Maryland Gov. Robert L. Ehrlich Jr. tried to distance himself yesterday from the growing controversy over the proposed sale of 836 acres of state-protected woodland to a politically connected construction company owner.
Ehrlich (R) said an investigation into the proposal, which could yield more than $6 million in income-tax breaks for a wealthy businessman, is probably warranted.
"Preserving land is a good thing, but when it becomes overtly controversial it needs to be investigated further," Ehrlich said in an interview yesterday. "Obviously [the deal] has been analyzed in the past and now needs to be analyzed further."
Some Maryland lawmakers have questioned the wisdom of a plan to sell the state conservation land in St. Mary's County to Willard Hackerman, president and chief executive of Baltimore-based Whiting-Turner Contracting Co., for $2.5 million -- believed to be well below the land's market value.
The proposal was quietly pushed by Ehrlich's administration over the summer even though the arrangement never guaranteed that Hackerman would follow through on a pledge to donate some of the parcel for schools and leave the rest largely undeveloped.
Ehrlich contacted The Washington Post and the Gazette newspapers yesterday in an effort, he said, to clarify his views about the deal. Last week, General Services Secretary Boyd K. Rutherford testified to a Senate budget committee that the governor had signed off on the land deal.
"I know Boyd said the other day that I was briefed on it, and that clearly happened," Ehrlich said. "But this has not been the subject of any discussions, meetings or anything else. I do not get involved with the details of individual land purchases."
Three times during the interview, Ehrlich noted that the deal has been in the works for several years and that talks began while his Democratic predecessor, Parris N. Glendening, was governor.
"We inherited this," Ehrlich said. "It was negotiated with the Glendening administration."
No one answered calls for comment late yesterday afternoon at Glendening's office with the Smart Growth Leadership Institute.
Even as Ehrlich distanced himself from the deal, state Comptroller William Donald Schaefer (D) defended the proposal during a radio interview, saying it would benefit the state more than it would Hackerman.
"He would get a tax break. That's the only deal he would get," Schaefer said on WBAL radio. "We'd get the money back, so we can buy land elsewhere."
Schaefer and Ehrlich sit on the three-member Board of Public Works, which would ultimately decide on the land deal. But Schaefer said he doubted that the sale would go through, given legislative opposition.
Ehrlich's position, his first direct comments on the proposed sale, signals his concerns about the way the public may react to it. Democratic leaders are decrying the proposal as evidence that a culture of cronyism still permeates activities in Annapolis. Hackerman is a major donor to both political parties.
Rutherford sent a memo to lawmakers in August describing the potential deal with an unnamed "benefactor" who would buy the land and donate 120 acres for schools in St. Mary's County.
Except for the schools, Hackerman would not build on the land, which is in a rural preservation area, and he would have to hold on to development rights for a year to receive tax benefits.
Last week, legislative analyst Warren G. Deschenaux told lawmakers that the state's decision to act as middleman in the property deal was highly unorthodox.
Deschenaux said the land's value and its potential for development could dramatically affect the possible tax benefits if Hackerman donated the development rights. At the low end -- if the land could not be developed -- the buyer could deduct the donation just like any other charitable gift, with a potential savings of more than $700,000 in federal, state and local income taxes.
If the land was worth $20,000 an acre, the potential savings could be $5.6 million in federal taxes and $1.2 million in state and local taxes, Deschenaux said. And a variety of tax programs could benefit the buyer.