When the S.C. Department of Agriculture spent about $6 million to buy land for the State Farmers Market in Lexington County in 2013, the agency relied on just one appraisal that was based in part on unverified information from the seller, according to a report released this week.
The seller, State Ports Authority Board Chairman Bill Stern, had bought 26 acres in Lexington County in 2010 for $1.57 million. Three years later, he sold 9.73 acres of that property to the Agriculture Department for about $6.07 million, according to a report from the Legislative Audit Council.
The appraisal said the land was worth the higher price because several improvements had been made, including the construction of a 31,000-square-foot multi-tenant building and two produce sheds with a total of 59,000 square feet of space.
The Audit Council report said Stern earned $4.5 million in profit from the sale. But he disputes that, saying he invested in improvements to the land. “They are not understanding that all of the improvements done out there were done by us,” said Stern, a Columbia developer.
“We built a lot of buildings and created a lot of value,” he said.
Also in 2013, the Agriculture Department purchased a gatehouse and .08 acre of land at the Farmers Market from Stern for $980,126, the audit report said.
The value of both properties was determined in part on the potential income from the property, according to the Audit Council report. For the 9.73 acres, the appraiser considered income from sheds rented to produce sellers and on leases for the vendor building. That information was provided by Stern.
The audit recommended that when purchasing property, the Agriculture Department consider using two appraisals that include reviews of written financial statements.
In its written response to the audit, the Agriculture Department pointed to improvements made to the land and to the anticipated income. “The state purchased property with improvements completed and an established income stream; the seller only bought acreage,” the department said.
“To make this comparison and an implication of a 300 percent profit indicates a lack of comprehension of a return on a business investment.”
The audit report also said Stern had donated $3,500 to S.C. Agriculture Commissioner Hugh Weathers’ campaign in 2010. The donation was not reported to the Joint Bond Review Committee or the state Budget and Control Board before the purchase was approved, the report said. However, information about the donation was available on the State Ethics Commission website.
While no laws were broken and “we could find no information that this donation impacted the purchase of the land,” such information should be publicly disclosed before the Bond Review Committee in the future, the audit report said. Such disclosure “will contribute to a more transparent vetting process.”
Stern said he has been making political donations for years. “I give to a lot of candidates,” he said.
The State Farmers Market moved from Bluff Road in Richland County to West Columbia in Lexington County in 2010.