In a perfectly legal action, the city council recently paid Thomas Tye, its sometimes consulting appraiser, $549,381 to purchase development rights for 25 years under the Agricultural Reserve Program (ARP) for his property on Head River Road and billed the taxpayers.
ARP - sodbuster's retirement fundThe ARP has been dubbed the "Welfare Farmer's Retirement Plan." It establishes a theoretical line through the southern part of the city beyond which housing development will not be allowed. The city pays landowners for their theoretical 'development rights' for not building for a period of 25 years. Much of the property couldn't be built on in 25 years anyway. Those applying have to be recommended by an agricultural commission headed ironically by former City Councilman John Baum who took more than $1M out of the fund himself. Despite the large payouts, development has continued mostly unchecked in the so-called prohibited areas. |
The city could have purchased the property in fee simple, in other words owned it outright, for less than it paid for the development rights. And the public could have had access to it for rabbit hunting, birding, or whatever. Tye only paid $214,000 for it.
This way, however, Tye keeps the property and gets what has been dubbed a "Welfare Farmer's Retirement Fund" payment of 156% more than he paid for the property. If he should rent it out or farm it, he'll get the income from that. He would also be eligible under the federal farm subsidy program for additional income.
The council justified this transaction on grounds the property was owned by multiple heirs, some who were in jail and some who were overseas, but Tye found them all and bought them out for a total of $214,000. In less than a year, he got the good ole council to pay him $549,381 and billed it to the taxpayers.
Tye is a private appraiser who is hired as a consultant by the city on various projects, including the condemnation/demolition of the Tradewinds Hotel at 16th & Atlantic, owned/controlled by ex-convicts Edmund C. Ruffin and Bruce Thompson. A pump station being constructed adjacent to the unopened hotel was blamed for damage resulting in its demolition. The city council paid Ruffin and Thompson $1,550,000 and billed the taxpayers. Tye and a CPA consultant, Michael Mares of Witt, Mares, & Co., established the price the city paid, according to officials.
Tye's ARP deal is detailed in the chart below:
|
Tom Tye ARP
Application for non-farmed
land |
Acres |
Assessment |
Purchase
Price |
City Council
paid |
Gain/Loss |
|
Parcel A on Head River
Road |
81.17 |
$159,000 |
$118,000 |
$349,316 |
+$231,316
+196% |
|
Parcel B on Head River
Road |
42.07 |
$119,166 |
$96,000 |
$200,065 |
+$104,065
+108.4% |
| Totals | 123.24 |
$278,166 |
$214,000 |
$549,381 |
+156.7% |
|
Virginia Beach City Council
Land Company gives better than average return on investment. Way
better.
Council could have bought the property fee simple and saved $335,381. And the taxpayers would have been permitted to walk on it. Moral to the story: When you're robbing Peter to pay Paul, Paul never complains. |
Tye was also the appraiser for the city in its recent illegal attempts to dispose of its Ferrell Parkway right-of-way by linking it to the purchase of a swampy land development by the U.S. Fish & Wildlife Service (FWS). Court action blocked the city from disposing of the right-of-way. Although the managing partner of the proposed development, Al E. Abiouness of Lotus Creek Associates, testified his group had no claim against the city and would not file any, the city at the urging of City Mis-Manager James K. Spore paid Abiouness's group $160,000 anyway and bill it to the taxpayers.
Lotus Creek Associates had close ties to Resource Bank, where some partners were directors and where it got the loan for the development, and to City Councilman Louis Jones, also a bank director. The bank did not lose any money on the deal and Jones didn't vote on the final payout on grounds he would have been in conflict of interest.
There are many complex, convoluted, confusing, but interlocking relationships in the stories involving those mentioned. For details, you need to go to the database (see below).
See stories below for a history of the Lotus Creek Development:
This is the Sodbuster Series: