BATON ROUGE, LA (WAFB) - The Louisiana Legislative Auditor launched an investigation Tuesday morning into the City-Parish of East Baton Rouge for its questionably underpriced 2016 auction of a 50,000 square foot lot on the corner of Jefferson Hwy. and Bluebonnet Blvd.
The man who obtained the land got it for just $10,000. Some say the property is worth many times that amount.
A slightly larger corner site directly across the street was sold in 2016 for nearly $1 million. A bank is currently being built on that piece of land.
"The first I heard of it was yesterday," Legislative Auditor Daryl Purpera told 9News on Tuesday. "I have informed the mayor this morning that we are going to look further into these sales."
The sale was completed in February after the city-parish declared the land surplus property. However, the city-parish failed to get an appraisal of the corner lot and failed to set a reserve price when it auctioned off the land late last year.
Notice for the auction of the corner lot at Bluebonnet and Jefferson ran in the Advocate on November 21, 28, and December 5, 2016.
BusinessReport.com, an online business publication that caters to the Baton Rouge area, broke the story Monday, questioning former Metro Councilman Ryan Heck about his help in making declaring the property as surplus and thus eligible for sale.
According to that article, Developer Radu Cosman was the only person who showed up for the auction and bought the land for his single bid of $10,000.
Heck told BusinessReport.com that there was nothing improper about the sale and that the auction was publicized well in advance.
Nevertheless, the Legislative Auditor said state law dictates a municipality cannot sell property at a discount from its fair-market value.
"From my read of the law, you can't sell property lower than the fair market value," Pupera said. "And if you are going to sell it below what is established as a fair-market value, then you have to document why you're doing that."
Furthermore, Purpera said, the Louisiana Constitution states a public entity cannot donate public property.
"So, let's say a $10,000 piece of property is worth $20,000," he said. "Well, then that's a donation of $10,000. You can't do it. It's not constitutional."
The 9News Investigators obtained internal emails from the parish attorney's office indicating Cosman was the winning bidder on another piece of public land on Bluebonnet Blvd. a few years ago.
Cosman and one other person, David Bowman, were apparently the only two bidders at the auction in late 2013. In that auction, Cosman walked away with the 22,000 square foot lot for $50,000.
In one of the emails, Parish Attorney Lee Anne Batson said an appraisal was done on that property and that they provided all of the information to the Legislative Auditor. The appraisal valued the lot at $255,000.
Below is the city council's approval of the sale of the lot on Jefferson and Bluebonnet for $10,000: