Greater Disclosure Needed for Land Deals

Shouldn’t we know who owns property bought or rented by government?

Keep in mind these are hypothetical situations. I’m sure nothing like this would ever occur. But maybe it would be better to be safe than sorry.

If a person owns a piece of property, his name is on record at the courthouse. If you have a corporation, the names of the principles are available. If it’s an LLC, then there is one name and an address to send the tax bill to. But the list of owners of an LLC is not publicly available.

So what’s the problem?

Suppose a big company plans a major facility in one of our counties. Local political and industrial development leaders know about it ahead of time and sign a confidentiality agreement. An LLC suddenly appears and starts buying up property. The LLC may be a front for the big company, being used so as not to bid up the property. But it could be some of the locals or public officials—or their brothers-in-law—buying up the property to sell to the company at a profit.

Suppose a county decides to put together an industrial park. Or a megasite. Options are secured and a tract is put together by an LLC which then sells it to the state or to an industrial development board. We don’t know if any local politicians or their family members may have had an ownership. Since everything occurs in secret, how would you know? If the state buys a tract from an LLC, who knows who the real owners are?

Across Tennessee, local, state, and federal government agencies rent office space. The total tab is in the millions of dollars. Many of the properties are in the name of LLCs. Do any elected officials have a wife who owns office buildings rented to the government? Do any legislators own offices rented by state departments? Who owns all the post offices, which are a nice secure 20- or 30-year lease that more than pays for the building?

We don’t know. We also don’t know the principles who may have put together the deal and then sold the package (and the lease) for a nice profit.

Perhaps the state needs legislation so that the full ownership of any property being sold or rented to the state or local government be disclosed, regardless of the ownership structure. A list on file at the Secretary of State’s office at least, but preferably on the Internet.

Making land deals and assembling major pieces of property are difficult tasks. It’s like juggling to keep all the properties in play, prevent a holdout, make sure that all the pieces fit. I have no problem with developers doing such deals. They deserve compensation for putting the package together on behalf of a local industrial development entity.

What I’m talking about is piercing the veil of secrecy that surrounds many public projects.

I’m sure most everything is on the up-and-up. But across 95 counties—considering the amount of state, local, and federal office space and the ubiquity of industrial parks—you have to think there may be a few cases that are suspect. Even if there are properties owned by families of public officials, it is not necessarily illegal. But the folks have a right to know about it come election time.

And I haven’t even gotten into road right-of-ways. Who are the principles in an LLC that bought all the land alongside a road months before the state announced plans to four-lane it to the interstate? Who got options on the property before an interstate interchange was announced? Are there any relationships with public officials?

We spend a lot of time and effort having candidates disclose campaign contributions and examining conflicts of interest in legislation. But when it comes to property, there is a giant black hole, from which no light escapes.

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