The money lost to ASU could have provided full, annual, in-state tuition waivers for 136 students who have seen the price of college increase 70 percent in the past three years.
The sale of the sprawling president's house -- including two prime acres less than a mile south of ASU, at 2400 South College Avenue in Tempe -- stinks from start to finish.
ASU failed to sell the property to the highest bidder, former state representative Steve May.
Instead, ASU sold the property in August 2005 to John Bebbling, a longtime ASU booster and prominent Tempe businessman with connections to Tempe City Hall.
Bebbling (who donates the paint used to keep the "A" on the butte west of Sun Devil Stadium looking sharp) resold the property less than six months later, posting a $625,000 gain. Bebbling did not return my call for an interview, but public records show what happened.
Records I obtained also reveal that ASU skirted its procurement rules when it selected a broker to sell the property because it provided Tempe real estate agent Steve Tseffos, one of four brokers who responded to an ASU request for proposals to sell the property, with inside information that helped him prepare his bid.
The fact that ASU elected to even hire a broker to sell the property that university officials had to know would sell for more than $1 million raises a huge red flag.
The straightforward way to sell this property -- if it ever should have been sold to begin with -- was to hold a well-publicized public auction. That way, there would have been no controversy over the fair market value of the property and all potential buyers would have been given a fair shake.
Instead, ASU hired Tseffos to market the property. ASU would later reject an offer that would have netted it more money for the property that resulted in Tseffos' pocketing an extra $27,500 commission. (Tseffos refused to be interviewed for this column.)
It's this type of sleazy business deal that infuriates lawmakers, taxpayers and alumni -- including me-- who are constantly asked to contribute money to ASU.
The Arizona Department of Real Estate should launch an investigation to determine if Tseffos violated state real estate rules in his handling of the transaction. If so, appropriate action should be taken.
And the Arizona Board of Regents should investigate ASU's real estate department to determine if the sale violated the board's policy since ASU failed to sell the property to the highest bidder and provided Tseffos with exclusive information prior to selecting him as the broker.
Here's what happened.
When he moved to Arizona in 2002 to take the job, ASU President Michael Crow chose not to live in the 45-year-old, university-owned home and instead built a new house for himself and his family in Paradise Valley. Crow receives a $50,000 annual housing stipend in addition to his $440,000 annual salary.
For the past few years, the president's house was being used by the ASU Foundation, a nonprofit fund-raising arm of the university, to house its offices. The foundation, however, was planning to move into a new building and ASU decided it no longer needed the president's home.
In December 2004, ASU obtained an appraisal on the property that indicated a fair market value of the residence of $740,000. But records show ASU officials knew that the property was worth far more because the existing zoning allowed up to eight single-family residences to be built on the two-acre parcel.
Soon after the appraisal was completed, ASU real estate officials met with Tseffos in December 2004 to discuss the president's property. During these discussions, Steve Bott, ASU director of real estate services, allowed Tseffos to review the recently completed appraisal on the president's house.
"[Bott] wanted Tseffos' professional opinion as to whether or not it fairly reflected the value of the property," says ASU spokeswoman Terri Shafer.
At the time of the December 2004 meeting, Tseffos was quite familiar to ASU real estate officials. In the fall and winter of 2004, Tseffos was attempting to sell the historic Farmer-Goodwin Mansion in Tempe to ASU. University officials toured the property but decided against purchasing it.
On December 31, 2004, ASU published a request for proposals for brokers to sell the ASU president's house in the East Valley Tribune. Tseffos was one of four brokers who submitted a bid for the job.
Tseffos had a huge advantage. He was the only broker who had seen the university's appraisal and who had met previously with ASU officials to discuss the sale of the president's house.