CHARLESTON, W.Va. -- The West Virginia Lottery agreed last week to pay $21.5 million for a new headquarters building in Charleston, even though the agency had an appraiser's report in hand that valued the property at $5.5 million less.

Last October, Charleston appraiser Kent Woodruff of The Appraisal Group determined the market value of the City Center West office tower at full occupancy was $16 million, according to records released Friday.

City Center West owner Ed Maier reviewed Woodruff's appraisal and rejected it, so the Lottery turned to the state Real Estate Division for help in securing a second opinion.

In December, the division hired Todd Goldman of Goldman Associates, who appraised the 13-story office tower at $22 million.

"He darn near hit it on the head, didn't he?" Maier said Friday.

State Real Estate Division spokeswoman Diane Holley-Brown said it isn't uncommon for the state to secure two appraisals before making an offer on a property.

"Since there are numerous assumptions made during the appraisal process, some of which can cause the results to vary significantly, the state is in the habit of securing two separate appraisals," Holley-Brown said.

Holley-Brown added that it also isn't unusual for the state to pay more for a property than the value determined by a single appraiser.

"Final negotiations consisted of reviewing the appraisals conducted by the state and the owner to come to an agreed price of $21.5 million," Holley-Brown said. "Ultimately, we developed an internal market value based upon the two external appraisals."

Maier said he disagreed with Woodruff's appraisal after the state shared a copy with him.

"When I saw it, I just dismissed it," said Maier, president of General Corp.

Maier said the state "did a good job" during negotiations. He described the sale as an "arm's-length transaction" -- one with no conflict of interest on either side.

"There was no hanky panky," Maier said. "They were wanting to buy it for the lowest price, and I wanted to sell it at the highest price."

Woodruff and Goldman declined comment Friday, citing state and federal laws that prohibit them from speaking about an appraisal without a client's consent.

"I'm not allowed to say anything about the appraisal, because my client says I can't," said Woodruff, who has spent more than 20 years appraising commercial properties.

Woodruff and Goldman were paid $5,000 each for their appraisals.

"I never saw Kent Woodruff's appraisal," Goldman said in an e-mail message Friday night. "I have client confidentiality and can't comment about my work."

Woodruff's client list includes Bank One, the city of Charleston, Wesbanco and United National Bank. He has completed more than 4,000 appraisals during his career. In the past year, he has completed seven appraisals for state agencies.

Goldman, who has been in the real estate and appraisal business since 1995, also has impressive credentials.

Goldman Associates is one of the state's leading appraisal groups, with a client list that includes Huntington Banks, Charleston Area Medical Center, CSX, the Kanawha County Commission, Bank One and the state Public Port Authority. Goldman specializes in commercial appraisals. His father, former Charleston Mayor Jay Goldman, heads the firm.

In their reports, Woodruff and Goldman also included appraisals of City Center West's "as is" value -- based on its low occupancy. Under that scenario, Woodruff appraised the building at $12 million, while Goldman put the value at $20.5 million. State officials have said appraisals based on full occupancy are a better measure of a property's value.

The Gazette-Mail requested the City Center West appraisal reports on March 1 under the Freedom of Information Act. The state Real Estate Division released them Friday morning.

The Kanawha County Assessor's Office has appraised City Center West at $10.5 million.

County officials have said the figure was based on the building's low occupancy. Chesapeake Energy, which had a regional headquarters at City Center West, vacated its offices last year as part of a restructuring action.

Holley-Brown said state officials have notified the Legislature of the pending City Center West sale, as the law requires. The deal is expected to close by June 30.

The Lottery Commission had amassed nearly $70 million for the purchase of a new headquarters. The fund also will be tapped to make renovations. The remainder of the $70 million will go back into Lottery revenue, to be appropriated by the Legislature.

The Lottery plans to move to the new headquarters by early 2011. The agency now leases space on MacCorkle Avenue, across the Kanawha River from downtown Charleston.

The Lottery will occupy slightly more than half of the 130,000 square feet of office space at City Center West. Other state agencies -- which haven't been named -- also are expected to move into the building.

The office tower, located at 900 Pennsylvania Avenue, near CAMC Women and Children's Hospital, also includes a 490-space parking garage.

Reach Eric Eyre at erice...@wvgazette.com or 304-348-4869.