Flawed appraisals of the Potomac Yard Land Exchange in Virginia cost the federal government almost $29 million, according to a recent report by the General Accounting Office (GAO).

The report examined a land exchange involving the 380-acre parcel in Alexandria and Arlington counties and found that the National Park Service was shortchanged in the deal. Furthermore, the GAO predicts that it is highly unlikely that the money could ever be recovered.

Land exchanges – trading lands owned by corporations, individuals, or state or local governments that are willing to trade – are used by federal agencies as a tool for acquiring non-federal land.

Private interests often benefit from these real estate deals by receiving too much money for their land. These interests also end up paying too little for government property that they can turn a profit on.

The GAO report examines a deal struck between the Park Service and the owner of the property, Commonwealth Atlantic Properties Inc., formerly the RF&P Corp.

The debate dates to 1938, when the Park Service imposed a restriction on 29 acres in Arlington, prohibiting then-owner RF&P from using the property for anything other than rail activity.

In 1970, RF&P obtained the right to build an interchange to provide access to Potomac Yard. In 1997, Commonwealth Atlantic bowed to local opposition and relinquished its right to build the interchange. In exchange, the Park Service lifted its restriction on the development of the 29-acre parcel.

An appraiser was then hired to calculate the value of the company's decision to drop the interchange and calculate how much the Park Service was owed for lifting the development restriction. The appraiser found that Commonwealth Atlantic was owed $14 million by the Park Service.

However, the recent GAO assessment of the exchange indicated that the Park Service should have received more than $15 million, rather than owing the developer $14 million.

Taxpayers shouldn't be victimized by bad land deals that benefit private interests. For fair land exchanges to occur, the government must provide full disclosure of all land exchanges and use independent appraisals to determine that taxpayers are getting a fair return on their investment.