'Debt of gratitude': Kaine thanks Biscuit Run sellers, not taxpayers
In an event attended by dozens of movers and shakers including Dave Matthews Band violinist Boyd Tinsley, Governor Tim Kaine visited Monticello Friday, January 8, to announce his administration's success in securing more than 425,000 acres of Virginia land for conservation, particularly lavishing praise upon the previous owners of 1,200-acre Charlottesville-area residential development-turning-state park Biscuit Run.
Kaine thanked numerous agencies for helping the state purchase the property in southern Albemarle County for what he called the "bargain scenario" of $9.8 million on December 31. Still unclear, however, is the appraised value of the land, for which Biscuit Run owners will be entitled to a 40 percent tax credit, an additional–- but unrevealed–- cost to taxpayers.
"We owe a debt of gratitude," Kaine said of the Biscuit Run deal, "and it starts with the landowners."
Biscuit Run was purchased in 2005 by Forest Lodge LLC, a consortium headed by developer Hunter Craig and including members of the Dave Matthews Band, for a reported $46.2 million. It was planned as the site of some 3,100 homes, but with the economy tanking–- and an estimated carrying cost of more than $300,000 per month–- Forest Lodge seemed to be running out of money back in November when Bluefield-based First Community Bank told shareholders a $34 million loan was in "early stage delinquency." Less than two months later, with the state's purchase of the property, it wasn't clear how–- or if–-the bank would be repaid, nor was it clear what the property is now actually worth.
Developer Richard Spurzem says he believes the actual current value of Biscuit Run is closer to $20 million– less than half the speculators' purchase price–- and he points out that while $9.8 million is indeed a bargain price, it's not the only money citizens will end up paying out. There could be $14 million in tax credits, if the property is appraised at its most recent sales price of $46 million. And there are still the millions of dollars of improvements needed to convert a farm into a state park, including roads and other infrastructure.
Spurzem says he believes Biscuit Run as a development was doomed at least in part by developers' decision to rezone the property to allow higher density. That, he says, allowed the county to extract proffers–- including schools and roads–- "to the point that it made the property not viable." He says a similar situation has unfolded on a smaller scale with a 244-acre farm in Gordonsville he sold to a Fredericksburg developer in 2007 for $5.6 million.
"I think it's worth about half that now," he explains, adding that, like Albemarle, Orange County also extracted millions of dollars in proffers that make it impossible for the new owners–- the Silver Companies–- to move forward.
Jud Honaker, president of Silver Companies' commercial division, says that while the Gordonsville property is a residential development that he does not oversee, a tax credit "nightmare" began when Silver put 430 acres along the Rappahannock River into conservation. Three years later, says Honaker, the state suddenly revoked the tax credits claiming the appraisal wasn't valid, leaving Silver Companies to deal with hundreds of individuals who'd purchased the credits and who now owed back taxes.
"It's cost us two million dollars and taken three years," says Honaker."You're trying to do the right thing, and that's the way you get treated? We'll never put land in conservation again."
Former Biscuit Run owner Hunter Craig has not returned a reporter's calls and did not answer press questions at today's event. Spurzem, however, says the decision to put Biscuit Run into conservation likely came after owners considered all options. While he doesn't believe any of Biscuit Run's investors "came out whole," he says the deal with the state likely staunched a hemorrhage of investors' money and helped them recoup some if not all of their investment.
Asked the appraised value of Biscuit Run, which would determine the value of the tax credits, Kaine demurred, mentioning the 2005 purchase price and insisting that for tax credit purposes, there is currently no appraised value for Biscuit Run. "There are no guarantees" for the former owners, the governor said, noting that the tax credit question will be worked out privately in coming months.
Earlier, Kaine spoke proudly of his and his staff's efforts to beat a goal set in 2005 of 400,000 additional acres in conservation by the end of his term. A map highlighted more than 20 such conservation acquisitions including several state parks and additional state forests.
Tinsley, whose presence at the event was the first confirmation that any Dave Matthews Band members held a stake in Biscuit Run, praised Kaine for his focus on conservation during his term as governor, which ends this month.
"Tim," said Tinsley, who referred repeatedly to his personal friendship with the Governor, "has always been concerned and passionate about quality of life for Virginians in general." Claiming he'd only known for three weeks about the possibility of Biscuit Run becoming a state park, Tinsley says he was "delighted" when he heard of the plan.
"It was a very pleasant surprise," he said. "Any loss we've taken pales in comparison to the contribution we've made to the community.
While Kaine was lavish with his praise of landholders' generosity, he was less specific in his praise of taxpayers, who are subsidizing the new park and who–- because of privacy laws–- will never be entitled to see the appraisals and consequently the benefits of the Biscuit Run transaction to the land speculators.
"The preservation of open space," Kaine said, "is for the public good."
–Correction: Orange County, not Fluvanna, extracted proffers for the development Richard Spurzem sold in 2007.