2-day trial highlights city complacency in federal land grab and political payoff involving Ferrell Parkway

What City Manager James K. Spore called a  "triumph of representative democracy," involves the city giving away the public's Ferrell Parkway right-of-way for $40 and the purchase of $600,000 worth of 'swampland' development for $3M in tax dollars in an intriguing web of good ole boy network relationships involving other controversial city projects.

According to the deal Spore was defending during a 2-day trial in Virginia Beach Circuit Court Wednesday and Thursday, the city would pay $140,000 and the U.S. Fish and Wildlife Service (FWS) would kick in $2.86M in federal tax dollars to buy the proposed Lotus Creek development off Atwoodtown Road near the Sandbridge section of the city.  The city, which assesses property at 100% of market value, lists the property as being worth only $607,000.  

Ironically the partnership that owns the development (see:  Characters) owes the city back taxes of about $137,000, which by Dec. 5 may equal or exceed the amount the city wants to pay.  In effect, the city will be paying itself back real estate taxes, penalties, and interest, the developers owe the city.

In addition, Spore wants to give the FWS the property acquired for Ferrell Parkway, a direct route to the city's southern beaches for $40.  All this after, Spore admitted, the city had spent $500,000 for a study in 1998 and accepted that stated Ferrell Parkway was the best of all alternatives for a route linking the southern beaches with rest of the city.  The right-of-way for the road had already been acquired.

It became clear during testimony that FWS was holding the city hostage in that, if it didn't get the Ferrell Parkway property, it would forever work to prevent the city from clearing environmental hurdles to build the new road.

One top ranking elected official, not testifying, said, "What this boils down to is nothing more than the city bailing the developers out of a bad deal at taxpayer expense."

The 2-day trial was to determine if the city on a 7-3 vote, with Councilman Louis Jones abstaining, could lease FWS the property for $1/year for 40 years.  A similar effort to sell FWS the property in an almost identical deal, was ruled illegal by Circuit Court Judge Patricia West, the same judge who heard the lease case. In the earlier case West ruled the sale of public trust property required a super majority of city council, 9 votes.  The council could only muster 7.  Spore then came up with the leasing plan.

Friends of Ferrell Parkway and Lago Mar resident Andrea Kilmer filed the suits.  The challenge to the lease will require the plaintiffs prove the lease procedure did not violate state law in being rigged to make the award to FWS.  The lease, however, has not been signed.

Spore told plaintiff's lawyer Samuel W. Meekins that requiring the successful lease bidder to buy the swampy Lotus Creek development was not a part of the consideration to bid.

However, the city would not sign the lease unless FWS (1).  agrees to buy the swampy Lotus Creek development project; (2). gives the city certain parcels of land along existing Sandbridge Road, and (3). agrees to help the city clear environmental hurdles in improving the narrow, twisting, Sandbridge Road as an alternative to building Ferrell Parkway.  No other lease bidders could provide what Spore is requiring the FWS to provide.

Spore also acknowledged 'talking' with FWS in advance of advertising the bid, but not talking with other potential bidders.

City Planning Director Robert Scott told Judge West that the city had issued Lotus Creek development permits based on faulty, inaccurate information.  When she noted that if that were the case, the city could void the permits without liability.  "That's right," said Scott.  He didn't explain why, then, the city instead wanted to buy the property (or have others do so for it) at a cost of $3M. He did say the developers, despite staff opposition, had gone to City Council which approved additional permits.

City Atty. Les Lilley was ordered to hire Donald Clark as the city's outside lawyer to handle the case.  Judge West gave attorneys about two weeks to file briefs, another couple weeks to file answers, and she anticipated she'd rule on the case in early December.

(Persons noting errors of facts in VNS news stories are requested to email the editor at: Editor@virginianewssource.com or call 757-340-4686)

See also:
Federal land grab and political payoff?
City to pay $3M for property only worth $607,194
Developer owes city huge back tax bill
Chart showing web of characters
Chart of land assessments