Your Kentucky Retirement Dollars Just "Laid An Egg", As Agency Sells Property For Half Price.
Retirement systems selling controversial property at a loss
By Jack Brammer
FRANKFORT — The agency that oversees retirement benefits for state and county employees is selling a nearly 2-acre piece of property near its headquarters for less than half the price it paid three years ago.
The Kentucky Retirement Systems bought the property and a former one-story church in 2006 for $752,000 — a price that was $302,000 more than a Frankfort veterinarian had paid less than two months earlier. Now, it’s being sold for about $325,000.
Though the property is only a smidgen of the pension system’s $11.7 billion portfolio, the questionable financial transaction attracted a state police investigation that hasn’t yet been closed and may lead to a lawsuit.
Mike Burnside, executive director of the retirement systems, said he is relieved that the controversial property is being sold.
“Nobody is more glad than I that we are finally putting this behind us. It’s been a long shadow,” Burnside, who became head of the KRS in January 2008, said Tuesday during an interview in his office.
He formerly was with the Cabinet for Health and Family Services and had no role in the initial purchase of the property.
The nine-member KRS board unanimously voted last week to sell the property at 1300 Louisville Road on the west side of Frankfort to the Kentucky State Police.
The $3.2 million sale also includes the “B” office building at nearby Perimeter Park West. The deal, which will combine both properties into one deed, is expected to be finalized by the end of June, Burnside said.
Burnside said the agency has not yet specifically broken down the value of each individual property, but real estate consultant Jonathan Berns had listed the two properties separately for a total of $3.6 million.
The consultant listed the office building at $3.275 million and the church at $325,000.
The Franklin County property valuation administrator’s office puts a $700,000 value on the church. The entire office complex, with three large buildings, is valued at $4.1 million. They house 247 employees.
The sale is “a good deal” for the KRS and state police, Burnside said. When buildings sit vacant, they become a financial burden, he said.
Burnside noted that the church has not been used since the agency purchased it and the office building, which the agency has had “for a number of years,” has stood vacant for about two years. It had been used by the state revenue department before that agency moved offices downtown.
State Police Sgt. David Jude said state police could not discuss specific use of the properties, “since we’re in the final negotiations state of the purchase.” But Jude said Commissioner Rodney Brewer has noted that the state police have a $6.1 million allotment to build or buy property to use for the consolidation of records.
A lingering problem for the KRS board is its insurance claim for more than $600,000 regarding the church property.
In October 2006, the KRS contended in the insurance claim that two former officers, chief operating officer Gordon Mullis Jr. and chief investment officer John R. Krimmel, breached their fiduciary duties in the agency’s purchase of the church property.
Mullis and Krimmel resigned their posts on May 10, 2006, and have previously declined to comment about the issue.
By Jack Brammer
FRANKFORT — The agency that oversees retirement benefits for state and county employees is selling a nearly 2-acre piece of property near its headquarters for less than half the price it paid three years ago.
The Kentucky Retirement Systems bought the property and a former one-story church in 2006 for $752,000 — a price that was $302,000 more than a Frankfort veterinarian had paid less than two months earlier. Now, it’s being sold for about $325,000.
Though the property is only a smidgen of the pension system’s $11.7 billion portfolio, the questionable financial transaction attracted a state police investigation that hasn’t yet been closed and may lead to a lawsuit.
Mike Burnside, executive director of the retirement systems, said he is relieved that the controversial property is being sold.
“Nobody is more glad than I that we are finally putting this behind us. It’s been a long shadow,” Burnside, who became head of the KRS in January 2008, said Tuesday during an interview in his office.
He formerly was with the Cabinet for Health and Family Services and had no role in the initial purchase of the property.
The nine-member KRS board unanimously voted last week to sell the property at 1300 Louisville Road on the west side of Frankfort to the Kentucky State Police.
The $3.2 million sale also includes the “B” office building at nearby Perimeter Park West. The deal, which will combine both properties into one deed, is expected to be finalized by the end of June, Burnside said.
Burnside said the agency has not yet specifically broken down the value of each individual property, but real estate consultant Jonathan Berns had listed the two properties separately for a total of $3.6 million.
The consultant listed the office building at $3.275 million and the church at $325,000.
The Franklin County property valuation administrator’s office puts a $700,000 value on the church. The entire office complex, with three large buildings, is valued at $4.1 million. They house 247 employees.
The sale is “a good deal” for the KRS and state police, Burnside said. When buildings sit vacant, they become a financial burden, he said.
Burnside noted that the church has not been used since the agency purchased it and the office building, which the agency has had “for a number of years,” has stood vacant for about two years. It had been used by the state revenue department before that agency moved offices downtown.
State Police Sgt. David Jude said state police could not discuss specific use of the properties, “since we’re in the final negotiations state of the purchase.” But Jude said Commissioner Rodney Brewer has noted that the state police have a $6.1 million allotment to build or buy property to use for the consolidation of records.
A lingering problem for the KRS board is its insurance claim for more than $600,000 regarding the church property.
In October 2006, the KRS contended in the insurance claim that two former officers, chief operating officer Gordon Mullis Jr. and chief investment officer John R. Krimmel, breached their fiduciary duties in the agency’s purchase of the church property.
Mullis and Krimmel resigned their posts on May 10, 2006, and have previously declined to comment about the issue.
Labels: General information, Keeping them honest
posted by KYJurisDoctor at 9:09 PM
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