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Land grab, unpaid taxes, good ole boy network, overpriced land part of Ferrell Parkway deal

City Manager James K. Spore has given the City Council and Virginia Beach citizens a deal they can't  refuse if everyone, except the taxpayers, are to win.

He's gotten council approval, in a sharply divided vote, for the U.S. Fish and Wildlife Service (FWS) and the city to pay $3M for a developer's property that the city only values at $607,194.  Real estate in Virginia Beach is assessed at 100% of actual market value by state law.  Much of the property involved may have serious drainage problems, according to assessment records, making it worth even less on the open market.  (See property assessment charts.)

Yet Spore wants to pay Lotus Creek Associates LLC, a partnership of businessmen in a good ole boy network, 394% more than the city says the property is worth. 

A resident opposed to the deal said, "This seems like an awful waste of federal tax dollars.  At a time when our nation is considering re-instating War Bonds to help finance a war against the worst terrorism attack in our nation's history.  FWS, if it has that much money to waste, should do the patriotic thing and turn it back to the treasury to go into our war effort."

The purchase involves a deal that will allow Spore to cure some bureaucratic ills in granting development permits that probably wouldn't be approved today and dispose of the public right-of-way acquired for a new, direct, multilane road to the city's southern beaches at Sandbridge.

The Lotus Creek development is located off the route to Sandbridge near Hell Point Golf Course.  It is zoned for condo development and has all the permits needed to construct them.

Some citizens in that part of the city, leaning heavily on the political influence of council members Linwood Branch, Will Sessoms, and Barbara Henley, charge, if developed, would greatly exacerbate existing serious drainage problems in the area.  They convinced the city it would be best to abandon the right-of-way, which would attract more development to the area,  and instead improve existing, narrow, winding, 2-lane Sandbridge Road.  Much of the political water carrying was under the guise of potential environmental damage from a new road.  

Plans now indicate that improvements to the existing road will cause far more environmental damage to the fragile areas than the new road would have.


Developers owe $134,700 in back taxes

City tax records show that unpaid taxes on the undeveloped property total more than $134,700.  No taxes have been paid since 1998.  Additional taxes will be due Dec. 5.  City Atty. Les Lilley said the city won't lose the taxes because they must be collected when the property is sold.

Could it be that the $140,000 City Mgr. Spore wants the city to pay toward the property's purchase will only amount to the collection of back taxes?

In which case the city gives away the right-of-way for a new road to Sandbridge to FWS for $40 and gets absolutely zero in return in the entire deal?  Seems an unusual way to collect back taxes. (See: Taxes)

Spore's first deal was to sell the right-of-way to FWS for $2.86M, which would be used to buy Lotus Creek development.  The city would kick in $140,000 for a total of $3M the developers want.  The city would then also give the development property to FWS. 

The sale deal was approved by only 7 votes with Councilman Louis Jones abstaining See Characters because he is a director of Resource Bank where the Lotus Creek partnership had obtained its financing.  Circuit Court Judge Patricia West, ruling in a suit brought by residents who do want a new road to Sandbridge, said the city acted illegally and could not sell the property without 9 votes in favor.

Spore couldn't get 9 votes, so he hatched an idea to circumvent the judge's ruling and the city could still do the deal - still paying $3M for property valued at only $607,194:  The city would lease the Ferrell Parkway right-of-way to FWS to $1/year for 40 years and FWS would instead buy Lotus Creek for $2,86M and the city would kick in $140,000.

One council member said, "These are very baffling disclosures."

Residents who successfully sued to block the illegal sale have now filed suit to block the lease.  A hearing on that case is set for 9:30 a.m. next Wednesday in Virginia Beach Circuit Court.

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

See also:
City's bid process called 'sham' by judge
Land Grab, Political Payoff, or Bureaucratic Blunder?
Developer owes city huge back tax bill
Chart showing web of characters
Chart of land assessments