Complete Biz Journal Article

State makes offer to buy contested Haw River land

The Business Journal of the Greater Triad Area - by Justin Catanoso The Business Journal Serving the Greater Triad Area

The ongoing debate over 690 acres of private land in northeast Guilford County -- whether it will become an upscale golf course community or instead more than double the size of the Haw River State Park -- could soon be resolved.

Or not.

Just last week, the state made an offer to Bluegreen Corp., of Boca Raton, Fla., which holds the options on the acreage, to purchase the tract for an amount appraised at commercial value -- even though the land is currently zoned for agriculture.

"The state has made what I consider a very reasonable offer for the entire property," says Lewis Ledford, director of the Parks and Recreation Division of the N.C. Department of Environment and Natural Resources.

Ledford confirmed that the reported amount of $18,000 per acre was "reasonable to assume, and the state can afford to make that kind of offer."

In other words, the deal -- which is being negotiated by the state Property Office -- is worth a total of $12.4 million, or equal to what Bluegreen is believed to have offered to acquire the options to develop a 775-home golf course community on the Haw River.

Jill Lucas, a spokeswoman for the state Department of Administration, which oversees the Property Office, declines to comment, other than to say, "We hope to have a resolution by the end of the month."

If the state's offer were being made directly to the three property owners whose wooded and open land makes up the 690-acre tract, it's likely that the next step would have been scheduling a closing date. For reasons we'll explain later, that opportunity was lost three years ago.

Instead, the ball is squarely in Bluegreen's court. The development firm, through it's attorney Steve Levitas in Raleigh, declined to comment on the ongoing negotiations.

But Bluegreen would seem to have these options:
It can accept the state's offer and then turn around and satisfy the purchase agreement it signed with the property owners earlier this year. Paul Milam, a Guilford County real estate agent, brokered the deal.

(Milam says he has not seen the offer and is concerned that there may be terms or conditions attached to the state offer that might reduce the amount of money the three property owners actually receive; answers to those concerns were not immediately available).

The downside to Bluegreen accepting the state's offer is that it has already invested several hundred thousand dollars in planning for what's being called Patriot's Landing. Bluegreen hopes to make millions in profits on a completed project; accepting the state's offer would leave them breaking even at best, or perhaps even losing some money.

Or Bluegreen can reject the state's offer and try to convince Guilford County commissioners to rezone the property to enable Patriot's Landing to go forward, which appears risky. This high-profile project has yet to draw the public endorsement of even one commissioner, and four commissioners (of the six votes needed) told us last month that they would likely oppose the rezoning.

Meanwhile, commissioners are being inundated with calls, letters and e-mail to reject the rezoning request in a highly organized, well-financed campaign by the Citizens for Haw River State Park.

Apparently rattled by the rising public sentiment against the project with virtually no one speaking in favor of it, Bluegreen recently requested that this month's rezoning hearing be delayed until December.

The deal grows more complicated still for the developer.

If the rezoning fails, Bluegreen could let its purchase options expire, thus enabling the state to deal directly with the three property owners (and locking in its losses). Or it could come up with a different development plan for the property that might be more palatable to the commissioners for rezoning.

Even if the rezoning passes, Bluegreen isn't in the clear. It must still obtain permission from Rockingham County to build a sewage treatment facility there. And there are a variety of state water-quality permits that Bluegreen must obtain because of the impact the project might have on the Haw River, which feeds downstream into Jordan Lake, a major Triangle water source.

If you're wondering where the state would get $12 million to buy parkland in Guilford County, you need to look to the N.C. Parks and Recreation Trust Fund, which was established by the General Assembly in 1994 and is supported by a tax on real estate transfer deeds.

Since its creation, the fund has provided more than $111 million in land acquisition for state parks and state natural areas. The fund is administered by an 11-member board that meets quarterly and authorizes all trust fund projects.

Members are appointed by the governor and leaders of the state House and Senate. Neither Guilford nor Rockingham has an appointee. A $12 million deal would be among the higher prices the state has paid for parkland, but given the state's rising land prices, not unprecedented.

Dropping the ball

It's possible that none of this wrangling or controversy would have been necessary if state officials had been more diplomatic three years ago when first informing property owners in the area that they wanted to purchase their land to expand the new Haw River State Park.

Thaxton Richardson, who has used his 550 acres in the contested parcel for some 40 years to raise beef cattle, says the state got off on the wrong foot with him. The first time Richardson and many other property owners knew of the state's interest in buying their land was when they were invited to a meeting in early 2004 with state officials.

"They laid out what they wanted, and it looked like a done deal," Richardson recalls. "The impression they left was one of arrogance, as if they were entitled to our land. No one ever came to us before that meeting and asked what we would like to do."

Now on guard and not trusting the state's intentions, Richardson told a state official in mid-2004 that his land wasn't for sale. He gave that same answer when contacted a year later. But when he heard the state was seeking to acquire land all around him, he began to reconsider.

"If you asked me 10 years ago when I would make my land available for sale, I would've said 2040," says Richardson, who is 78, and whose mother lived to be 107. "I planned to live out my old age there."

But with the state's interest in his land, and all the other residential development nearby, Richardson realized he didn't have the luxury of waiting to sell, particularly because his land doesn't have main-road frontage.

In the fall of 2005, Richardson heard from a state official again, and was asked to give permission to have his property appraised. The state cannot make an offer on private land without an appraisal, and it cannot pay more than that amount.

When Richardson learned from the official that the state had paid about $8,000 per acre to buy 300 acres to establish the Haw River State Park, he responded: "That's not going to get my property." The official promised to call back in about a week.

"It was four or five months before I got another call, but in that time I decided I needed to do something else," Richardson says, noting that he and two other property owners signed with Paul Milam to broker their property for development as a single parcel.

"As far as I am concerned, the state dropped the ball," Richardson says.

Other nearby property owners, even some eager to see their land go for parkland, complain of difficulties and delays in dealing with state officials -- all of which leads them to suspect that the state is angling to pay them less than their land is worth.

Lewis Ledford, with the state parks and rec department, responds: "I know we have been trying to get permission to appraise the land since 2004. When you look back, you can see that we could have done a better job of it. I do regret if Mr. Richardson feels as if he was treated badly.

"I do believe that Mr. Richardson retains the right to determine when, how and if to sell his land. I don't believe we have put any pressure on him, and I know it's important to have good relations with key sellers. We have tried to handle this honestly, but if you look back, there are things we could have done better."

Three years after the fact, the state may have the opportunity to make it up to Richardson and the other property owners involved. It all depends on what Bluegreen decides.

Reach Justin Catanoso at (336) 370-2896 or jcatanoso@bizjournals.com. His business reports can he heard Fridays on WFMY-News 2 at 6:35 a.m. and WFDD-88.5 FM at 7:35 a.m. and 5:30 p.m.

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