“Work sessions, meetings whatever, er, if this helps you feel better and sleep at night so be it. Bay Creek will never pay the town a dime and in your heart of hearts you know it too. Cape Chuck sold it soul long ago to Brown & Root, Dickie Foster and now will end it all with the Baldwins. Karma, Karma, Karma.
Note by Cape Charles Mirror: You are probably right.” — a comment posted to a story published in the Mirror back in August.
The Cape Charles Town Council attended a work session on Thursday regarding the 1991 Annexation agreement between Brown and Root and the town. The agreement led to the creation of the PUD and resort we know as Bay Creek. The PowerPoint presentation was led the town attorney Mike Sterling of Vandventer and Black.
The presentation lasted only about 45 minutes and left out as much as it put it put in. The ‘overview’ glazed over the historical context and seemed more geared to letting the council know that they really do not have to do anything regarding the terms, conditions, and obligations laid out by the agreement, which is a legislative act of the State of Virginia known as Law No. 27. As a note, that fact that the agreement is law was never mentioned by Mr. Sterling.
- Here are some major points missing from the presentation:
Under the Virginia Property Owners’ Act (POA), the Declarant is also described as the ‘developer’. Bay Creek South, L.L.C., and Sinclair agreed in March 2008 to become responsible, by deed recorded with the Clerk of the Northampton Circuit Court – ‘Declarant’ for all of the obligations and assurances made by Brown & Root in 1990 and 1991, as part of Brown & Root’s efforts to have the Town of Cape Charles annex a significant portion of Northampton County into the Town. Brown and Root had a proposed industrial site in the County (begun in 1970’s in reaction to the then Oil Crises). Brown and Root also owned over 50% of the vacant and undeveloped land in the adjoining Town of Cape Charles. Brown & Root sought and successfully achieved its goal of combining the two significant parcels into one PUD then known as Accawmacke Plantation, now known as Bay Creek at Cape Charles. Brown & Root’s lawyer also acted during the annexation proceedings as counsel to the Town, before, during and after the Annexation Order was issued November 25, 1991. In Virginia, Annexation Orders of the Virginia Special Annexation Courts (appointed by the Virginia Supreme Court) become Legislative Acts – and the Annexation Order was and remains Law No. 27, filed in both the Virginia Legislature and the Northampton County Circuit Court. This premise and the recorded obligations and promises are extremely important to the residents of the Town, the County as well as the U.S. and Virginia taxpayers.
- Why? Because Sinclair in its own agreement with Baymark Construction Corporation (the original purchaser and obligator in 1998 to the Brown & Root agreements) purchased from Baymark all of the interests in Bay Creek South and filed to become the Second Successor Declarant – obligating Sinclair to the Annexation Order Agreements. Now after many years of attempts by the Town and by factual misrepresentations made by the County to the Virginia Department of Transportation, Sinclair is and has not followed the stipulations in the Annexation Agreement, nor the findings published by the Commission on Local Government – February 1991 (CLG) incorporating those such agreements.
- The precise language in the CLG report is on pages 62 & 63 TERMS AND CONDITIONS FOR ANNEXATION.
- In March 2008, Sinclair during its quarterly public filings acknowledged it had purchased the controlling interest in Baymark (Bay Creek South, L.L.C.) and was in ‘control’. Baymark and its controlled subsidiary Bay Creek, LLC lost control due to its own inadequate financial schemes. Neither Baymark, Bay Creek nor Sinclair followed the federal guidelines for sale of land to purchasers as required under Federal Law, The Interstate Land Sales and Full Disclosure Act. That evidence was made clear in the Virginia Beach Circuit Court in 2012 – it remains unknown if Sinclair ever corrected this under the ILSFDA.
- Sinclair has refused to pay the Town for its share of water and wastewater demands of the Bay Creek development for the required Virginia upgrades and expansion of the old and dysfunctional Town of Cape Charles’ wastewater treatment plant, as clearly found in the Commission on Local Government’s Report (attached) and Annexation proceedings. The U.S. taxpayer, through an Obama stimulus bill and the residents of Cape Charles, through borrowings from the EPA, Virginia State loans, and significant increases in the Town’s water, sewer and connection fees, has paid for the required upgrades of the old plant which was and remains a contributor to an unhealthy Chesapeake Bay. The replacement plant is undersized for the required new 1,900+ homes planned to be built in Bay Creek, which under the PUD allows for 3,000 homes. Only 973 have been approved for platting, yet subdivisions are not yet built nor completed.
- Sinclair did not pay for the highway extension across its and its POA’s property (The Martin Parcel), the Virginia state taxpayer has paid the bill.
During the discussion, Sterling noted that the agreement “runs with the land”, that is, the agreement is binding on all purchasers. However, when he talked about the connector road, the extension through the Martin Property, Sterling stated that since VDOT had already paved the road, that part of the agreement was not mute. The Mirror disagreed:
On September 9, 2016, the Cape Charles Mirror contacted the Virginia Department of Transportation regarding the Route 642 connecter road project in Cape Charles, sometimes referred to as the “Harbor Access Road”. The Mirror submitted a series of questions, and on November 21, 2016, VDOT sent the following responses (VDOT responses are in italics):
I.Have VDOT attorneys reviewed the Annexation Agreement between the Town of Cape Charles and then developer Brown and Root?
VDOT attorneys neither reviewed the Annexation Agreement nor were they aware of any obligations thereto, prior to or at the time of the project. As a result of this inquiry, our attorney obtained and reviewed the Annexation Agreement.
II.Does Bay Creek South, LLC, as successor in interest to Brown & Root, Inc., Brown & Root I, Inc. and Kellogg, Brown & Root, Inc. as developer and primary owner of Bay Creek, have an obligation to construct VDOT Project No. 0642-065-577 (UPC103391) at its sole expense?
VDOT believes that Bay Creek South, LLC has a legal obligation to construct VDOT Project No. 0642-065-577 (the “Project”) at its sole expense.
The Annexation Order entered by the Circuit Court of Northampton County on November 26, 1991 and recorded among the land records of Northampton County on December 9, 1991 in Deed Book 252 at page 649, obligates Brown & Root I, Inc. to “construct or have constructed a new two-lane access road into its development to accommodate traffic from [Bay Creek, formerly known as Accawmacke Plantation], provided the necessary land and easements are acquired and providing all necessary permits are obtained.”
The Report of the Commission on Local Government on the Town of Cape Charles – County of Northampton Annexation Action dated February, 1991 (the “Report”), which was incorporated into the Annexation Order by reference, contains strong language providing the justification for placing the burden to construct and pay for the Project on the developer of Bay Creek. There is also a referenced Agreement between Brown & Root I, Inc. and the Town of Cape Charles (the “Town”) dated March 13, 1990 (the “Developer’s Agreement”), an Amendment to the Developer’s Agreement dated November 25, 1991 (the “Amendment”) and an Agreement between the Town, Northampton County (the “County”) and Brown & Root I, Inc. dated November 25, 1991 (the “Town-County-Developer Agreement”), all of which are incorporated by reference into the Annexation Order or Amendment.
III.Why didn’t VDOT know about the Annexation Agreement between the Town of Cape Charles and then developer Brown and Root?
There are 3 project parcels at issue, Parcels 004, 006 and 010.
Parcels 004 and 006 were handled by Northampton County. Acquisitions activity on these parcels, including Title research, was not performed by VDOT and the title report reviewed by VDOT did not reference the existence of any proffers.
Although VDOT did handle Parcel 010, in searching for the existence of proffers, VDOT must rely on the responses from localities where any such proffers might be present. We ask for written responses from Planning Departments as part of our diligence. VDOT asked the County to provide any information regarding zoning restrictions, special use permits, unrecorded proffers and open zoning cases concerning parcel 010 and we were told that none of those were applicable to Parcel 010. As a result, any related Annexation Agreements were not known to us.
On November 22, 2016, The Mirror responded (italics):
Thank you so much for the response, it is much appreciated. Given VDOT attorneys feel the developer has a legal obligation to construct VDOT Project No. 0642-065-577, what are the next steps? Will there be a stop work order while this is hashed out? One question the attorneys should ask is why VDOT was not made aware of the annexation agreement by the Mayor and Town Council of Cape Charles, as well as Northampton County, and was allowed to fund this project using taxpayer funds when they were fully aware of the agreement between the town and then developer Brown and Root. I can provide correspondence going to back to 2004 which can verify this. Also, the current County Attorney should have been aware since he was the person that signed the annexation agreement in 1991.
VDOT contacted the Mirror on January 12, 2017 at 9:00 AM per Paula Miller, Communications Manager for VDOT Hampton Roads. While VDOT attorneys agree that the developer Bay Creek South should be funding this project in whole, since they were not party to the agreement, their hands are tied in terms of enforcing it. According VDOT, only the Town or the County can enforce it. The Mirror asked how VDOT came to its determination, as well as whether it was their decision not to attempt to find out why they were not made aware of the Annexation Agreement during planning phases. This information was not available at the time.
In the audience was developer Eyre Baldwin. During questioning, Mr. Baldwin got Sterling to admit that, in his view, since the agreement happened so far in the past, it was not germane to events now taking place in the Town of Cape Charles. There may be some truth to this.
Last winter, Mr. Baldwin asked the Mirror just what the point of all this coverage of the Annexation agreement was all about, what did we really want out of it. We told him, “It’s kind of like buried treasure, like Poe’s story The Gold Bug…we just want to know the truth…we want someone to tell us we are wrong, someone in authority, not our lawyers, but the State’s lawyers. Once that is settled, we will shut up for good.”