Residents, business leaders and students are up in arms over a suspect land swap-deal involving UL Lafayette's horse farm property.
The old UL Lafayette horse farm may be the only thing of beauty left on Johnston Street. Less than 800 feet of frontage on this cluttered thoroughfare doesn't reveal the site's importance to Lafayette ' 100 acres of pristine prairie land balanced by mature trees that have never been touched by a developer's hand. Its decades-old history as a dairy farm is evident in the deteriorating red barn visible from Johnston Street, and the land later became an equine center for horseback riding courses. While horses haven't roamed the terrain in almost a decade, the university has sporadically used the property in recent years for UL ROTC and CajunBot training.
With the horse farm's historical significance, contribution to the local landscape and value to the university, it's no surprise that local residents, business leaders and students are up in arms over a suspect sale of this community gem.
On Oct. 7, after weeks of silence, university officials finally released some information regarding a real estate deal that involves swapping 36 acres of the 100-acre undeveloped tract on Johnston Street, across from Mel's Diner, for four residential acres on Girard Park Drive. Longtime UL President Ray Authement says he needs acreage closer to the university to expand its nursing school and claims the two properties are equally worth $3.25 million ' an argument no one is buying. The Board of Supervisors for the University of Louisiana System approved the swap on Aug. 26.
The deal, however, is contingent on a rezoning application the university submitted to Lafayette Consolidated Government on Sept. 7; the university is seeking to reclassify the residentially-zoned 36 acre tract to general business, which would allow any type of commerce there.
In a surprising revelation last week, the proposed buyer told The Independent Weekly that no plans for commercially developing the 36-acre site exist, nor has an architect or any other professional planner been consulted. Dan Menard of BRE-ARD LLC, the group that will acquire the horse farm acreage, says he hopes to develop "whatever [general business zoning] will allow ' retail, office, the highest and best use. I certainly won't put any metal buildings like I have in Scott."
Menard says the university's civil engineer, Paul Miers, had suggested that the group have something to present to the Planning & Zoning Commission for its appearance at a meeting scheduled for Oct. 17, but the developer was not prepared to do so. "I don't have any drawings," Menard acknowledges. "Before I spend any money, I want to see if we have a deal."
Late last week, UL asked to postpone the Oct. 17 zoning meeting until Dec. 5, citing an immediate need to instead focus on looming state budget cuts. In a statement, Authement said, "I had every intention of talking with concerned students and landowners surrounding the Johnston Street property, and this delay will allow me to first focus on the budget plan, then meet with these interested parties prior to the rezoning commission meeting."
Authement claims commercial development of the front acres, in addition to a bridge and road the developers will construct for access to the back of the property, will enhance the value of the remaining acreage, which the university plans to retain for an upscale residential community.
But developer Robert Daigle says that is Authement's critical miscalculation. "With no master plan, it's just the opposite," he says. "That buyer can put anything. The list is endless. They could put a hospital with an emergency room. There are an indeterminate number of commercial uses that may be incompatible with a number of residential uses."
In all likelihood, suggests Daigle, the university will be under pressure from local residents to seek a more restrictive business zoning classification, which he says will still fall short of guaranteeing any increase in the value of the rear property.
As more details emerge about the deal, the land swap appears to only benefit a few individuals with longstanding connections to UL; those involved show little concern for financial red flags or the project's potentially far-reaching impact on the Lafayette community.
TOO CLOSE FOR COMFORT
The land exchange transaction is structured so that Menard and his partner in BRE-ARD LLC, former banker Jerry Brents, will buy the Girard Park Drive property from Lafayette attorney James Davidson III, and then exchange it with the university.
While it's uncertain who stands to benefit most from the arrangement, it is clear that the big loser is UL, and the trail of those involved is riddled with potential conflicts of interest.
Brents is member emeritus of the UL Foundation's Board of Trustees, and Davidson was president of the Board of Trustees from 1987-1990 and is still an active member of the board. He also has coached the university's ski team since 1995. Davidson declined comment, and Brents, who is undergoing chemotherapy treatment, could not be reached before press time. Brents worked for the FBI before becoming a banker in Lafayette and most recently owned American Check Cashers, a business he sold to Pennsylvania-based Dollar Financial Group days after DFG went public in January 2005. Authement says Brents has since been looking for potential investments.
Brents and Menard, the former owner of Lafayette Auto Auction and a real estate developer in Scott, have done business together for 25 years, says Menard. Menard is perhaps best known for his influential relationship with former Lafayette City-Parish President Walter Comeaux (the two also did development business together years ago, according to Menard). A popular figure in the former administration, Menard was a member of Comeaux's well-known lunch crowd, often serving as a middleman in the official's political dealings with the local business community.
The seed for the land swap deal was planted more than a year ago, when real estate developer Tommy Vervaeke asked Wayne Denton, director of the University Research Park, about a possible sale of the horse farm property. Says Denton, "Out of the clear blue I got a call from Tommy, who is part owner of the hotel [the Hilton Garden Inn under construction at the University Research Park]." Denton has been overseeing the long-delayed and troubled hotel project for the university ("Breaking the Code," May 11). Menard has other business connections with the majority owner of the hotel, Dr. S.L. Sethi of Canton, Miss. He also says Vervaeke will be the Johnston Street development's real estate agent.
Menard's friendship with Denton dates back more than 20 years, but the university official claims he was unaware of Menard's interest in the horse farm. "I later found out Tommy was working with Dan Menard and Jerry Brents," says Denton, who defends the structure of the deal. "We have done this so correctly. Everything is above board."
At the time Vervaeke approached Denton, Authement was trying to secure a portion of a $5 million pot of state money available to universities seeking property for expansion, saying he hoped to use the money to buy the Davidson site. Though Authement initially turned down Denton's inquiry about a sale, he called back a week later to see if the group would be interested in a swap. University officials, however, never asked Davidson about a property swap for the Johnston Street land.
"The exchange process was very well defined and accepted by the [Board of Supervisors]," says Authement, who contends the board would not favor the sale of state property. "In the past, they have frowned on it," says Authement, who did not ask the board whether he could put the property up for sale ' a move that may have drastically increased the university's return on the horse farm land ' and use the proceeds to buy land closer to campus.
In August, the board approved the exchange of 29.8 acres for four acres on Girard Park, based on the appraisals. The discrepancy between the 36 acres and 29.8 approved by the board is accounted for in six acres that will be returned to the university as part of the transaction.
According to a statement issued to The Independent Weekly by UL System Board spokesman Rusty Jabour, Louisiana law authorizes higher education management boards to engage in real estate transactions, including sales and exchanges, and requires university presidents to submit all proposed real estate dealings to the board for review and approval. In the case of exchanges involving state property, the law does not require requests for bids and public notices; it does, however, prohibit the donation of state property.
Jabour would not comment on whether the board would have allowed Authement to use proceeds from a sale of the horse farm property to buy the Davidson site.
Authement says he did not seek out any other buyers for the land, nor did he attempt to obtain other tracts of land to expand UL's nursing school (he also says the Davidson property may be used for student housing). It's no secret in the real estate community that Our Lady of Lourdes is scouting sites to construct a new hospital campus, yet Authement, who serves on the board of Lafayette General, has not approached OLOL about a potential swap. The university's nursing department works closely with both hospitals.
OLOL Director of Communications Berch Stelly says Lourdes is unaware of the university's plans to expand its nursing school and that it's too soon to talk about the potential relocation of the hospital. "Certainly when and if Our Lady of Lourdes relocates its services to another campus, we would welcome any and all inquiries from parties who might be interested in our [existing] site," Stelly wrote in an e-mail response.
Given past interest in the equine center land, Authement's push for the land swap deal is puzzling. Over the years, numerous developers and business interests, including prominent jewelry manufacturer Matt Stuller, have approached Authement about the property. In fact, the university president says he offered Stuller a first right of refusal, an agreement Stuller does not recall.
"My interest was to be able to purchase it in order to build a Christian school," says Stuller, who has since decided to pursue a location in Youngsville's Sugar Mill Pond. The businessman says he never discussed a price with Authement, who told him he'd prefer a swap.
Stuller isn't offended that a deal was struck without his knowledge because he never tried to locate land for a swap, though he does express some regret. "For that kind of price," he says, "I'd like to go back and do a first right of refusal."
Others, like Girard Park Drive resident Robbie Mahtook, don't understand the university's attraction to Davidson's property. The property is zoned single family residential, and neighbors successfully opposed Davidson's previous attempts to rezone it for commercial use in an effort to sell it. Because UL is a state agency, it is exempt from zoning ordinances and can do whatever it wants with the land, but that won't preclude adjoining neighbors from opposing alternative uses, Mahtook says.
Mahtook, an attorney, says the university could avoid upsetting the apple cart by seeking properties already zoned for commercial use either in the Oil Center area or elsewhere near the campus.
Similarly, residents in neighborhoods adjacent the horse farm are already pining over what they see as the last chance to do something right on Johnston Street, long considered one of the city's biggest eyesores.
Joanie Hill, whose Oakleaf Drive home borders the back end of the property, was never fooled into thinking the land behind her home would remain in its pristine state. She just always imagined heated competition for the land, and Hill was hopeful that factor alone would help ensure a top-quality development. "It's too huge a piece of beautiful land, so I know over the years many people have expressed interest in it. The process should have been a bidding process, and each one should have been accompanied by a plan," she says. "When something is secretive and done this way, just by nature you smell a rat."
In a tongue-in-cheek move, a Web site set up by upset residents who oppose the rezoning, http://new.petitiononline.com/ULL/petition.html, is taking bids on the horse farm; as of late last week, residents were bidding upwards of $4.1 million, and more than 300 residents had posted their signatures to the petition.
At least one city-parish official is keeping a watchful eye out for the proposed development. "My immediate concern is traffic," says City-Parish Councilman Bruce Conque, who was elected two years ago in part because of his "smart growth" platform. The initiative emphasizes meticulous planning to manage and direct a city's growth in a way that minimizes damage to the environment and helps combat sprawl. "How will they access that property?" asks Conque. "What are the plans for roadways, curb cuts? Johnston Street is at a point in its developmental history that it can either be another Kaliste Saloom Road, a vibrant part of this community, or a Cameron Street," he says.
Led by UL renewable resources senior Danica Adams, who last semester lived in one of two small deteriorating homes that sit on the horse farm site, UL students have concerns of their own. "It was the most incredible experience of my life to wake up and be able to look out over that property. There are so many creative, beautiful possibilities for that land; to have it go to the most obvious commercial and residential development is a shame," says Adams, who is angered that students were blindsided by the decision to exchange the property. "What I'm trying to do is get people to start thinking of ways to benefit everyone, not just a few."
The biggest red flag on the land swap deal is the different land valuations on the two parcels. While Davidson's Girard Park property appears to have been appraised at an inflated rate, the appraisal of the prime Johnston Street horse farm acreage seems too low. Both are zoned for residential use, with the Davidson property under the most restrictive zoning classification, R1-A, single family residential.
Located at 537 and 539 Girard Park Drive, the Davidson property includes two home sites and a masonry storage building valued by the appraiser at $846,000. Based on the $3.25 million appraisal, the land and buildings, which Authement says will be kept for faculty housing, are worth $18.20 a square foot, making this acreage among the most costly on the Lafayette real estate market today.
The appraiser values the land alone at $14 a square foot.
"I think my property is valuable," says Mahtook, who purchased his 1.29-acre site in 2000 for $600,000, or $10.68 per square foot (his is one of the property comparables used in the appraisal). "But it's not that valuable."
Commercial land typically sells much higher than residential. Appraiser George Parker, who retired from his appraisal business earlier this year, says he valued Davidson's residential property in December 2003 based on its potential commercial use because of its proximity to Lafayette General Medical Center and the Oil Center. "The logical use for this property is some commercial," says Parker. "The appraisal process, first off, is an opinion, but you have to be logical."
At $18 per square foot, however, Parker gave the Davidson property the benefit of both classifications. (Even River Ranch has yet to sell any commercial land as high as $18 a square foot.)
As of last week, the traffic count at the Davidson property was 7,002, according to city-parish traffic officials, far below the counts at busy commercial addresses throughout the city. The count peaked from 6-7 a.m., with 667 automobiles traveling in front of the residence. Comparative commercial land sales on Ambassador Caffery Parkway, one of the most desirable commercial corridors in town, haven't gotten close to the $18 appraisal of Davidson's property, averaging far less than $14 per square foot in recent years. The site for Chili's, where city traffic officials say 41,025 vehicles were traveling per day last year, sold for $13 a square foot in 2002, with the average of five sales over the past three years just $10.55.
Parker appraised the Davidson site at Authement's request (the university president's office received it in March 2004). UL's Denton claims Davidson refused to negotiate the appraised price of his property.
What Parker doesn't address in his appraisal is the potential negative effect of an industrial operation on the property (see sidebar "Cottage Industry").
Menard says he has not questioned the market value placed on the Davidson site. "Whatever the appraisal is, I agreed to do. It's either that or you don't trade," says Menard. "Everything is ethical and moral and legal, and to be perfectly honest, I'm trying to help the university if I can."
In connection with his efforts to rezone the property for commercial use some years ago, Davidson had hoped to sell it to Lafayette General Medical Center, but the hospital now says it's not interested. "The subject's not been raised with LGMC management for many years," says hospital Chief Operating Officer Donna Landry. "We've not pursued the property in part because we've not had an identified use for that location, and in part because the property is zoned residential and would have required a reclassification that we didn't see worth requesting without a stated purpose."
In contrast with the Davidson valuation, UL's horse farm property is worth at least twice the amount of its $2.12 per square foot appraisal, say local real estate professionals.
Businessman Dickie Breaux finds it hard to comprehend the university's willingness to accept such a low price for the Johnston Street property. Breaux recently offered the UL Foundation $9.50 a square foot for the historical Borden's site downtown, the last remaining Borden's retail shop in the country, which he hopes to preserve. "They came back with something in the neighborhood of $14 a square foot," he says. "But I haven't given up."
Russ Wilson, who conducted the appraisal of the Johnston Street horse farm, says his valuation is based mainly on the current residential zoning classification. Wilson first valued 24 acres in early June and was called back by the university to appraise the remaining property. His says it's a safe bet the front six acres, separated from the back by a concrete coulee, will be successfully rezoned, so he valued them at $6 per square foot. The 18 acres behind the coulee are worth $1.30 per square foot, he says.
Even though the back property is adjacent Red Lerille's Health Club and the upscale Greenbriar, Woodbriar Place and Camelot subdivisions, Wilson cites limited access to and from the back 67.5 acres, which he says are worth $1.03 per square foot, or $45,000 per acre. Wilson eliminated from his calculations about eight acres along the back of the coulee, saying they will be too difficult to market and develop.
"Your highest and best use issue is limited by zoning," Wilson says. "That's a major question. If the zoning could change, the value [of the back 30 acres up for rezoning] would be more."
Though it is banking on the rezoning issue, the university has no plans to increase the sales price if the rezoning is successful. Authement contends the current arrangement is the best agreement he can get. "Some people on the [Board of Supervisors] said, 'How in the hell did you pull this off?'" he says. "In the past I've been offered a certain amount of money for that property, and this far exceeds anything we've talked about. I'm convinced this is a once-in-a-lifetime deal."
But Authement's unwavering commitment to the project is discouraging some community leaders who question his motives and reasoning. They also wonder about the likely damage to the university's longstanding reputation for doing what's right for the community as a whole. Generous university benefactors like oilman Paul Hilliard, who pledged $5 million toward establishing the new lavish University Art Museum, are frustrated.
"My God, I don't understand those evaluations. It's mystifying," says Hilliard. "I can't figure out what's going on in that man's [Authement's] head. This thing doesn't make any sense."
There is much more going on at the Davidson family property than meets the eye.
Tucked behind one of the Davidson residences on Girard Park Drive, which is zoned for single-family residential use, is the headquarters for ASH Industries Inc., a custom injection molding plant owned by Lafayette attorney James Davidson III's son-in-law, A. Hartie Spence Jr. The main facility is a large metal building, but multiple smaller metal buildings and equipment like forklifts are scattered about the rear acreage, which resembles an industrial site. The operation is hidden in front by the home and in back by overgrown shrubbery; the only access is from the parking lot of retail and office buildings off Coolidge Boulevard.
According to the Lafayette telephone directory, Davidson and ASH Industries are both listed at 539 Girard Park Drive. That home and another Davidson family residence at 537 Girard Park Drive are part of the 4.1-acre site UL Lafayette hopes to get in exchange for 36 acres of its horse farm property on Johnston Street.
ASH Industries once used Begneaud's Pharmacy's parking lot for access, says Louise Begneaud Ganucheau, who runs the family business on Coolidge. The wear-and-tear on Begneaud's parking lot from ASH's 18-wheelers came to a halt three years ago after a heated argument over the issue with an ASH employee. "I don't let those big trucks come through here anymore," Ganucheau says. The proprietor believes ASH has since negotiated with another tenant for access.
Several years ago, Davidson attempted to have his property rezoned from its restrictive residential classification to general business, according to zoning officials. When neighbors balked at the rezoning, Davidson withdrew the application.
A number of old office buildings in the Oil Center are still in residentially zoned areas, Womack says.
ASH Industries was incorporated in 1991, according to the Secretary of State's office, long after the city's 1972 zoning ordinance governing land use. If the business set up shop any time after that, it should have requested a rezoning, says Eleanor Bouy, LCG's director of Planning, Zoning & Codes. The company applied for a certificate of occupancy in 1992, she says. "But it's not at that location. It's at 810 S. Buchanan."
The address is Davidson's law office.
"Frankly, [I was] unaware of the business because it is so well hidden," says Lafayette Consolidated Government Zoning Manager Denise Womack, who went to the site with Bouy about a year ago when ASH officials asked whether the business could relocate to a general business zone on Willow Street. (The request was approved by the Zoning Commission last year, but the company still has not moved its operations to Willow Street.) ASH is classified as a retail manufacturing operation, producing plastics that resemble Legos, Bouy says, which is acceptable in a general business zone.
Bouy first visited the property in the 1990s after a resident complained that it was being used to store cabooses for another family business. Bouy says at the time, it was determined that ASH Industries benefited from a state law that enables such businesses in operation more than two years to continue under a "non-conforming use" status. (The law now requires five years of continuous operation.) She says unless ASH has expanded its square footage over the years, it complies with the law. "They couldn't expand a non-conforming use," she says.
Contacted Monday for comment, ASH owner Spence said he was in a meeting and would call back, but did not do so before press time.
Appraiser George Parker was commissioned to do the market valuation of the Davidson property by UL President Ray Authement in December 2003.
The Independent Weekly could find no mention of ASH Industries' operations in Parker's $3.25 million appraisal of the property, with the exception of the following reference to the swimming pool behind one of the residences. "The pool is presently being used in a cooling capacity for a plastics injection business operating in a nearby building. Although the pool systems equipment may require some attention, it nonetheless adds value to the property." ' Leslie Turk