Cover Story

By Kevin Lee Associate Editor

Everything about Ms. Annie screams “grandmother.” The kind eyes, the grey hair and a way that makes you feel as if she always truly understands.

Ms. Annie Poole’s house is much the same as her. From the thick, wizened scuppernong vine behind the historic Midtown home to the fig tree beside the back door, it resounds with warmth, care and comfort.

Even so, there was one thing Poole couldn’t understand. She couldn’t comprehend why Rhonda Ledbetter wanted her home so badly.

Until the name of Ledbetter’s employer arose.

Ledbetter made the rounds in Sherman Heights, knocking on doors in the neighborhood just west of Lyons Park and asking for homeowners. Poole says Ledbetter told her she represented the interests of the University of South Alabama.

“I lived here 30 years,” said Poole. “I own this place, I’ve been here all this time and they want me to sell it and then lease it from them for three years? I don’t think so.”

Ledbetter was persistent, so Poole gave her a figure in excess of $200,000. “She said she would have to go back and check on it,” Poole said, “to see if it was OK. She came back and said they turned it down. So I lowered it a little. They turned that down, too.”

Poole said she heard the term “eminent domain” thrown around. A neighbor across the street also mentioned the phrase coming from Ledbetter. Neither of them has sold their house.

Probate records show Ledbetter’s offers have worked around the neighborhood, though. The registered nurse from the recovery room of USA Medical Center began buying real estate there in January of 2002 when she bought a house at 1606 Lucy St., according to probate records, and restored it. The area had fallen into neglect in a few spots and neighbors say Ledbetter told them she had hopes of turning things around.

In May of 2002 Ledbetter began buying a succession of empty lots bordering the green space maintained by U.S.A. Children’s and Women’s Hospital. By December of that year she acquired five of the lots, according to probate records.

Those same records show Ledbetter continued to accumulate other neighborhood land throughout 2004.

Meanwhile, The University of South Alabama had begun plans for a cancer research center in Mobile. The facility was originally slated to be built in West Mobile, but plans were changed and an alliance with Mobile Infirmary forged. Ground would now be broken beside the hospital in Midtown Mobile.

This launched another set of plans for the neighboring residential areas, plans that included a “mirror image” of the cancer research center to be built in Sherman Heights.

According to Wayne Davis, Vice President for Financial Affairs for the University of South Alabama, Ledbetter approached him in late 2005 with an offer.

“I didn’t even know she was an employee at the time,” said Davis. “She told me she owned this piece of property and it was on the boundary with the children’s park and she wanted to know if we’d be interested in buying it. We had a couple of conversations and we came to an agreed-upon price and then I found out in talking to her that she lives in one of these houses and had a local knowledge of the real estate area.”

Davis saw an opportunity. “I told her, ‘We’re trying to buy property in there. We’re not being aggressive about it because if we have an aggressive program the price will just go up and I’m looking for the most preferable, lowest cost way to buy.’ And I said, ‘If you buy any other property, or know of something we can buy, let me know.’ And I said, ‘If you find something, we could probably do it a little bit below the radar screen and not tip everybody off that we’re buying property in there, you buy it and we’ll pay you ten percent more than you paid for it. You buy it and we’ll buy it from you.’”

Ledbetter wouldn’t have carte blanche though. Davis said she would have to bring the offers to him for final verification.

According to Davis, Ledbetter did not officially broker the properties, the realty changed hands from the original owner to Ledbetter and then to USA, often in a matter of a day or two. Sometimes in the same day. The land purchases have mostly taken place since summer 2005, and have increased dramatically in the past six months.

When Lagniappe asked about the sale of her land to the university, Ledbetter curtly responded, “That’s none of your business” adding that she wouldn’t speak about university business.

According to probate records and those from the university, Ledbetter acquired over 12 pieces of Sherman Heights property for the university totaling $974,000. Ledbetter appears to have made a grand total of $145,440 from the deals to date, including her first sale which netted much more than a 10 percent return because she’d owned if for some time. Just in the past two months, Ledbetter has made more than $50,000, according to those probate court documents.

When asked whether Ledbetter’s 10 percent commission on the sales might prompt her to keep prices high, Davis responded, “But we have the final say and we’ve already turned some down.”

Yet, things may not be that simple. According to state code on the acquisition of land by public institutions, section 18-4-14 entitled “Procedure for acquiring real property” states: “Whenever real property is acquired by a state agency in connection with any programs or projects, the acquisition shall be conducted, to the greatest extent practicable, in accordance with the following…Real property shall be appraised before the initiation of negotiations, and the owner or his or her designated representative shall be given an opportunity to accompany the appraiser during his or her inspection of the property.”

When asked if the university had the land appraised prior to Ledbetter’s inquiries, Davis said, “No we did not because the history was that after we bought three houses in here (Walshwood) out of about 40, we had made the market. Now we checked with our attorney, in-house attorney, the attorney general and the ethics commission before we did any of this.”

USA Director of Public Relations Keith Ayers explained further. “With the exception of the last six months, the appraisal is almost always higher than the price on the open market. Appraisers are thinking, ‘I need to get the best number because I need to keep this person using me.’ So sometimes if we use appraisers first, we sometimes use an artificial higher value.”

In regard to assessing market value for the properties, Davis said, “We started out with the city tax revenue showing the assessed value. You can determine what they value that from there. So we had those numbers, which are basically obsolete once you buy three or four houses because the market changes.”

However, there is substantial variation between the university’s payout and the assessments of the revenue commission per the tax bills. According to probate records, on Nov. 11, 2005, the university paid $55,000 for a property assessed at $14,000. On Sept. 13, 2006, the university paid $165,000 for a property assessed at $50,700 and paid $99,000 for a property assessed at $39,700. On Oct. 4, 2006, Ledbetter bought an empty lot at 188 Lambert St. for $60,000 then turned around and sold it to USA the same day for $66,000. The lot was assessed at $7,500. Others follow suit.

On Sept. 6, 2006, the university paid $113,000 for a property at 1606 Lucy St., assessed at $32,000. A curious note of that sale is that the lot not only contained the house originally restored by Ledbetter, but that on July 21, 2006, Ledbetter sold the house to Lorilee Atwell, someone USA’s Web site lists as a nursing administrator at USA Medical Center. Records show Ledbetter sold the property to Atwell for $85,000. On Sept. 1, 2006, Ledbetter bought the house back from Atwell for $103,000 and then sold it to the university for $113,000, according to probate records. It is unclear if any relationship exists between Ledbetter and Atwell.

Davis feels there was no legal or ethical violation involved in Ledbetter, a university employee, benefiting financially for facilitating the transactions. “You know hospital employees aren’t subject to the ethics law,” he told Lagniappe. “Anybody who works for the university who makes $50,000 and above has to file an ethics disclosure form. If you work in the hospitals you don’t, even though they’re university employees. That’s just the way it is for hospital employees. And we also checked with the attorney general’s office.”

Davis believes Ledbetter’s knowledge of the impending project was coincidental. “I think it was just a fluke thing,” he said. “I’d never met her in my life and she called me. She might have seen that we bought a couple of these lots.”

As for Ledbetter’s alleged allusions to eminent domain? “The way you do eminent domain,” said Davis, “is you get it appraised and the seller gets it appraised and maybe a third appraisal and you arrive at a fair value. But this university hasn’t used eminent domain in 43 years.”

Davis is confident they will acquire the remaining properties needed to break ground on the facility. “But those houses that are on these lots (points to Sadie Street on map), they’re not much to look at, it’s not like it’s somebody’s plantation home that’s been there for 200 years.”

A resident of one of those houses, Steve McPhail, recently said Ledbetter has offered in excess of a quarter of a million dollars for the properties assessed at $63,700 by the revenue commission.

A question yet to be answered is whether state code section 36-25-8 stating that no public employees shall use information gained in the course of their job “in any way that could result in financial gain other than his or her regular salary” comes into play here.

Hugh Evans, general counsel for the Alabama Ethics Commission, said there were no formal or informal advisory opinions given to USA or its hospitals concerning this matter. Evans also said that just because a state employee makes less than $50,000, it does not mean they are not bound by the ethics law, only that they may not have to fill out financial disclosure forms. In speaking with some USA hospital employees, Lagniappe was told they recall having filled out such forms in the past.

Evans said there is an exemption from the state ethics laws for employees of state hospitals, but he was not certain whether USA hospital employees are listed as state hospital employees or university employees.

Evans said there could be cause for his office to look into a situation like this where an employee of a state agency is working in a capacity for that agency that is outside his or her normal duties and is bringing a profit. Evans could not speak about the specific situation involving Ledbetter’s sales to USA, but said in general such a situation might garner a look from the Ethics Commission. He said state law prohibits state employees from personally benefiting from their positions.

“What the law prohibits is any public employee or official using his or her position to benefit themselves or their family,” Evans said. “Hypothetically speaking, a situation like that would raise enough red flags to warrant an investigation.”

Evans said in order to investigate such a situation, a written complaint would have to be filed by someone with personal knowledge. However, he said anyone who could get online and follow a paper trail from the Mobile County Probate Court Web site would be considered to be someone with personal knowledge.

A violation of the state ethics law is a Class B misdemeanor, punishable for a jail sentence of 2-to-20 years and up to a $10,000 fine. At press time, the Mobile County District Attorney’s Office was examining the situation, but had made no determination on whether or not there was any potential problem stemming from the land sales.

The Alabama Attorney General’s Office could not immediately find any record of a formal or informal request by USA pertaining to this situation. The AG’s office also said it has never issued a formal opinion regarding the purchase of land by public employees and resale of that land to their employers.

And Ms. Annie? Well, the lady at the corner of Lucy Street and Lyons Park Avenue bides her time and takes care of a father with Alzheimer’s disease. She talks of grandkids in the backyard and fruit trees lost to hurricanes.

And before long, she’ll watch the bulldozers rumble into the lots up the street and wonder if her turn will ever come.

Kevin Lee is Lagniappe associate editor. Contact him at klee@lagniappemobile.com.

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