for the state Insurance Department on the site, which takes up an entire city block.
The Insurance Department later vacated the building, which was imploded in 2003, leaving a two-story parking garage that is used during legislative sessions. Parking lots surrounding the State Capitol are inadequate to accommodate legislative staff, media and lobbyists when the Legislature meets.
For years, the location, which is one of the few remaining open parcels of property surrounding the State Capitol, has been coveted as office space for the Legislative Auditor’s Office and the state Department of Economic Development. The state always lacked the money to construct an office building.
The Jindal administration essentially put a “for sale” sign on the lot this year by proposing to use the expected proceeds from its sale to pay state government expenses. Although the final version of the legislation referring to the sale omitted a price, the administration earlier assumed $5 million would be generated.
An appraisal dated Jan. 17 by Sharon D. Pruitt concluded the property was worth $4.9 million.
State law requires an appraisal to be obtained within six months prior to a sale of state-owned property, making Pruitt’s appraisal unusable.
Cook, Moore and Associates did an appraisal dated Sept. 12 that concluded the property was worth $2.8 million.
The Division of Administration released both appraisals Thursday, more than a week after requests for them were made.
The appraisal by Cook, Moore and Associates noted several possible problems with the property, including:
- The site would have to be filled to a developable grade or a basement would have to be built.
- The lower level of the existing parking garage is below street grade and was known to flood when the Insurance building existed.
- Recent demand is low for business space in the area.
“Such a circumstance is of adverse impact on the marketability of the garage’s lower level for future use. This will be considered in our valuation,” the appraisal stated.