Show off your holiday lights and you could win an iPad! Enter your photo by December 13. Winner will be selected by popular vote.
The town settled a lawsuit over land it had seized to construct a new water tower.
Wednesday, July 10, 2013
The town of Iron Gate has had to mortgage its town hall, raise taxes on cigarettes and lay off part-time workers to pay the settlement in a lawsuit over its use of eminent domain.
In a mediated settlement, the town agreed to pay $115,000 to a private landowner from whom it had seized land for a water tower to improve the town’s water system.
Though the cost of the tank was covered by grants, it ended up costing $150,000 more than anticipated after the settlement and associated fees, Mayor Alan Williams said. That’s equal to half the town’s annual budget.
“There’s been some sleepless nights over this thing,” Williams said.
But the landowner, Jim Martin, called the whole situation an unnecessary waste of time and taxpayer money.
“The taxpayers took a beating because of the stupidity of the mayor and the town council,” he said.
Martin, 65, said the land, which he bought to subdivide and sell to fund his retirement, was radically devalued by the construction of the water tank.
“The mayor wanted to prove that he could take what he wanted,” Martin said. “It was an ego trip.”
Williams, in turn, said Martin was “after one thing: money.”
The dispute dates to 2009, when the town took action to shore up its water system. The town’s old water tank, built in 1936, was too small, leaked, and was about to be cited by the health department, Williams said.
Williams, who functions as a town manager, landed grants to pay for engineering studies to find a site for a new, larger tower. The town also won a $700,000 grant of federal stimulus money to construct the 250,000-gallon tank.
The town chose a site on the mountain above town so the water system could be gravity-fed, and so it could also serve a subdivision nearby in Alleg-hany County, Williams said.
The land turned out to be owned by Martin, though there was initially a dispute over that.
“We never wanted to get into condemnation,” said Will Hancock, the town’s attorney.
But Williams said time was running out to begin the project or the town would lose the stimulus money, so in September 2010 they filed a claim to take nearly an acre of Martin’s land near the only access road to the property, and the tank was constructed.
In August 2012, Martin filed an inverse condemnation claim against the town, alleging that the construction of the water tower went outside of the land taken, effectively taking more of his land.
An appraisal produced for Martin found the value of the land dropped by half — from $440,000 to $220,000 — because the location of the tank destroyed the appearance of the only entrance to any future development there.
In February, both parties agreed to send the case to a mediator.
Williams said he thought the town could have won the case at trial. Hancock, the town attorney, believed it could have gone either way.
But Virginia law strongly protects landowners in eminent domain cases, Hancock said. If a court finds the price paid for taken land should have been even one-third more, the condemnor must pay all of the landowner’s costs in challenging the condemnation.
If a court had ruled the town should have paid Martin just $700 more, the town would have been responsible for all of Martin’s costs.
“Rolling the dice just didn’t seem to be the thing to do,” Hancock said.
Josh Baker, one of Martin’s lawyers, said, “If more care had been taken on the front side … it may never have been such an issue.”
Hancock didn’t agree, but said, “It probably would have been wise to have mediated this case sooner.”
To pay the settlement, Williams said, the town cashed in a certificate of deposit for $55,000. The town hall, built a few years ago and already paid off, was used as collateral to secure a five-year loan to pay the balance. The cigarette tax increase, from 10 cents to 20 cents a pack, and savings from the layoffs, will make the loan payments, he said.
The settlement also reduced the size of the taken land to about a quarter-acre.
Williams said he has no
animosity toward Martin, who like Williams grew up in the town.
He noted that in the end the water tank project delivered access to water, power and fiber-optic lines to Martin’s land, all of which will benefit any development there.
If he was on an ego trip, Williams said, “I’d have told council, ‘Why help him out?’ ”
He suggested Martin was not only greedy but out to cause the town to lose the stimulus money.
“He punished the citizens down here,” Williams said.
“I’m not trying to break the town,” Martin responded. If he just wanted money, he said, he would have taken the case to trial. The settlement he won will just cover attorney fees and the cost of building a new access road to his land, he said.
Martin balked at the idea that he’d come out as the winner in the case.
“I don’t think there was any winners,” he said. “I think anybody that pays taxes was a loser.”
Weather Journal7 wintry scenarios for Sunday