Owen County government approved a $1.62 million purchase of land for a new jail.
Despite unanimous support from the County Board of Commissioners and a 4-1-1 vote by County Council during their joint Monday night meeting, some in the public accused officials of nepotism and not getting the best possible deal, charges which the county and realtor deny.
County commissioners chose realtor Tilden Keith to represent the seller and the county for the purchase. He’s the brother of county councilor Verl Keith, who is also employed by Keith Realty.
Verl submitted his conflict of interest form several days before the meeting and abstained from voting.
Spencer resident Denise Sudol had been active for weeks before the vote raising concerns about conflict of interest. During a contentious exchange at the Owen County Courthouse, she questioned Keith’s interest in fairly representing the county.
“Why do we have you representing both sides?” she asked. “That's like having the same divorce attorney. We need to have our own real estate agent, period.”
Keith defended his involvement, saying he did everything properly. Keith Realty received a two percent commission totaling $32,405.40. The average commission for a private real estate deal in Indiana is between five and six percent.
“There’s nothing been hid, nothing at all,” Keith said. “You bring another agent in, and they will charge more than I do, probably double over the whole transaction. So if you're talking about saving money, I mean it's ridiculous.”
Council president Polly Chesser answered audience questions for most of the three-hour meeting, including Sudol’s concern over conflict of interest arising from the use of a single broker. Chesser said her understanding is a single real estate agent for both sides is not unusual in a government land purchase.
“I'm not a commissioner. I personally probably wouldn't have done that,” Chesser said. “But that being said, I've also been told by several people that have been in that position before that that is common.”
Lara Grow, a senior lecturer of business law and ethics at the Kelley School of Business, said that this type of purchase is known as dual agency.
“I will say that there's a little bit less of a concern with a dual agency in a government transaction, because under Indiana law, there's less negotiation,” Grow said. “Indiana law requires there to be two appraisals of the property, and then the offer can't exceed the average of those two.”
Owen County paid $90,200 per acre, an amount Keith said he reached through his own research. That’s lower than the $95,000 average of two appraisals later commissioned by the county.
The 18-acre property sits at the western entrance to Spencer on State Road 46, between Walmart and the YMCA. Although it’s zoned as farmland and its taxable value is only around $2,460 per acre, its location on the highway and proximity to commercial development makes it potentially valuable, and difficult to find sale comparisons in Owen County. One appraisal obtained by WFIU/WTIU News looked at Marion and Monroe counties for reference.
Although the footprint for the new jail is only a bit over six acres, Keith said buying 18 gives planners more flexibility and a better price per acre.
As to the family ties, Grow said it’s perfectly legal if Verl disclosed his relationship to the realtor.
“I think the optics aren't great on it, but it does sound like everything legally, from what I'm hearing at least, was done correctly,” she said. “For me, the only concern would be if that councilman was directly financially benefiting because he works at the company.”
Keith told WFIU/WTIU News that the commissioners asked him to approach the sellers since they were his neighbors. He said his brother was not aware of the transaction until about a month after they agreed to sell. Verl said separately he had not heard about the deal at work and was informed at the same time as the other councilors.
The commissioners declined to comment and referred to the county attorney, but commissioner Sam Hobbs said at a July 2 meeting that he was the one who approached Keith.
“I only picked Tilden Keith because I knew he lived out there. That's why I picked him,” Hobbs said. “Could I have picked anybody else? Sure, I could have.”
The land purchase is just a fraction of the cost of Owen County’s new jail, which could cost up to $38.6 million according to the county’s estimates.
All the elected officials present, and many community members, spoke in favor of a new jail, citing deteriorating conditions at the current jail, which is built atop sinking land.
The bulk of the opposition is to the price, which has grown from $26 million in 2024. Chesser said that increase was due to changes in the structure of local income tax, jail design and construction costs.
“Would we do we want to spend $38 million on a jail? Would we rather spend it on roads or something like that? Absolutely,” Chesser said. “But right now our backs are against the wall.”
Sudol said she hoped local officials would vote no on the purchase and pursue a more transparent process.
“I'm bringing these things up not to be a fly in the ointment, because we do need a jail,” Sudol said. “We're being told every day that we don't have the jail, it's another $8,500. Well, we're being told that by the contractor who has a vested interest in us hurrying up and doing this job, because that's money in his pocket. That is not who we should be listening to.”
Councilor Anton Neff provided the sole no vote on the land purchase, expressing concern over the scale of the project and its impact on county finances.
“In addition to the additional operational costs that our sheriff had spoken about, we’re talking close to $3 million commitment per year that we will be entitled to pay,” he said.
Neff said he voted against the land purchase because it set the jail project in motion, but he didn’t see an issue with how the sale was handled.
“We're in a small community. It is tough to work with landowners and real estate folks and other professionals that don't know people and have connections,” Neff said. “I genuinely think that there was a good faith effort.”
