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Nonprofit Newswire | AG Questions Health Center Land Deal

Rick Cohen
March 30, 2010
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March 29, 2010; Union Leader | Maybe this transaction was entirely legitimate, but we’d have the same questions as the New Hampshire Attorney General. Looking for a new site for its headquarters, to be funded by federal stimulus money, a nonprofit community health center bought a piece of land for $705,000, some $100,000 above its 2009 assessed value.

Given the real estate downturn due to the Great Recession, it’s certainly surprising for a nonprofit to pay a premium price for land. In this case, the owner of the land was a firm—one of whose trustee-owners happened to be the husband of the health center’s executive director.

Prior to the AG’s questions, the head of the AG’s charitable trust unit and a Deputy AG had previously OK’d the deal. The AG became suspicious after hearing the news that the health center had been offered another site by the county government at a price of $1 a year for 100 years. A comment on the Web site from one of the center’s board members asserted that the $1 property was a location that would have been difficult for patients and staff to get to, while the chosen site was located near good bus routes and between two hospitals.

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The county spokesperson said that the county site was also between the two hospitals, but the offer was rejected nonetheless. The husband contends he never spoke to his wife about the transaction, dealing exclusively through a broker.  The board claims that they got a deal on the property since the owners (including the husband) had an appraisal showing the value at $750,000 (compared to the $599,000 assessment) and had originally requested $1.2 million.

Maybe the deal is legitimate, maybe not (an attorney on the health center’s board voted against the transaction and quit shortly afterward, though he wouldn’t give a reason to the press). But insider real estate transactions are always worth two, three, and four looks, not just for legality, but for appearances as well.

Be careful, be very careful when it comes to purchasing real estate—or anything, in fact—from board members, staff members, or family members.—Rick Cohen

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About the author
Rick Cohen

Rick joined NPQ in 2006, after almost eight years as the executive director of the National Committee for Responsive Philanthropy (NCRP). Before that he played various roles as a community worker and advisor to others doing community work. He also worked in government. Cohen pursued investigative and analytical articles, advocated for increased philanthropic giving and access for disenfranchised constituencies, and promoted increased philanthropic and nonprofit accountability.

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