Baughn purposely fooled the public

If you have been following the Project Clover issue, you will find that there is a great opposition. Lowell Baughn has been on the defensive of Project Clover of what would happen if the County decides not to pony up the money. Not once has he admit that there could possibly be that the County may be paying too much for the land. That’s the opposition. The opposition has been saying all along that $7.5 mil for some farmland turn industrial is too much. One citizen even paid for out of his pocket to have it looked into and it was found to have favor the opposition side. Baughn said in a rebuttle that the appraiser that was used was not a member of the MAI (which an appraiser does not have to be a member of, much like a realtor of the NAR or auto dealer of the NADA NAIDA). What Baughn neglected to say was the appraiser that was used by the opposition is a certified appraiser for our area and would be the one that would be used by the USDA before any grants be determined. Baughn said in the rebuttle interview that Project Clover was purposely structured to kept from a voter referendum because he knew it would be denied. This sounds like a man that has already made up his mind not to trust the voters in the county. 

Baughn has yet to “sell” Project Clover to the public. He feels that he doesn’t have to. From his comments he makes in the paper he expects everyone to believe him, no if’s and’s or but’s.

In reality, if a business wants to settle here, they will settle here, business park or not.

Project Clover’s Worth

In a letter received yesterday by the Page County Board of Supervisors, Page County resident Phillip Rainwater has retained the legal services of Alexandria attorney Michael Lieberman of DiMuroGinsberg, P.C. and a certified general appraiser, Barry L. Pugh of the Colonial Appraisal Service, Harrisonburg Va., who has assessed the value of Project Clover, in highest and best use as industrial property, to be $2,525,000. On the basis of this value, the USDA would be extremely unlikely to loan the county $4.5M, and the consortium of banks an additional $2.0M, to fund the purchase of Project Clover.

Here is the Appraisal Letter  on Project Clover and the Lawyer’s Letter to the BoS.

View this document on Scribd

View this document on Scribd

The letter from Mr. Rainwater’s attorney cites major concerns and possible legal action over the following points:

– the financial impact of Page County funding a deal valued at more than three times market value

– lack of public hearing

– improper use of closed sessions

– conflict of interest

Here is the entire letter, dated May 12th, 2010:

Dear Mr. Woodward,

The law firm of DiMuroGinsberg, P.C. (“DiMuro”) represents Charles Philip Rainwater (“Rainwater”), a Page County resident. Mr. Rainwater is extremely upset and angered with Project Clover. Consequently, he has asked DiMuro to advise him what he can do to address his concerns.

Included are four of the topics which cause Rainwater concern. In addition, an appraisal of the Project Clover property by a certified general appraiser accompanies this letter.

One major concern of Rainwater’s is the fInancial impact that Project Clover will have on Page County. Rainwater would like to see the Board of Supervisors (“Board”) take appropriate action for the benefit and welfare of the majority of the citizens of Page County in dealing with Project Clover and the EDA revenue bond financing relating thereto. Rainwater has authorized the DiMuro law firm to take any and all legal means available, through the judicial system and otherwise, to ensure that the current Board of Supervisors act for the benefit and welfare of the majority of the citizens of Page County. Rainwater also wants to ensure that the business of governing Page County is done in a transparent manner and in compliance with all applicable laws, rules and regulations. Rainwater does not seek to settle his grievances in a court of law, but he is willing to pursue such actions, quickly and vigorously, if necessary.

DiMuro has labored hard in dealing with these issues. Therefore, we have copious facts and documents in our possession. Over the past several months we have reviewed the actions of the Board and the Page County Economic Development Authority (“EDA”) over the last several years, as reflected in the Minutes and other documents made available to us in regard to Project Clover, to the extent such actions have been made public. We are very concerned about several actions taken and contemplated to be taken regarding the Project.

First, Rainwater (and we conclude many citizens in Page County) believe that the purchase of the 210.313 acres of land from Mrs. Hudson (the “Hudson Property”) for use as an industrial park was at an excessive price. Accordingly, this enormous cost could cause the Page County taxpayers to have a severe increase in their property taxes and harm the Page County budget for years to come. From the paperwork we have reviewed, it is difficult to understand how the EDA can justify its purchase of the “Hudson Property” for $7,500,000 (U.S.), (which equates to $35,661.13 per acre).

In an effort to understand the market value of this property, DiMuro authorized an appraisal from a certified general real estate appraiser who practices in Page County. His name is Barry L. Pugh of the Colonial Appraisal Service in Harrisonburg. (Mr. Pugh’s appraisal is enclosed as exhibit A).  As you may know, Mr. Pugh has worked on behalf of Page County in the past as well as many other municipalities, banks and businesses in Virginia.

In making his appraisal, Mr. Pugh determined that the highest and best use of the subject property as of the date of value is for general industrial development and he determined that the market value of the subject property as of April 29, 2010 is $2,525,000 (two million five hundred twenty five thousand dollars) or $12.005.91 per acre. To be clear, based on Mr. Pugh’s appraisal, it appears that the EDA purchased the “Hudson Property” for almost three times its current appraised value. Rainwater wants to know: how can that happen and what can the current Board
do about it? Specifically, exactly who is responsible for a purchase price so far in excess of appraised value?

Based on our review of the documentation, it is our understanding that the EDA paid for this land purchase by making an initial payment of a little over $1,000,000 that was appropriated to it by the Board, and by issuing a bond (a note) in the amount of $6,500,000 to Ms. Hudson, secured by a Purchase Money Deed of Trust. The bond is a non-recourse obligation (e.g. the County and EDA cannot be sued for non-payment ofthe note), and it specifically states that the payment ofthe note is subject to appropriations by the Board.

Furthermore, the bond specifies clearly that it does not constitute a debt or pledge of the full faith and credit of Page County or the EDA. In other words, the Bond is not a “legal debt or obligation” ofthe County under the teachings of Dykes v. Northern Virginia Transportation District Commission, 242 Va. 357 (1991). Since this debt is not secured by the general credit of Page County, there is no legal obligation for the County to pay this note, and indeed, the note itself contemplates that in the event of non-payment, the sole remedy that may be sought by Mrs. Hudson is that the land purchased by the EDA would be foreclosed upon, and Mrs. Hudson would receive the remainder of her land back. It is clear that the current Board is under no legal obligation to appropriate any additional funds to pay for the EDA’s folly. This conclusion is a position we will defend vigorously, and we urge the Board not to be intimidated or influenced by other counselor government officials that propose otherwise.

If the County wanted to legally incur this debt and pledge the full faith and credit of the County, the Virginia Constitution sets out the mechanism for doing so in Art. VII, section 1DCb), which states, in pertinent part:

No debt shall be contracted by or on behalf of any county or district thereof. .. except by authority conferred by the General Assembly by general law. The General Assembly shall not authorize any such debt … unless … provision be made for the submission to the qualified voters of the county or district thereof… for approval or rejection by a majority vote of the qualified voters voting in an election on the question of contracting such debt. Such approval shall be a prerequisite to contracting such debt.

Quite simply, the Virginia Constitution requires that before incurring this type of legal debt, a majority vote of the qualified voters of Page County had to approve this obligation. The choice was made not to place the matter on the ballot for the voters to decide, and as such, all of the parties to the purchase of the Hudson Property were on notice that neither the EDA nor Page County was incurring a legal obligation when entering into that transaction. A “moral obligation” is not a legal obligation, although we have heard from citizens of Page County that arguments to the contrary are being made to the current Board. As a matter of law, such an argument is erroneous, as shown by the Dykes case.

If the County wants to take this obligation on as a legal obligation, which Rainwater urges the Board to resist, then Rainwater believes, as the Constitution requires, that the matter be placed on the ballot for the voters of Page County to decide.

A second major concern of Rainwater, in addition to the exorbitant cost that the EDA incurred in purchasing this land, is the process used by the EDA in conducting the EDA’s business. We believe there are substantial grounds for legal action based on these EDA practices. For instance, if this bond was intended to be a Private Activity Bond as contemplated under IRC §141(a) then it must meet the public approval requirements ofIRC §147(1). We have been informed that there was no published public notice of the hearing at which the bond was approved by the EDA in
accordance with Virginia Code § 15.2-4906 (A)(B). If so, the EDA failed to follow procedures set out in the Virginia Industrial Development and Revenue Bond Act which requires approval of the bond at a public hearing that is held after public notice of such meeting is published in a newspaper having general circulation.

In addition, as these members of the EDA are appointed by the Board, we feel that the Board should be aware that the procedures used by the EDA to go into closed session throughout the past few years to discuss matters related to Project Clover appear to have violated the Virginia Freedom of Information Act and perhaps some other statutory provisions as well.

In particular, we believe that subsection A of Virginia Code §2.2-3712 has apparently been violated on numerous occasions by the EDA. Subsection A reads:

No closed meeting shall be held unless the public body proposing to convene such meeting has taken an affirmative recorded vote in an open meeting approving a motion that (i) identifies the subject matter, (ii) states the purpose of the meeting and (iii) makes specific reference to the applicable exemption from open meeting requirements provided in section 2.2-3707 or subsection A of section 2.2-3711. The matters contained in such motion shall be set forth in detail in the minutes of the open meeting. A general reference to the provisions of this chapter, the authorized exemptions from open meeting requirements, or the subject matter of the closed meeting shall not be sufficient to satisfy the requirements for holding a closed meeting. (emphasis added).

The Virginia Code authorizes a citizen, such as Rainwater, to bring suit to enforce these provisions and if successful, the “petitioner shall be entitled to recover reasonable costs and attorneys’ fees from the public body if the petitioner substantially prevails on the merits of the case, unless special circumstances would make an award unjust.” See Section 2.2-3713 (A) and (D).

We enclose for your review two advisory opinions, dated December 17, 2009 and March 17, 2010, from the Freedom of Information Advisory Council that reiterate that it is well established that a general reference to the subject matter of a closed session is not sufficient to meet the statutory requirements of §2.2-37l2. (See Exhibits B & C attached hereto.) Our review of the EDA Minutes throughout 2008-2009 pertaining to Project Clover (as well as other matters) leads us to conclude that the EDA has failed to satisfy the requirements of §2.2-3712 virtually every time they have gone into closed session. If the Courts agree, then the citizens of Page County have been deprived of their rights to transparent governance.

A third major concern of Rainwater, besides the EDA not properly complying with the notice provisions of §2.2-3712, is whether there was a proper need for certain of the closed sessions at all after the purchase agreement was entered into in early December 2008. See e.g. White Dog Publishing, Inc. v. Culpeper County Board of Supervisors, 272 Va. 377 (2006). For example, it seems quite suspicious and unusual for the EDA to go into closed session on December 18, 2008 “for the discussion of acquisition of real property for public purpose pursuant to Virginia Code §2.2-371 I(A)(3)” when the Chair and Secretary of the EDA had executed and delivered the Purchase Agreement on behalf of the EDA on December 10, 2008.

There are other similar examples in the EDA Minutes.

However, until a legal complaint is filed, followed up by depositions of the EDA members, we will not know the scope of such actions. See e.g. Media General Operations, Inc. v. City Council ofthe City of Richmond, 64 Va. Cir. 406 (Richmond, 2004)(meeting previously voted closed was ordered open to allow public access to the depositions transcribed regarding the closed meeting).

Continuing, a fourth major concern of Rainwater is that, based on the Minutes of the EDA, it appears that certain members ofthe EDA who may have had a conflict of interest regarding Project Clover actually attended the closed sessions. Rainwater is extremely concerned about this issue as it implicates the integrity of the entire proceedings. Weare told that issues regarding conflicts of interest have arisen in public meetings and during the recent Board elections, but as far as we can tell, nothing-not even an investigation– has been undertaken regarding this critical issue. Rainwater would like to know what, if anything, has been done to ensure that members of the EDA do not participate in closed sessions or open sessions regarding matters upon which there may be a conflict of interest. We believe there are statutory provisions in Virginia that can be invoked to prevent such occurrences and Rainwater currently looks to the Board for leadership in this regard.

The DiMuro law firm sends you this letter and the enclosed materials in an effort to inform the Board that Rainwater, (and, it seems, a majority of the residents of Page County), believe that further appropriations for the EDA for Project Clover is misguided and detrimental to the financial well being of Page County. Likewise, Rainwater feels that significant grounds exist for legal intervention, if necessary.

Rainwater is hopeful that this Board will not be bullied or pressured to continue the mistakes of the EDA and the previous Board. It is clear that there is no legal obligation for the current Board to do so, and as the enclosed appraisal emonstrates, there is no good fmancial justification to do so.

By this letter, Rainwater specifically asks the Board to answer the questions posed herein. He is willing to meet with the Chairman of the Board to discuss these matters further. Rainwater is acting as a concerned resident. He is not the enemy. He is an ally, and seeks what we assume all of you seek— the better good for Page County and fmancial accountability for all Page County residents. Rainwater asks why deep cuts are necessary in institutions such as schools, yet appropriations for Project Clover remain under consideration when it is now clear that the property’s value is less than a third of what is sought to be financed through additional appropriations. It just does not make sense.

In the interim, Rainwater will consider his options in taking whatever legal actions are available to him as a taxpayer of Page County. Such actions are not to be construed as a threat; instead, Rainwater is only preparing for circumstances if the issues outlined in this letter are not adequately addressed.

Mr. Rainwater requests that any response to this letter be sent to him through his undersigned counsel.

Page County Broadband Authority receives the BTOP $1.6 million

As reported last week that the BIP program was not funded but the BTOP was still being reviewed, the BTOP $1.6 million broadband infrastructure grant with an additional $412,000 applicant-provided match, has been approved, to deploy a 39-mile fiber network that will serve the four principal towns in Page County, Virginia, a rural and underserved area in the Shenandoah region of Western Virginia. The network expects to directly connect 29 anchor institutions including, 11 K-12 schools, three libraries, six healthcare facilities, Lord Fairfax Community College, and eight public safety institutions.

Could Page County BE the problem for getting no Businesses

In an excerpt from the EDA Minutes for December 17th 2009 meeting, Mr. Salyards of the Shenandoah Waste Management, Inc expressed his concern for not being able to use more equipment in the county.

Mr. Salyards said that he employs 30 people; he has 15-20 contractors working for him and paid out over $4,000,000 in cash payments last year. Shenandoah Waste Services, Inc. is the second largest employer in Page County. Mr. Salyards spoke to the EDA members regarding Page County’s employment demographics and the systemic problems that causes the high unemployment rate for the County. He also addressed Page County’s tax rates and how they prohibit him from utilizing all of his equipment at his business in Page County. Mr. Salyards said he spoke with Rockingham and Shenandoah counties and Page County is the only County that will actually shut down a business and limit the speed of progress. He said it is the way Page County

Looks at and treats businesses and prohibits and limits the speed of progress. He said in Page County we pay a salary for an environmental coordinator; Mr. Salyards said he answers to DEQ and does not understand why the County also needs someone who is not properly educated and trained, this is a redundancy of regulation. This is also building another wall for businesses to succeed. He asked the Authority to give him a reason why any business would want to come to Page County. The County needs to instruct their County Planner and their Building and Zoning administrators to give businesses some direction and not shut them down, but keep them working. He said to get rid of the ridiculous personal property tax rate because he cannot afford to bring anymore equipment into Page County to work. He said there is no opportunity in Page County. It is the culture that has been created in the County that if you do not work, no problem.

What to do with Project Clover

Personally, I think that Baughn brought Tong on board for Project Clover so he can get the backing of the BoS he was looking for.  With all that behind us, I have a suggestion for the land. How about using it for a new Government Center? Like the one in Prince William County? Its just a thought. What do you think?   

Special Use Permits

Listening to SpeakOut this morning, Sharon Baroncelli, a BoS from Shenandoah County was the guest host. J.D. Cave brought up an issue about Kevin Moyer, who wanted to operate a chipping mill in the Stoneyman Area. J.D. said that the Special Use permit was fulll of hoops for Mr. Moyer to operate the mill. He looked at Shenandoah County and they welcomed him there, partly because the welcome new businesses. My question is this. Will this, and if yes how, affect Project Clover? If the county is so desiring, wanting to bring in businesses, will the Planning Commission “ease” up? Will they be biased as to whomever they want to settle here? Wherever a business, such as a chipping mill is in a close proximity of residential area, there are going to be complaints, especially noise complaints. Look at Wrangler, Shenandoah Race Track.

Can Page County, Va be Fixed?

Page County, Va., to an outsider, this place is filled with people you see in tv movies. Folks sitting on their front porch after a hard day of work, town folks catching a glance and speaking hello to a stranger. Kids riding their bicycles or skateboards where they not supposed to, but the law says nothing until someone complains. Life seems simple here. There isn’t the hustle and bustle of the city, sirens not going off at all hours of the night, there may be a few hotrodders going up and down the road, but nothing to serious. Kids are hanging out in the parking lots until they are runned off and you will see all kings of folks walking in their town, either to lose weight and get some exercise or just to take a walk and to talk with the passerbys. Unless you live here, you do not know how those that are elected to run the county really are. Basically, what goes wrong with the county is the citizens fault. We are the ones that voted those to run the county. But when the job is not up to par, we also have the right to have them removed. Project Clover is the latest scandal to hit Page County. It is getting bigger than the Danny Presgraves’ scandal with the sheriff’s dept. Ever since I can remember, there is always some sort of “stupidity” that the Page County BoS ends up doing. I remember as far back as to when the county lost $200,000 in a “illegal” investment scheme. The scheme was legal to regular people, but illegal for localities because at the time, it was not on a list of approved investment ventures. I am sure the thinking was to make money in a hurry. Good idea. The kicker is that the county for several weeks tried, unknown to the citizens, to reduced the school budget $200, 000 to cover the lose. Boneheaded move especially when most of the elected memebers just ran on the “better education” platform to get elected. I was told recently that  there was a candidate that got elected because he promised to abolish the building codes. No more comment on the way of thinking on this one, this one can speak for itself and I can only imagine.

The new schools discussion went on from the time I was  in school until two new schools were built. One school idea kept getting shot down because mostly it was “I don’t want my kind going to school with your kind” mentality. Finally we have two new high schools which probably came 10 years too late. The recent contraversy surrounding that was that the county needs a county administrator building and they would not have the avaliable space at their current location unless the building they are in is demolish, but it can’t be because if the county vacats the premises, it will be reverted back to the school. So now they are still operating out of a nearly condemned building. Do you feel the love there?

Then there is the scandal where at one time, the BoS had went to a lot of “retreats” to “discuss county issues”.

Probably the most memorable scandal, and you cannot miss it if you are traveling west bound 211 from Luray is the Battle Creek landfill. The sale job tactics the county used was phenominal. Actually, it was not a bad idea. The county could had actually profited from it. Instead, the county was scammed by Tellurian that eventually sold out and went bankrupt and left the county with tremendous amout of violations and fines.

You would think that the county would had learned from that. They may have. Perhaps that is the reason why now, the BoS has itself in a middle of another scandal, Project Clover. This one was quite, under the radar. The plan was to build a business park. The idea was prepared by the Page County EDA and the county was to back them. The only problem is, that a very small amout of the residents knew of such plan. What is causing the ruckus is that no citizens were asked about the area the EDA plans to buy with taxpayers money, and there were no vote on using the taxpayers money. Instead, the money was “shifted” to the EDA. All was quiet until the story broke on a local blog website. Now the EDA and the BoS is on its heels in trying to explain what is going on, but documentation recorded by the county states otherwise. Building a business park is not a bad idea. Other options needs to be discussed and there are folks in this county that does know how this works. Working together is the only solution to getting this done.

Perhaos the BoS is staring to realize that the citizens are starting to “arm” themselves with information and know that they may no longer be able to pull the wool over our eyes. If the citizens in the future show up like they have been in the past few months, whether to applause or criticize the efforts of our elected officials, then Page County can be fixed. The only thing is, politics is politics. A candidate will almost always run on a platform the majority wants to here just to get elected.

To be more honest, to have a fruitful government, those that are elected needs to put in more time and effort. In order for that to be done, they need more pay. In my opinion, if the BoS was paid a yearly salary, then they would find more time to commit than to wait at the last minute to make a decision. Then a better community could be formed.

Projct Clover. Is it going to be another landfill type story?

In the Page News and Courier today, Lowell Baughn was allowed almost another page to eplain the goals of the EDA. Also, he had touched on the Project Clover. This may be a losing battle once all the truth comes out. Alice Richmond had touched on the opposition to the buying of the land currently owned by Rebecca Graves Hudson. The problem now may be if those that oppose this deal are elected to the Board of Supervisors by the years end, will the taxpayers be left to foot the bill? The contract says that the county government have no obligation to this deal. So, who is lying? Is there any other businesses besides PTS that is going to build on this land?