LCG sues appraiser for overpayment of spoil banks land

More than a year after paying too much for land involved in a controversial levee removal project, Lafayette is now blaming the appraiser. 

LCG filed suit against Jake LaCour and his company Icon Valuation Group last week, just as the Guillory administration defended the project and others in response to a scathing audit.

LCG claims LaCour’s “negligence” and “apparently erroneous” appraisal report caused the local government to pay far in excess of the full-appraised value of the land. LCG paid $84,000 to acquire two-thirds of land that LaCour had valued in total at $42,000.

At that same time, LCG has defended that overpayment, first reported in June 2022 by The Current, by saying it accounted for the cost of an expropriation lawsuit should LCG be forced to seize the land. The overpayment and the authorization of the land acquisition also came under scrutiny in LCG’s annual financial audit. 

“Recently, the accuracy of LaCour’s Appraisal Report and representations have been called into question,” Assistant City-Parish Attorney James Gibson wrote in the lawsuit. 

The land in question was purchased in St. Martin Parish to knock down a spoil bank levee along Bayou Vermilion in a secretive, overnight operation. 

LCG’s own auditors affirmed the overpayment in their most recent audit. The annual audit, released earlier this month, flagged more than two dozen other problems, among which was that LCG lacked council authority to buy the St. Martin Parish land, which would amount to a violation of its charter. Auditors also believe — as does one of LCG’s own attorneys — the awarding of the project violated the state’s public bid law. 

Under statutory law and the state constitution, a political subdivision cannot pay a price that exceeds the appraised value; doing so may amount to an illegal donation of public funds, according to an attorney general’s opinion. 

LCG is suing LaCour for damages, including the overpayment.

Gibson, LCG’s lawyer, did not respond to a request for comment. 

Mayor-President Josh Guillory himself alluded to alleged “problems” with the appraisal in a radio interview in mid-January. 

Central to the dispute is that the price LCG paid did not include the entire parcel. Ownership in the 41 acres was equally divided among three families: one family of those willing to sell was represented by District Judge David Blanchet and the other by attorney Jerry Guilliot. LCG ended up buying only a two-thirds interest to execute the spoil banks project, excluding the remaining owner, Lafayette homebuilder Edward Francez, from the transaction. Francez has since filed suit against LCG for damages; the project itself has led to multiple legal actions between St. Martin Parish and LCG, as well as state and federal investigations into LCG’s actions. 

Typically, in real estate transactions like this, the sale price of a parcel is discounted if the transaction does not include the entire tract. That reduced price is called a “minority discount.” In July 2021, LaCour issued two appraisal reports, one for the full tract and a second that accounted for a discount of 25 percent.

LCG, however, ended up paying a full $42,000 to each of Francez’s relatives, a total of $84,000 or $3,000 per acre, which would make the total value of the tract $126,000. Key to LaCour’s defense may be the fact that the $126,000 figure does not appear anywhere in his appraisals.  

LCG made the decision to forgo the minority discount, claiming in an email obtained by The Current that local government would eventually buy Francez’s interest. At that point, however, LCG had not yet approached Francez about selling.  

At the heart of LCG’s claim is a confusing email City-Parish Attorney Greg Logan received from appraiser LaCour over how such a discount would be applied if a property owner were left out of the transaction. But LaCour’s email raised more questions than it answered. 

At the very least, local licensed appraisers interviewed for this story tell The Current, Logan should have followed up with an email or phone call for clarification, with one appraiser contending LCG likely missed an important step that would have eliminated any confusion. 

“There should have been a review by another independent appraiser, especially if there were state or federal funds being contemplated for any part of this project,” says the Lafayette-based appraiser, speaking on condition of anonymity. Citing a lack of documentation, the state has refused to release to LCG the $1.5 million in capital outlay dollars the councils were told they would receive for the spoil banks project. 

Despite the confusion over any potential discount, local appraisers believe what LaCour has going for his defense is his original July 2021 appraisal report, in which he clearly valued the 41 acres on the river at $42,000, roughly $1,000 per acre. LCG paid far more than that.

Read Jake LaCour’s initial appraisal here and the revised appraisal showing the minority discount here.

In its response to its auditors, and subsequently the City and Parish councils, LCG offered varying explanations for the overpayment, saying it did not have to apply the discount because it was buying a majority interest and claimed that expropriating the land would have been more costly. To expropriate land outside of Lafayette Parish, LCG would have needed permission from St. Martin Parish, which did not support the project.  

Their argument appears to largely rest on that single August 2021 email LaCour sent to City-Parish Attorney Greg Logan in an attempt to clarify his appraisal. 

After seeing the amended appraisal accounting for the discount, Logan asked LaCour: “Is this an appraisal of and (sic) undivided 1/3 interest or an appraisal of the whole ownership interest? Swamp land worth $1,000 per acre or $4,000 per acre?”

Minutes later, LaCour responded: “1/3 Undivided Interest is $768 per acre for 41 ACRES OR $31,500.”

LaCour’s response doesn’t add up. 

“He seems confused,” says one appraiser, noting you can’t value the property with the discount at $768 per acre and at the same time have a one-third interest add up to $31,500. The total of the 41 acres with the discount is $31,500, meaning LCG would have paid each owner only $10,500 if the discount were assessed. 

Appraisers interviewed for this story surmise that LaCour was under stress from LCG officials who wanted to make an attractive offer so this land deal could be consummated ahead of the secretive spoil banks removal project. The same day the land deal closed, Feb. 21, 2022, LCG’s contractor, Rigid Constructors, got the go-ahead to begin work; LCG waited an unusually lengthy 16 days to file the transactions into court records in St. Martin Parish.

“We always get pressure,” one independent appraiser who reviewed the lawsuit and documents for The Current says, noting that pressure is typically worse for government appraisals. “Seventy-five percent of the time you’re going to get pressure in some direction. That’s why I don’t work for entities like that, governments, not in this parish. If they don’t want to know the truth, we can’t work together.”

LaCour did not respond to a request for comment.  

Local appraisers say what’s important to keep in mind is that Logan and other experienced LCG attorneys involved in the transaction had in their hands LaCour’s initial $42,000 appraisal before the confusion started.

“It sounds like they read into it what they wanted it to say,” the appraiser continues. “It’s unfortunate, they’re just throwing [LaCour] under the bus … he’s kind of a scapegoat.”