State buys Scott wildlife recreation area from big political donor

Fish and wildlife gives Stanford banker's firm $255,000 profit on acreage

jcheves@herald-leader.comDecember 19, 2011 

GEORGETOWN — The Kentucky Department of Fish and Wildlife Resources paid $6.24 million this month to a company co-owned by one of the state's biggest political donors to buy a piece of undeveloped land in Scott County.

The deal was initiated about four years ago by the seller, RLF Lexington Properties, co-owned by Stanford banker Jesse Correll. Correll has, along with his wife and parents, given nearly $900,000 in political donations since 1998 — mostly to Republicans but also to several Democrats, and more than $30,000 to the Kentucky Democratic Party.

The Corrells gave at least $67,000 to campaigns and funds for former Republican Gov. Ernie Fletcher, who was in office and naming the bipartisan, nine-member Fish and Wildlife Resources Commission in 2007, when RLF bought the Scott County land. Fish and Wildlife Commissioner Jonathan Gassett, who answers to the appointed board and runs the agency on a daily basis, was hired under Fletcher in 2005 and remains today.

Correll created RLF in 2007 to buy, for investment purposes, 3,127 acres of rolling pasture land and woods on Rogers Gap Road north of Georgetown, according to public records. It paid $7.5 million, or $2,398 an acre.

On Dec. 7, Fish and Wildlife bought 2,497 acres of that tract from RLF for the higher price of $2,500 an acre.

It will be opened to the public sometime next year as a "wildlife management area," one of 94 the department owns around the state, Gassett said Friday. Hunting, fishing and hiking will be allowed on the property under governing rules now being developed, Gassett said.

Correll's company approached Fish and Wildlife about four years ago to suggest the sale, Gassett said. The agency needed several years to weigh it against other pending land purchases, arrange for funding and get the requisite appraisals and approvals, he said.

Gassett said he does not know Correll personally, and the banker's political ties in Frankfort did not influence the deal.

"Bottom line is, we buy property according to our strategic plan and our needs, and it doesn't really matter to us who owns it," Gassett said.

Correll, president and chairman of First Southern Bancorp, which owns First Southern National Bank, did not return repeated phone calls seeking comment for this story.

Joe Martin, land manager for Correll's bank, took part in sale discussions with Fish and Wildlife. Martin deferred queries to Correll in a brief interview Friday. Martin ended the interview, saying he was offended by questions about his relationships with past and current appointees to the Fish and Wildlife Resources Commission, whom he knows through his participation in outdoorsman groups, including the Rocky Mountain Elk Foundation.

"I know several members of the commission," Martin said. "I don't see where there's a story there."

Buying more land

The General Assembly is curious about all the land being bought by Fish and Wildlife, said state Rep. Bob Damron, D-Nicholasville.

Damron and others on the legislature's Capital Projects and Bond Oversight Committee quizzed agency officials at a hearing in October, during which the Scott County land deal was unveiled. One of Gassett's aides told Damron that the agency owns as much as 145,000 acres across Kentucky and hopes to buy more, both to protect rural land from development and to provide outdoor recreation for Kentuckians.

The department is unique in that it answers to a board that meets four times a year, not to a cabinet secretary or the governor, so it's largely autonomous, Damron said Friday.

"They just bought another huge tract of land the month before in Union County, and now they're buying this," Damron said. "It makes you wonder how they have all this money burning a hole in their pocket. And also, what's the cost to other taxpayers in these communities when millions of dollars in private land suddenly is taken off the property-tax rolls? Once the state buys it, there's no more taxes paid on it."

In response, Gassett said Friday that the Scott County land was worth only about $6,000 a year in property taxes because of agricultural exemptions claimed by RLF. Scott County can expect far greater revenue from visitors to the new wildlife-management area, Gassett said.

"We provide more economic impact from local access than from what comes off the tax rolls," he said. "There's a whole lot of benefit to having that property open."

From owner to owner

The Scott County property was purchased in 1980 as an investment by Beluga Inc., a New York City firm, public records show.

Fish and Wildlife first considered buying it in 2002 or 2003, Gassett said. It's attractive because few large tracts of undeveloped land remain between Cincinnati and Lexington, where many Kentuckians live, he said.

However, someone at the department spoke to a real estate agent for Beluga and was quoted an unaffordable price, Gassett said.

"That was the end of that," he said.

George Pavia, Beluga's vice president and attorney, said in a recent interview that state officials never approached him about buying the land. But RLF did. With Pavia signing the deed, Beluga sold it to RLF in 2007.

Of the tract's original 3,127 acres, RLF sold about 500 acres last year to a neighboring private landfill company. It's holding onto 100 acres.

Greg Johnson of Georgetown leased the property for private hunting for 17 years, first from Beluga and then from RLF. Johnson said Martin, the land manager at Correll's bank, introduced himself in 2007 and said RLF planned to sell the land quickly to Fish and Wildlife during the Fletcher administration. However, RLF couldn't close the deal before Fletcher lost re-election later that year, Johnson said.

"That was their plan as soon as they bought it, or so they told us," Johnson said. "They had really good ties with Governor Fletcher. But when (Democratic Gov. Steve) Beshear came in, it complicated things for a while."

Fish and Wildlife paid RLF with money from its Wetland and Stream Mitigation Fund and federal grants. As a condition for using that money, Gassett said, the agency is committed to restore several streams on the property, some of which are dry creek beds that flow only after a rainfall or snowmelt.

Kentucky spent nearly $255,000 more for the land on a per-acre basis than RLF did. But two appraisals obtained by Fish and Wildlife put the land's value at $6.24 million and $6.5 million, making the final price of $6.24 million a fair one, Gassett said.

Correll's partner in RLF is Resource Land Holdings, which runs multi-million-dollar real estate investment funds in Colorado Springs, Colo. James Geisz, a partner with the firm, signed the deed for the Scott County land when RLF bought it, but he declined to comment on the property in a brief interview.

"I probably ought to defer to Jess Correll," Geisz said. "We looked at this land in 2007 with Jess Correll. It was his idea."

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