Update 31 December 2009:
Charlottesville Tomorrow reports that the purchase price was $9.8 million dollars. If nothing else, this transaction proves that government does have the ability to move expediently and efficiently. Read the whole story.
In short,
There will be much more to come on this story in the coming days and weeks.
More at the Charlottesville Bubble Blog and cvillenews.
Asked about the financial impact on investors who paid a reported $46.2 million for the land in 2005, Payne said “the investors will not come out whole and no one is getting a windfall.â€
According to the deed records, Craig intends to pursue Virginia Land Preservation Tax Credits and federal charitable deductions. The state credits are an incentive for property owners to permanently protect undeveloped land and are available for 40 percent of the appraised value of the property. The property is currently assessed by Albemarle County at almost $44 million.
‘Bargain sale’
“This is what is known legally as a ‘bargain sale,’ when there is a reduced cash payment and the seller applies for tax credits,†said Bryant in an interview. “We have determined that this project is eligible for land preservation tax credits. The seller will have to apply in the 2010 calendar year and it will be up to the state Department of Taxation to act on their application.â€
The amount of those tax credits has not yet been determined, according to Bryant, and will be a matter for Craig to resolve with the department of taxation.
Since this story was first reported by The Daily Progress and Charlottesville Tomorrow earlier this month, Albemarle County officials have also expressed concerns about the loss of a quality neighborhood project and the loss of proffers that would help build community infrastructure.
The 800 developable acres, and 400 acres originally proposed for a county park, are between Route 20 and Old Lynchburg Road south of Charlottesville, in one of the county’s designated growth areas. Urban development is only permitted in about 5 percent of the county’s land.
“The county has not been involved in the recent Biscuit Run transaction and did not have any authority or ability to influence the decision one way or another,†said County Executive Robert W. Tucker Jr. “We will work cooperatively with state officials to create the most positive possible outcome for the community and to realize the maximum benefits of the park, which include protected land for our residents and a boost to our tourism industry.â€
With no mention of the purchase price …
RICHMOND – Governor Timothy M. Kaine today announced the purchase of approximately 1,200 acres in Albemarle County known as “Biscuit Run” to be held by the state as a site for a future state park.
“When developed as a state park, this extraordinary piece of land will benefit the citizens of Albemarle, Charlottesville and the Commonwealth for recreation, natural resource protection and the preservation of open space in a fast growing area,” Governor Kaine said. “This property is a real jewel and I am very pleased to add it to the long list of properties preserved during my Administration.”
This purchase will add to the goal of 400,000 acres of open space preserved during Governor Kaine’s Administration.
“This is a once-in-a-lifetime opportunity for the state to acquire such a valuable property which offers spectacular mountain views, abundant flora and fauna and is in the viewshed of Mr. Jefferson’s Monticello estate and farms,” said Secretary of Natural Resources L. Preston Bryant, Jr.
“The need for a state park in this region has been identified for more than 20 years in Virginia’s official Outdoors Plan,” said Joseph H. Maroon, director of the Department of Conservation and Recreation, which operates 35 Virginia State Parks, none in the immediate Charlottesville area. “This purchase brings us closer to meeting the recreation and conservation needs of the region and the Commonwealth and will bring additional tourism and outdoor recreation dollars to the area.”
Funding for the purchase was provided by a combination of federal grants and existing state bond funds available through the Virginia Public Building Authority and the State Parks and Natural Areas bond, voted on by the public in 2002. The ability to apply for state land preservation tax credits allowed the sellers to offer the property to the state at a greatly reduced price.
The Daily Progress and Charlottesville Tomorrow have been carrying the freight on this story of late.
9 December – Biscuit Run may become a state park – Charlottesville Tomorrow
28 December – Windfall for Biscuit Run developer? Tax credits could become cash – Daily Progress
30 December – Biscuit Run is Almost a State Park – Daily Progress
The Charlottesville Bubble Blog perhaps said it best:
The Breeden Family made $46.2 Million selling the parcel in 2005 to Hunter Craig. This was at the peak of the bubble–the smartest real estate transaction ever completed in this area, and one which allowed other land and home sellers to maintain champagne dreams for years.
Let’s see … they sold it for $46.2 million and it’s not going to be developed? Well played.
Update 31 December: Neil Williamson with the Free Enterprise Forum raises some important and valid points. We may be setting ourselves up for future failure by further restricting the growth areas in Albemarle County.
As I’ve said before, I think Neil is wrong on this one. If he was right then Biscuit run would have never gone under, and it wouldn’t be a viable option to donate it to the state.
I think Waldo makes some good counter points as well. Neil isn’t talking about expanding the growth area for a certain set of citizens but rather taking a large amount of properties owned by basically one individual and allowing them to rezone. That’s not really very democratic nor very wise planning. The truth is that there are all kinds of developments across the county that are standing almost empty, and we don’t need additional growth area at this point in time, especially if it involves government arbitrarily picking winners and losers. As a resident of the rural area, I have no concerns whatsoever that a failure to “restore” 0.175% of the growth area would cause harm to the rural area. Besides, as I recall, Neil has also faught just about every rural protection oridinance ever proposed, so I have a hard time believing that he’s really concerned about the impact of this on the rural area. (Neil feel free to cite proof to the contrary on that point).
I will conceed that if/when the market improves, that a time may come when it may be worthwhile to consider if the growth area should be expanded. I just don’t think we’re there yet, and it ignores that there may be better solutions to suburban sprawl than the strategies we’re currently using (which have not always been terribly successfull). After all, if the goal of creating growth areas is to drive up supply and lower demand… I really fail to see how that benefits anyone. It certainly doesn’t benefit existing homeowners (i.e. do you want your home to be worth less?) and in the long term I can’t understand that Wood, Hurt et al would really want to create a situation where they were selling homes that were more “affordable” either. It also ignores that rural properties are a different “product” and have different amenities than a urban/suburban property. Thus building more homes in the growth area to lower rural demand is like selling more eggs to lower the price of carrots.
I don’t think that the purpose of the designated growth areas was to control supply and demand so much as it was to constrain growth to the areas the County selected as the “growth areas” – the areas that would ostensibly receive the infrastructure and aid that was necessary to grow well and effectively.
There’s no disagreement about the difference between rural and suburban properties, but I think that one of the main issues were the 2-5 acre developments (and I am very likely to be wrong on this) that were dropped in by-right out in the rural areas and were using more resources than could reasonably be allocated to them.
I think that our region’s growth and infrastructure management has been deficient and dysfunctional at best. Will removing 0.175% from the growth area have that great of an impact? Doubtful, but it’s also a precedent of the state buying/taking “our” land without us getting anything in return.
I think it would be reasonable to discuss expanding the growth area … once all of this cools down a bit. My issue with that discussion is that, from the outside, these discussions always seem to start and end with “sides” being taken rather than a goal of progress/solutions driving the conversation.
Jim I think you’re missing something here. How does the creating the growth areas prevent the by right development or rural areas? I think people were assuming some sort of straight forward supply and demand situation, but really it only works if you downzone or otherwise protect the rural areas. Failure to do that means in boom times that people are still developing those by right rural areas.
I think people are making the faulty assumption that if the State had not done this that it somehow would have still gotten the planned density. I think evidence points to the contrary. Hunter Craig was actively talking to the PEC, and looking at other things like easements to reduce or remove the development rights. It’s possible that Craig could have sold the entire thing at a vast discount, but I think the county loses there too in that situation. So, I don’t think this comes down to a situation so much of the State taking anything from us. They were just following their perexisting plan which called for a state park in our area and jumped at the chance to achieve that at a discount. I think the county wins more under this situation than under any of the alternatives. We’re just victims of the bubble like everyone else with the zoning being it’s own form of over-exuberant speculation.
I don’t disagree that when the market recovers that a discussion of expansion could be productive, but we should neither walk into that discussion with the assumption that expansion of the growth area is the only option. At some point the boomers are going to age and die, so we shouldn’t keep putting eggs in that basket. Simply adding density doesn’t make any sense without removing density from the county. It’s the only way the growth areas can really work. That said, we need to be smarter too about what and how we conserve. (Did you know that growth area properties receive land use taxation? Seems like a contradiction in planning.)
Your point about infrastructure is valid, but our record of infrastructure in the growth areas has failed pretty badly so far. Developments get built, but sidewalks and roads are very slow to follow. In fact, as Neil pointed out, developers build these neighborhoods as cul-de-sacs with the potential with future connectivity but this process is so delayed that new residents end up vetoing the connections. Infrastructure improvements must occur at the time of development or there’s a huge risk that it just won’t happen. Look at Crozet… It got all the development but none of the promised improvements.
I think you’re right though that the way forward will not be attained from people taking sides in advance. I think the way forward comes from honest discussion and the democratic process. I also think it will be essential that we learn from past mistakes, and don’t just slap another growth area on the county without thinking it through (and making sure the citizens really want it.)