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Associated Press
Indiana Gov. Mitch Daniels announced at an Evansville-area event in May 2010 that work on the Interstate 69 extension was on budget and ahead of schedule.

Did I-69 pace drive up cost?

When the last link of Interstate 69 opens, the missing spoke of a federal highway system will make Indiana – truly – the “Crossroads of America.” But an investigation of land-acquisition costs suggests the state drastically overpaid some property owners, apparently in an effort to rush the project along.

The economic boost the extension promises is attractive, but it’s counterproductive to spend more than is necessary on the 94-mile Evansville-to-Bloomington link when a large portion of the extension remains undone.

The Indianapolis Star examined land-acquisition documents and found the Indiana Department of Transportation offered $7 million for real estate appraised at $3.34 million. One Bloomington property owner was paid $2.41 million for 140 acres appraised at $650,000.

The Star reports that the state, in its rush to secure land, neglected acquisition policies and guidelines designed to ensure taxpayers don’t end up paying too much.

Denise McHenry, who formerly worked as a purchasing agent on the I-69 project, told the Star that the pressure to move the work along had the state “throwing away millions.” She has been suspended from the acquisition program, allegedly for performance issues. McHenry disputes the charges and said she’s been targeted for blowing the whistle on the extravagant payments, which she said are unlike any made in the 20 years she’s worked on INDOT property acquisition deals.

McHenry said she and other property buyers were given as little as two days’ time to research and make offers to property owners. She said the state liaison told them to work quickly.

“He said, word for word, ‘Mitch Daniels wants to drive on it before his term is over – at all costs.’ ”

The cost for land owned by Barry Elkins, a real estate agent, does seem excessive.

He paid former Indiana University basketball coach Bobby Knight $850,000 for about 200 acres near Bloomington in 2006. In July, he sold an easement covering 140 acres of his acquisition to the state for $2.41 million – nearly four times the $658,800 appraisal price. He told a newspaper at the time he bought the land that he did not plan to develop it and knew it figured in the state’s I-69 extension plan.

An INDOT spokesman defended the property deals, noting that the project is under budget.

“There’s nothing simple about acquiring property for a project such as I-69,” Will Wingfield said. “It’s complex, and INDOT is working with people who most often don’t want to sell.”

The Star was able to examine only limited records. Full details of the transactions won’t be known because appraisal records are confidential under Indiana law.

That’s not the case elsewhere. The state of Washington, for example, protects real estate appraisals from disclosure only while the purchase is pending. Once the sale is complete or abandoned, the appraisal must be disclosed upon request.

“In this day and age, when people are cynical about government, why would you want to give people fuel or an argument that’s unnecessary?” asked C. Kurt Zorn, professor of state and local government finance and economics at IU’s School of Public and Environmental Affairs. “This is taxpayer money that’s paying for property, and – what the heck – let us know how much is being paid and hopefully why.”

In the case of the I-69 project, most of the money for the $620 million Evansville-to-Bloomington link comes from the lease of the Indiana Toll Road. Motorists – overwhelmingly from northern Indiana – paying higher tolls as a result of the lease deserve to know the money is being spent wisely in southern Indiana.

If the state spent responsibly to secure land and avoid costly legal proceedings, it should have nothing to hide.