Land report

231 Pages·2011·5.26 MB·English

I I R O
NDEPENDENT NVESTIGATION EPORT F
G C S B ’
THE WINNETT OUNTY CHOOL OARD S
L A P
AND CQUISITION RACTICES
- 1999 2009 -
THROUGH
P O : J 21, 2011
RESENTED N ULY
Greenberg Traurig LLP - Appointed by the Gwinnett County School Board
INDEPENDENT INVESTIGATION REPORT OF
THE GWINNETT COUNTY SCHOOL BOARD’S
LAND ACQUISITION PRACTICES
- 1999 THROUGH 2009 -
FINDINGS AND RECOMMENDATIONS
Reported By:
JOED.WHITLEY,ESQ.
GREENBERGTRAURIGLLP
3290 Northside Parkway, Suite 400
Atlanta, Georgia 30327
[phone]
Appointed by the Gwinnett County
School Board
DATED: July 21, 2011
TABLE OF CONTENTS
INTRODUCTION........................................................................................................1
EXECUTIVE SUMMARY: FINDINGS AND RECOMMENDATIONS................3
I. Background .........................................................................................................3
II. Findings...............................................................................................................7
A. Process-Wide Findings.............................................................................9
B. Specific Findings....................................................................................12
III. Recommendations.............................................................................................16
A. Policy Recommendations........................................................................17
B. Procedural Recommendations...............................................................21
INVESTIGATIVE FINDINGS.................................................................................25
IV. The Impact of Gwinnett County’s Population Growth on Its School
System...............................................................................................................25
A. The Land Needed for the GCPS’s Future School Sites, Listed on
a Public Document Referred to as “The Plan,” Was Generally
Purchased Prior to The Plan’s Publication...........................................27
B. The F&O Department’s Land Purchasing Activities............................30
V. The Operational Environment for the Land Acquisition Process...................38
A. Evaluation of the Land Acquisition Process.........................................39
B. The Education Planning Department as a Check on Land
Purchases................................................................................................41
C. The Protection of Confidential Land Purchase Information................42
D. The GCSB’s Conditions for Delegating Purchasing Authority ............43
E. GDOE Approval......................................................................................47
F. The GCSB’s Appraisal Policy.................................................................48
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G. The GCPS was Competing with Developers Not Bound by the
Same Market-Place Rules for a Limited Number of Large
Parcels.....................................................................................................50
VI. The 16 Highlighted GCPS Land Purchases.....................................................52
A. Transaction #1: Archer Cluster Middle School....................................52
B. Transaction #2: Archer High School/Archer Cluster Elementary
School (Condemnation)..........................................................................55
C. Transaction #3: Benefield Elementary School Replacement
(Condemnation)......................................................................................59
D. Transaction #4: Berkmar/Central Cluster High School......................63
E. Transaction #5: Burnette Elementary School......................................66
F. Transaction #6: Dyer Elementary School Replacement......................69
G. Transaction #7: Ferguson Elementary School (Berkmar Cluster
Elementary School)................................................................................72
H. Transaction #8: The ISC Building........................................................76
I. Transaction #9: Mountain View Cluster Middle School......................79
J. Transaction #10: North Gwinnett Middle School................................81
K. Transaction #11: Peachtree Ridge Cluster Middle School &
Peachtree-Ridge Cluster Elementary School (“Panasonic
Building”)................................................................................................85
L. Transaction #12: Puckett’s Mill Elementary School............................88
M. Transaction #13: Shiloh Cluster Middle School Property...................91
N. Transaction #14: Snell Elementary School (n/k/a Anderson-
Livsey Elementary School).....................................................................94
O. Transaction #15: Upper Mill Creek Cluster High School....................97
P. Transaction #16: White Oaks Elementary School and Lanier
Middle School Replacement.................................................................100
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VII. Land Purchases of Near-by School Boards During the 2000s Supports
the Investigation Team’s Conclusion that No Illegality Occurred in the
95 GCPS Land Transactions..........................................................................103
A. Cherokee County School Board: 61% Gross Profit for the Seller.....104
B. Forsyth County School Board: 53% Gross Profit for the Seller........105
C. Forsyth County School Board: 81% Gross Profit for the Seller........106
VIII. Purchasing Practices of Nearby School Boards.............................................107
A. Cherokee County School District.........................................................108
B. Cobb County School District................................................................109
C. Forsyth County School System............................................................111
D. Fulton County School System..............................................................112
E. Henry County School System..............................................................114
CONCLUSION.........................................................................................................115
IX. Strategic Recommendations...........................................................................115
X. Acquisition Recommendations .......................................................................116
APPENDICES
TAB A: UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL
PRACTICE AND ADVISORY OPINIONS (USPAP) 2005 EDITION.........A
TAB B: GCPS’s SITE ACQUISITION POLICY.........................................................B
TAB C: REAL ESTATE INDICATORS 2001-2010....................................................C
TAB D: 2002 EDUCATION SPLOST BUILDING PROGRAM................................ D
TAB E: 2007-2012 “THE PLAN”.................................................................................E
TAB F: GDOE GUIDELINE FOR EDUCATIONAL FACILITY SITE
SELECTION..................................................................................................F
TAB G: GDOE GUIDELINE FOR RISK HAZARD ASSESSMENT OF
EDUCATIONAL FACILITY SITES ............................................................ G
TAB H: LAND ACQUISITION PROCESSES...........................................................H
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TAB I: 16 HIGHLIGHTED LAND TRANSACTIONS................................................I
TAB J: COMPARISON OF GCPS - LAND/DEVELOPMENT COSTS AND
DEVELOPERS - TYPICAL COST TARGETS..............................................J
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INTRODUCTION
Over the last two-plus months, I have been honored to lead and conduct an
independent investigation into the land-acquisition practices of the Gwinnett
County Public Schools (“GCPS”) to find if any major problems occurred during the
GCPS’s land purchases or in the process itself from March 1999 to 2009. My
mission was a simple one: follow the facts wherever they may lead.
The investigation was staffed with a team of committed, talented, and
objective colleagues whose backgrounds are in law enforcement, the real estate
industry, and land appraisals. We were persistent and thorough in our review of
huge stores of data, documents, and files, and in our efforts to secure the most
complete recollections of the many people involved in the GCPS’s land acquisitions
from 1999-2009. What we found specifically is set out in the report that follows this
Introduction. Before stating those findings in greater detail, however, I briefly
wanted to touch on what we found generally with respect to the GCPS land-
acquisition process.
Developing the foundation for the report was made easier by the GCPS’s
commitment to openness, desire to learn what happened, and willingness to
improve its land-acquisition practices going forward. We were given total and
complete access to the Members of the Gwinnett County School Board (“GCSB”), the
Superintendent, and all department heads and their staff members, as well as
internal documents and data. Nothing we asked for was denied to us, and we asked
for a good bit.
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The available information proved no major problems in the land acquisitions,
such as criminal or unethical conduct. We did find areas, however, that should be
reevaluated for improvement and change. Nonetheless, all things considered, the
leadership in the various departments within the GCPS, in particular, in the
Facilities & Operations and the Educational Planning Departments, is to be
commended for the GCPS’s response to the extraordinarily rapid growth in the
Gwinnett County School student population during the 10-year time period we
reviewed.
This report is intended to offer a candid assessment of what we found with
respect to land acquisitions by the GCPS from 1999-2009. We recommend going
forward that aspects of both the land-acquisition policies and procedures be
considered for revision by the GCSB and the Superintendent. The
recommendations are calculated to eliminate the potential for the appearance of
impropriety and to prevent any person or entity from gaining unfair commercial or
illegal advantage that would cause the taxpayers of Gwinnett County to pay
anything but a fair price for land acquisitions in the years ahead.
Joe D. Whitley
July 21, 2011
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EXECUTIVE SUMMARY:
FINDINGS AND RECOMMENDATIONS
I. Background
This independent internal investigation (the “investigation”) was ordered by
the Gwinnett County School Board (“GCSB”) and Superintendent J. Alvin
Wilbanks, in consultation with the GCSB’s outside counsel, Thompson & Sweeny,
P.C., after intimations of possible impropriety with respect to eight of the GCSB’s
school-site land purchases during the 2000s. The transactions were identified in a
series of news reports in the Atlanta Journal-Constitution (“AJC”) and elsewhere,
as well as Open Records Act requests.
The GCSB and the Superintendent appointed attorney Joe D. Whitley1 of
Greenberg Traurig LLP to conduct an independent investigation focused on all 95
land-purchases for school sites from 1999-2009. Mr. Whitley’s charge was to
investigate whether any GCSB or Gwinnett County Public School (“GCPS”)
personnel engaged in any illegality or impropriety in connection with the specific
land purchases. The scope included whether the GCSB and the GCPS personnel
comported with the GCSB’s established policies or practices and any applicable
Georgia laws regarding the specific land transactions during the March 1999-April
1 Mr. Whitley previously served as the Acting Associate Attorney General of the
United States under the President George H.W. Bush administration. He also
served as the United States Attorney in the Middle (Macon) and Northern (Atlanta)
Districts of Georgia, by Presidential appointment during the Reagan and Bush-41
Administrations. More recently, Mr. Whitley, upon appointment by President
George W. Bush, served as the United States Department of Homeland Security’s
first General Counsel, the Department’s highest ranking legal official. Mr. Whitley
currently is a Shareholder at Greenberg Traurig LLP in the firm’s Atlanta and
Washington, D.C. offices and is Chair of the firm’s Atlanta White Collar Practice.
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2009 time frame, and whether the GCSB and the GCPS personnel, as well as
outside contractors, engaged in any otherwise questionable activities with respect to
the subject land purchases during that same period.2 Mr. Whitley’s duties also
included reporting his findings and making recommendations for the GCSB’s
conduct of future land purchases.3
Mr. Whitley and his investigation team4 reviewed hundreds of thousands of
pages of relevant documents and gathered information for the relevant period from
numerous current and former GCPS personnel and others involved in the subject
land purchases — including developers, land speculators, individual land owners,
and appraisers. Specifically, the investigation team interviewed 53 individuals,
some more than once, concerning their knowledge of the GCPS’s land-acquisition
2 The investigation’s temporal and transactional focus, coupled with the
investigation team’s charge, set clear markers for the scope of the data and
documents needed and the witnesses sought. The investigation team thus leveled
its aim at all the available documentary and oral evidence that might shed light on
the events surrounding the GCPS’s land purchases from March 1999 to April 2009.
Accordingly, given the focus, the investigation team did not engage in a roving
inquiry into every action of all the GCPS leadership and staff during this time
frame except insofar as those actions may have impacted the subject land
purchases.
3 The report and recommendations will be made solely to the GCSB and the
Superintendent in their official capacities.
4 The investigation team, in addition to Mr. Whitley, included a former federal
prosecutor and the services, at various times, of several former FBI agents.
Collectively, the former prosecutor and agents have more than 100 years of
experience investigating and prosecuting public corruption, bribery, real-estate
fraud, and economic crimes, plus extensive experience doing internal corporate and
governmental investigations. The investigation team also included two attorneys
with more than 15 years experience in internal investigations and complex
litigation, as well as the services of several experts in the areas of appraisals, land-
sales data, market analysis, and complex real estate transactions.
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