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Developer of property involved in Ferrell Parkway deal owes more than $134,700 in back taxes

The developer whose Lotus Creek property has been tied to the city's attempt to turn over the public's interest in Ferrell Parkway, the right-of-way for a new, improved and direct route to the city's southern beaches, owes the city more than $134,700 in back taxes, according to records in the City Treasurer's office. 

The more than $134,700 includes back taxes, penalties, and interest and involves 32 parcels in the Lotus Creek Development project, but not the first half of 2002 due December 5.

The project is wrapped in a confusing, convoluted web of intrigue involving a city councilman with numerous interlocking connections to the various people, each with additional links, in what has been called a typical Virginia Beach 'good ole boy' network.  Councilman Louis Jones, a director of Resource Bank where the partners in Lotus Creek obtained financing, abstained from council action to avoid a conflict of interest.  

However, some of the partners are also on the bank board with Jones and along with others are also involved in the Town Center project.  Jones was the council's negotiator who drafted the Town Center contract with bank board and Lotus Creek principals.

When the city's attempt to sell the right-of-way earlier this year to FWS was ruled illegal by a judge, City Manager James K. Spore came up with an idea for leasing the property to FWS to circumvent the judge's ruling. (The city also filed an appeal which is pending).  The same group that sued to block the sale is also suing to block the leasing.  That case will be heard next Wednesday in Circuit Court.

The city is trying to rid itself of the long held, unassessed publicly-owned right-of-way for $1/year for 40 years to the U.S. Fish and Wildlife Service (FWS)The city will also pay Lotus Creek Associates, a partnership that owns the development project $140,000FWS, in turn, will pay Lotus Creek Associates $2.86M for property it won't develop.  Spore and several members of the council, alleging that Ferrell Parkway, as planned will never be built, prefer to improve the existing Sandbridge Road.

FWS has agreed to give the city a small parcel of land it owns to improve the existing narrow, twisting, and dangerous Sandbridge Road and further agrees to not oppose the project on environmental or other grounds.

At that point, Sandbridge Road will be the only way in and out of the popular and growing south beach area.  FWS has long maintained a hidden agenda to limit all encroachment on the Back Bay National Wildlife Refuge.  The proposed deal will give FWS total control over all future development of the southern area of the city.

Residents have called the deal a federal land grab and political payoff.  Others have charged this is Spore's way of getting the city out of a bureaucratic quagmire of bad decisions that could cost the city millions for giving the development all its permits to build in the first place.  Residents in favor of the deal contend, that if built out, the development will cause serious drainage problems in an area already suffering.

City Atty. Les Lilley said he was unaware of the unpaid tax situation involving the developers.  But because all taxes must be paid at closing, he said the city would have collected.

(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
City to pay $3M for property only worth $607,194
Land Grab, Political Payoff, or Bureaucratic Blunder?
Chart showing web of characters
Chart of land assessments