Land clearing was underway for Roy E. Carroll II's Horse Pen Creek Village, a planned retail and apartment complex in a newly annexed section of northwest Greensboro, last summer.
The city of Greensboro could be faced with a second lawsuit from a Greensboro developer if it proceeds with condemnation proceedings to install sewer lines from a property in a newly annexed area of the city’s northwest fringe.
Kotis Properties has rejected the city’s offer of $37,750 for the land, and the company’s lawyer is trying to leverage the dispute into action by the city to force an adjacent developer, Roy E. Carroll II to allow it more access to a planned road that bisects the two properties. During a city council meeting on Dec. 15, Kotis properties lawyer Charles Winfree said his client would give the property needed for the sewer line to the city free of charge if the city took action to open up access to the planned Jessup Grove Road extension. City Attorney Terry Wood responded at that time by saying that the city does not have authority to take property from Carroll’s company, Horsepen Village Commercial LLC.
Asked if Kotis Properties might file a second lawsuit if the city proceeds with condemnation, Winfree said on Tuesday: “That’s conceivable. We could.”
Much of the sewer line would serve Kotis Property’s land, Winfree acknowledged, but he said a small portion of Carroll’s property would also benefit. The city is required by state law to extend the sewer services to properties within two years of annexation. That deadline is approaching in about six months.
“I don’t think we’re inclined to require the city to pay us a bunch of money when there’s a better solution — make this part of the right of way,” Winfree said. “We won’t voluntarily consent to the condemnation if the city won’t enforce its ordinance.”
Kotis Properties contends that a 4-by-709 foot strip separating the planned road from property it owns, constitutes an illegal reserve strip, commonly known as a “spite strip,” and violates the city ordinance 30-6-13.3(E), which holds that “reserve strips adjoining street rights-of-way for the purpose of preventing access to adjacent property shall not be permitted under any condition.”
Kotis' property is zoned for office park.
The city’s technical review committee, made up of staff from different departments, approved a plan submitted by Carroll in April that allows Kotis to access the road at the end of the 709-foot strip. Winfree said his client objects to Carroll controlling where it accesses the road, and believes it would make more sense for Kotis to have access across from two curb cuts on Carroll’s side of the road. The two curb cuts for Carroll’s proposed Horse Pen Creek Village come before motorists would reach Kotis’ drive point after turning onto the new road from Horse Pen Creek Road.
Kotis Properties sued Carroll’s company and the city over the placement of the strip in June. The city responded by citing a Massachusetts court ruling that where proposed reserve strips “merely prevent partial access,” they are not at variance with the ordinance.
The court opinion in Johnson v. Foreman that is cited by the city suggests that regulation of roadway intersections entails both a concern for the interests of the public that will use the roads, along with a concern for balancing the rights of property owners. The court opinion states that the Massachusetts regulation
... was intended to promote free, efficient and safe movement of vehicular traffic within the subdivision, and to promote vehicular traffic between subdivision roads and adjoining streets and properties. This regulation targets the practice of placing thin ‘spite’ or ‘reserve’ strips of land at the ends or edges of subdivision roads to frustrate their use by abutting landowners.
Winfree said the current street alignment is impractical.
“If this stands, you could end up with a cul-de-sac within feet of the road,” he said. “In addition to being a complete waste of asphalt, it creates a lot of unnecessary driving and confusion.”
Gillean Smith, a spokeswoman for Carroll, said her client could not comment because the lawsuit remains unresolved.
Political considerations
The revelation that at-large Councilman Robbie Perkins exchanged text messages with Carroll using his Blackberry during Winfree’s appearance before city council on Dec. 15 has created a flurry of indignation on the Greensboro blogosphere. At the end of the exchange, Perkins expressed the opinion that Wood was “forthright” in his opinion that the city could not intervene to give Kotis additional access to the planned road, and suggested that Carroll “go toe to toe” with Marty Kotis, the president of Kotis Properties, at the next council meeting.
Kotis Properties’ lawsuit against the city and Horse Pen Commercial LLC broadly alleges that Carroll exercised improper influence over the city staff and city council in obtaining approval for the site plan.
Perkins recused himself from voting on the rezoning of the property for the future Horse Pen Creek Village in April 2008 “due to a financial conflict of interest,” according to minutes from the city council meeting.
Perkins' real estate company, NAI Piedmont Triad, is currently marketing commercial properties in Carroll’s Center Pointe high-rise in downtown Greensboro.
“I can’t speak for any other council member, but I did not make any contact with staff on Carroll’s behalf,” Perkins said in a recent interview. “That’s between the developers, their engineers and the staff. I’m not even privy to what they’re submitting to the city.”
Winfree indicated that he will be looking for evidence that Perkins was improperly involved in the technical review committee’s decision.
“He has a financial interest in this project, which is why he recused himself from the zoning case,” Winfree said. “That doesn’t prove he did intervene, but it proves he has a motive to intervene. We thought this approval was the result of improper influence over staff or city council.”
Also creating the possible perception of conflict of interest is the fact that employees of Kotis Properties poured thousands of dollars into the campaigns of members of the sitting council during the recent election. Five council members, including Perkins, Mayor Pro Tem Nancy Vaughan, District 2 Councilman Jim Kee, District 3 Councilman Zack Matheny and District 4 Councilwoman Mary Rakestraw, received campaign contributions ranging from $250 to $2,500 from Kotis Properties employees.
Carroll and his wife, who contributed $6,965 to city council candidates during the 2007 election cycle through their North Carolinians for Leadership in Government PAC, made a comparatively modest outlay in this year’s election. The couple contributed a combined $350 to Perkins’ campaign.
George Hartzman, an unsuccessful candidate for the District 3 seat, said every one of the council members who accepted contributions from Kotis Properties was aware of the company’s lawsuit against the city, because Hartzman requested a copy of the city’s response, and city staff provided the document to all candidates.
Hartzman described the dispute between Kotis Properties and Carroll as “a nitpick between two very powerful people who have basically funded in part the political campaigns of many of the people sitting on the city council.”
Despite a possible perception of conflict of interest, those who accepted contributions from employees of Kotis Properties will be required by law to vote on the proposed condemnation.
“According to the letter of the law if they received campaign contributions the law does not find a direct financial connection,” Hartzman said. “I totally disagree with that. Whoever receives the most money generally wins. That’s a financial interest because their salary is tied to the campaign contributions. It’s not illegal, but I think it’s wrong.”
Winfree said his client’s campaign contributions are insignificant compared to the money at stake in Perkins’ business dealings with Carroll.
“I don’t think the Kotises give expecting any favor on any particular issue, but I expect their contributions are small potatoes compared to the commissions that Mr. Perkins earns in marketing Mr. Carroll’s properties.”
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