Background: The 1974 Land Acquisition
In 1974, Thora Scott Ronalds McElroy and Donald A. McElroy conveyed over 2,000 acres to Brown & Root, Inc. The deed included:
- North Tract (195± acres): Located in Cape Charles, containing Kings Creek Farm, Kings Creek Marina, Northampton Country Club (9-hole golf course), undeveloped agricultural land, vacant lots, and significant Chesapeake Bay frontage
- South Tract (1,762± acres): Located in Northampton County, known as Hollywood Farms
Originally intended for industrial use following the 1973 OPEC oil embargo, Brown & Root later changed plans to develop a residential and recreational community called “Accawmacke Plantation.”
The Annexation Process (1990-1992)
Initial Agreement (March 13, 1990)
Brown & Root and Cape Charles entered into an agreement where:
The Town agreed to:
- Petition for annexation of the South Tract
- Provide municipal services to the annexed area
- Maintain tax assessed values until occupancy permits were issued
- Extend water and sewer capabilities to Brown & Root properties
- Reserve sufficient utility capacity for the full development
Brown & Root agreed to:
- Pay for physical expansion of water and sewer systems beyond existing capacity
- Construct necessary infrastructure improvements
- Dedicate treatment system improvements to the Town
- Build roads to state standards
Key Legal Documents
- March 26, 1990: Town filed annexation petition
- November 25, 1991: Amended agreement addressing Commission concerns
- November 25, 1991: Settlement agreement between all parties
- July 14, 1992: Second Amendment to Agreement
- January 1, 1992: Annexation became effective under Law No. 27
- April 21, 2023: Third Amendment restructuring utility obligations
Property Transfers and Development (1997-2012)
Corporate Succession
- 1997: Brown & Root sold to Baymark Construction Corporation
- 2000: Baymark assigned rights to Bay Creek, L.L.C.
- 2001: Bay Creek Marina & Resort, LLC (BCMR) acquired North Tract development rights
- 2008: Keyser-Sinclair (Sinclair Broadcast Group subsidiary) acquired controlling interest in Bay Creek South
Development Issues
- Marina Village East: 118 residential lots approved in 2004, but development discontinued in 2006
- Infrastructure failures: Required surety bonds for construction were never posted
- Utility capacity: Town faced wastewater treatment plant capacity constraints by 2009
- 2012 foreclosure: Bay Creek Marina and associated businesses foreclosed due to loan defaults
Ongoing Legal Obligations
Annexation Order Law No. 27
The annexation created permanent legal obligations that “run with the land” and bind all successors:
- Utility Infrastructure: Developer must pay for water/sewer system expansions and upgrades, including tertiary treatment improvements
- Road Improvements: Developer responsible for Route 642 connector road costs
- Reserved Capacity: Town must maintain utility capacity for full development buildout
- No Statute of Limitations: These obligations are permanent legislative acts, not contractual agreements
2023 Third Amendment: Modified Developer Obligations
On April 21, 2023, Bay Creek South LLC, Bay Creek Development LLC, and Bay Creek Resort LLC entered into a Third Amendment that significantly modified the original utility infrastructure obligations:
Key Changes:
- Impact Fee Structure: Developer now pays $3,000 per lot as each is conveyed to third parties, rather than funding major infrastructure improvements upfront
- Franchise Agreement: Town entered into agreement with Virginia American Water Company to operate water/wastewater facilities
- Tariff Compliance: Payment of standard utility tariffs plus impact fees satisfies remaining developer obligations for facility expansions
- Retained Obligations: Developer still must construct necessary physical improvements within properties and dedicate them to the Town
Implications: This amendment effectively shifts the infrastructure financing model from large upfront developer investments to a per-lot fee system, potentially reducing the developer’s total financial exposure while providing ongoing revenue to support utility operations.
Current Status
- Kings Creek Marina: Now operates independently but remains subject to PUD restrictions
- Incomplete Development: Only 873 of planned 3,000 units have been platted
- Utility Operations: Virginia American Water Company now operates Town’s water/wastewater facilities under franchise agreement
- Modified Obligations: 2023 amendment restructured developer payments to $3,000 per lot impact fees rather than major upfront infrastructure investments
Key Concerns
Enforcement Failures
The essay argues that both Cape Charles and Northampton County have failed to enforce:
- Municipal PUD ordinances
- Required infrastructure improvements
- Annexation agreement obligations
- Developer surety bond requirements
Financial Impact
- Town residents face increased utility costs due to unmet developer obligations
- Federal stimulus funds and state loans used for wastewater plant upgrades
- Property taxpayers bear costs that should have been developer’s responsibility
Law No. 27 creates permanent, enforceable obligations that the current Declarant/Developer must fulfill. The failure to enforce these obligations has shifted financial burdens from developers to local taxpayers, representing a significant breach of the annexation agreement’s intent.
The complex chain of property transfers and corporate restructuring has not eliminated the fundamental legal obligations established during the 1990-1992 annexation process, which remain binding on all current and future property owners within the former Accawmacke Plantation development.
About the Author
Thanks for the cut down explanation.
Don’t know why there’s not more taxpayer outrage over this. This is just one of many boondoggles, like selling the old school for $10 and now looking to build a new municipal center, (who saw that coming? LOL) etc. That makes one wonder what the heck people are thinking… I moved out of that town back in the 90’s when crack baggies, condoms and empty beer cans had to be removed from the sidewalks so the children wouldn’t pick them up. That was a time when CC was at it’s worst; housing was in serious decline and a lot of properties were in dire need of TLC. While I’m happy there’s new pride in property ownership, the new CC just hits different. It’s not the quaint little CC it once was back in the 60’s, 70’s and 80’s. It feels more like a tourist destination with prices for everything to match. If that’s what the town was going for they’ve nailed it. Like an Outer Banks but without the ocean! I’m grateful to have grown up in that town but I guess memories are all that I have and that’s going to have to do. How many of you remember parking on the beachfront and watching the sunset? Those dunes, ugh, don’t get me started…