Scott free: Bundoran could take LLC loophole
Amid huge fanfare last spring, gentleman farmer Fred Scott and New Hampshire developer Bob Baldwin announced the impending sale of Bundoran Farm, 2,200 acres of pristine Albemarle County property in North Garden.
"Wow!" people exclaimed. "How much?"
"We're not revealing that at this time," said Baldwin, president and CEO of the buyer, New Hampshire-based Qroe Farm Preservation Development. Baldwin added that the deal "wouldn't actually close until May."
Well, the deal didn't close in May, and Baldwin and Scott may not have to reveal the sales price– ever.
On June 29, two days before a law went into effect closing a popular property tax loophole, Scott transferred title to 1,829.159 acres in North Garden to "Bundedge LLC."
While Scott could not be reached for comment, Baldwin insists that Qroe has not yet purchased Bundoran Farm. "That transaction has nothing to do with me," he says. "It's not something I can address."
Curiously, however, the deed of sale gives the address for Bundedge LLC as 40 Lane Road in Derry, New Hampshire– the address Qroe Farm lists as its own.
By transferring the property to an LLC, or Limited Liability Company, Scott can escape paying Albemarle County recordation and transfer fees. In addition to providing the County and state with revenue, the amount of those fees– which might have topped $100,000– can be used to reveal the price of a transaction that sellers and buyers would otherwise like to keep private.
Baldwin says Qroe's purchase of Bundoran Farms is set for mid-August, "when all the paperwork is completed."
If Qroe is an owner of Bundedge, however, no deed will need to be recorded to shift the LLC's ownership, and there may be no record of the transaction.
"It will be recorded," Baldwin insists. "We'll announce the sale, and we'll be happy to talk about it then."
In contrast to this Bundoran maneuver, the buyers and sellers of Castle Hill, a 1,200-acre Keswick property that changed hands one day earlier– and was just as eligible to take advantage of the loophole– did not go the LLC route. Consequently, that $24 million deal delivered $176,886 in various recordation taxes and fees for the county.
Another problem with transfers via Limited Liability Corporations– and one reason Del. Mitch Van Yahres sought successfully to end the tax dodge– is that such secret transactions deprive the County assessor– and owners of property in the neighborhood– from determining the true market value of a piece of land.
Baldwin says that a Qroe representative, David Hamilton, is already living "off and on" at the Bundoran site preparing plans for the development. Baldwin also promises that Qroe's traditional preservation philosophy– leaving undeveloped at least 80 percent each property it has purchased in the past– will prevail at Bundoran.
While that means that as much as 1,465 of Scott's North Garden acreage might remain untouched, that leaves 365 acres that may soon be covered with roads and houses on one-half to one acre building sites.
Bundoran Farm is located in North Garden.
MAP COURTESY OF QROE
Qroe vows to keep 80 percent of Bundoran pristine.
PHOTO COURTESY OF QROE