BRUNSWICK COUNTY, NC (WECT) - With budget items like county employee health insurance seeing major cuts and other county parks fighting for funding, some residents are outraged over a multi-million dollar park purchase made by county commissioners. They say the acquisition was nothing more than commissioners bailing out one of their own.
The county issued an unusually detailed news release in December of 2014 explaining the purchase. Pointing out that the land contained a "large amount of native vegetation and heritage trees" and would be used as a "passive nature park." The $3.5 million used to acquire it came from the county's reserves - essentially their "rainy day" fund.
The motivation to buy such land, according to the county, was the lack of a county-owned water access in the Lockwood Folly area. (Note: other public water accesses, like the Sunset Harbor Boat Ramp, exist but are owned by N.C. Wildlife)
That news release might not have raised any eyebrows if it weren't for a vocal group of Brunswick residents who have continued to protest the purchase to this day. They say the property located on Holden Beach Road SW is not only a "bad buy" but also unethical.
"They threw the code of ethics out the window," said Jan Dale, a surveyor and Brunswick County resident. "[To] say it's a nature park? Unbelievable!"
The land in question involves three parcels: a 32.97 acre vacant lot, 1.18 acres of land with street access and 0.75 adjoining acres of property. Combined, they create a narrow, rectangular-shaped area from the road to the intracoastal.
After visiting the property in early spring of 2015, it was evident why residents were upset over their newest nature park. Several heaping piles of cut trees between the older oaks were scattered throughout. Other areas were swampy and flooded. The remains of an old auto body shop (or junk yard) were found closer to the road.
"Nature park?! They destroyed the nature completely!" Dale questioned, referring to the former owners of the land, Sweetwater Investments.
With warmer weather, much of the grass has grown up but quality aside, it's how the county purchased the property and who they bought it from that has tax payers crying foul.
In early 2014, commissioner Marty Cooke showed interest in the county acquiring a park with water-access for the Holden Beach area,
Commissioners first considered a 24.7-acre parcel on N.C. 211 at the April Board meeting, but for several reasons found it didn't fit the bill.
Then-Chairman Phil Norris approached County Manager Ann Hardy in the first few days of May about some available land that he had had ownership in at one time. Board meeting minutes show that Norris claimed he had been severed from the property for over a year.
Hardy instructed Norris to speak with County Attorney Huey Marshall to determine whether or not his involvement in the land would create a conflict of interest in suggesting it for a county purchase. Hardy was not involved in the discussion between Norris and Marshall.
The Board was told about the property on the May 7th closed session Board meeting. Commissioners were informed that Marshall had researched the matter and determined Norris had no "pecuniary or financial interest, and that there was nothing illegal in his suggestion or past involvement."
That past involvement specifically involved Norris and his wife Sandra's ownership in Sweetwater Investments, the company that purchased the parcels in 2004-2005 for $2,325,000.00.
Residents counter there was an obvious conflict of interest because up until the May 7th meeting, Norris' name was still listed on Sweetwater's annual business reports filed with the Secretary of State.
For ten years after the company's initial Articles of Organization were filed in in 2004 filing Norris, his wife Sandra and both Wayne and Rhonda Smith were listed as Members/Organizers.
When the annual filing for 2014 was made on the night of the May Board meeting (the same evening the property was formally presented) all names besides Wayne Smith's were removed. A second report was also filed on that same, at the same time – an amendment to the company's 2013 annual report, removing the Norris' names.
Residents question the truth in Norris' claim that he was "completely severed" given the timing of the edits made.
When WECT reached Norris by phone, he said he had paperwork proving that he had signed away his ownership in Sweetwater long before. Norris denied our request to see the signed documents.
Aerial photos of Sweetwater's land - now Brunswick County's newest nature park - show a business venture that never came to fruition.
Photos from 2004 illustrate dense tree coverage, minus a few winding ATV trails. Close to the road, a house and what was either a car junk yard or auto body shop that held a cache of vehicles on the lot. By 2006 the property's vegetation was mostly cleared for development.
Plans were drawn by Norris' engineering firm (Norris & Tunstall Consulting Engineers, P.C.) for what would be called Venetian Bay, a 400-plus unit condominium complex.
On survey maps, Dale pointed out several complications with the project, including 7.71 acres of wetland areas and a flood zone that encompassed a large portion of the acreage.
In any case, Venetian Bay was never built and the land has been vacant since it was pre-cleared for development.
After the May Board meeting, commissioners began negotiations with Wayne who was now Sweetwater's sole owner - at least on paper. The landowner provided appraisals showing the market price for the land at more than $7 million. The appraisals used comparable lots in Horry County and Oak Island citing the lack of similar properties and sales in Brunswick.
Smith then told the county he would consider a selling price of $3-4 million.
The Board told staff to continue negotiations with Smith and start researching grant funding.
Going into the fall, issues begin to arise.
According to meeting minutes, the landowner's price was based on multi-family subdivisions, the maximum use of the land. Yet commissioners acknowledged that the "raw" land would not be as highly valued.
Moreover, the tax value of the property during negotiations was around $1.7 million (based on 2011 valuations). One of Sweetwater's appraisals came in at $7,725,000.00.
Brunswick County did not seek out their own appraisal. The county said that given the lack of a "true, non-foreclosure comparable" there no need to spend money on another appraisal beyond what Sweetwater provided and the tax office had valued the land for.
Other vacant land purchases made in the past five years have also not include county appraisals.
In addition, the county did not conduct an environmental evaluation of the area where cars and car parts were stored out in the open (as visible from the aerial GIS maps).
During the second October closed session meeting, the landowner (Smith) told the board he owed $2.5 million on the land and intended to stand firm at a $3.5 million asking price. He also requested a quick closing.
Cooke told staff to offer the $3.5 million and close before the end of 2014. The vote of approval was unanimous, with Commissioner Pat Sykes abstaining.
Chairman Norris called the open session back to order on November 12, 2014 at 6:04pm and Cooke moved to approve the purchase of 34.88 acres of Holden Beach land from Sweetwater using $3,510,000.00 from the fund balance. Commissioners Cooke, Norris, Phillips and Williams all voted in favor. The single "nay" from Sykes.
"Having the three votes, basically, there's nothing you can do," Sykes explained.
Sykes felt the purchase had been "thrown on the table," and was hardly a need for the county at the time.
According to North Carolina General Statue 143-318.11, county officials are allowed to meet in closed session to discuss negotiations, price and contract terms when purchasing property.
However, it was the vote of a major land purchase at an agenda meeting, not the standard monthly meeting, that had residents fuming.
"They don't always have the public's interest in mind," criticized Mike Rice, a Brunswick County resident.
An agenda meeting is typically used to set an agenda for an upcoming regular session. While it is not illegal for business to be conducted at an agenda meeting, it is generally less common. As such, these types of meetings are not as widely attended by residents and media.
In any case, the November agenda meeting was marked first by the decision to purchase Sweetwater's vacant land and second, by Norris' last meeting and last major vote before his term expired in office.
Whether he was removed as owner from the property for one year or ten, residents say they still saw an ethical issue in allowing him to vote on his own former investment.
"It became pretty clear that this purchase, this acquisition, had an odor," Rice said.
After the vote, Brunswick County residents began to make their opposition fully known with phone calls, emails and regular attendance at meetings.
Board newcomer Randy Thompson asked the commissioners to revisit the purchase, citing public discontent.
Sykes also pointed out during a closed session meeting on December 1st the numerous calls of concern, while Commissioner Cooke said he had not received any negative feedback.
Sykes requested an independent attorney in Raleigh, who advised the board that there was still time to back out of the deal. The loss of a $1,000 deposit would be the only penalty.
The Board told staff to notify Smith that they were seeking a postponement on the purchase. Ann Hardy was direct to inform him that the county would not be closing on December 31 if he said 'no.'
Meeting minutes did not detail what happened when Smith heard the news. According to Hardy, Smith insisted that they had a valid contract and that his attorneys would be moving forward.
A special meeting before the closing was called on December 15 to address public push back. There was a list of residents waiting for their turn to speak in front of commissioners. Each for the same reason: the land purchase.
Their words did not change the ultimate outcome of the acquisition.
The Commissioners continued to hash over the acquisition in closed session. Cooke gave his support to preserve the beauty of Holden Beach. Thompson opposed and asked for another vote in open session.
The purchase was voted on again in open session and confirmed. Only Sykes and Thompson voted "no" - the only two commissioners who responded to WECT's requests for an interview.
"We had a limited amount of time to take any amount of action that may have diverted the purchase," Thompson explained.
(Note: the Board has now changed their meeting policy and will no longer vote at Agenda Meetings)
In January of 2015, the State Bureau of Investigation and the Brunswick County Sheriff's Office were requested by District Attorney Jon David to investigate allegations made against Phil Norris regarding the land purchase.
The SBI says that no evidence, only allegations that Norris had committed wrong-doing were presented to their agency. Specifically, that there was a conflict of interest and that Norris had made money off the acquisition.
The SBI did not answer WECT's questions as to how long the investigation lasted, who was interviewed and what types of records were examined - specifically, financial documents.
According to the SBI, the financial crimes prosecutor involved decided the investigation did not yield evidence that a criminal offense occurred. The case ended and was labeled a "limited inquiry."
An SBI investigative report was generated but is not available as public record. The SBI says copies were not provided to Brunswick County.
When asked about their involvement in the investigation, commissioners Sykes and Thompson told WECT that they were never interviewed or questioned by the SBI about the purchase.
Residents still continue to attend meetings, waiting for their three minutes to speak. Others persistently make public records requests to the county in an effort to peel away more layers.
"We don't want this to happen again," Rice said.
Sykes reminds residents they have the freedom to vote.
"You need to ask them where they stand on all this before you put them in office," she advised.
For now, there are no plans to do anything with the property. The county-owned water access so desirable last year, will have to wait.
The 2016 budget has not set aside funding to so much as build a parking lot.
If Sykes had it her way, she'd sell the parcels to reclaim the funds. A Brunswick County real estate agent told WECT that market values are closer than ever to tax values now, although market value typically determines a selling price. As such, at current real estate values and tax values, the county likely won't get the $3.5 million back.
WECT reached Norris by phone on June 8th at his office.
Norris reiterated that he had disclosed his past ownership and the county attorney concurred there was no legal issue with Norris' suggested purchase.
Mr. Norris said he was done with the matter.
He expressed frustration at residents who have "smeared" his name publicly at county meetings and who have not returned his calls to answer their questions.
At the end of the call he said WECT's questions on the Holden Beach property so "late in the game" were in "poor form."
At one point last spring, commissioners heard from the North Carolina Coastal Land Trust who praised the purchase.
According to a county news release:
"I wanted to let you know that your staff has been extremely diligent and has done their homework," wrote Camilla Herlevich, Executive Director of the North Carolina Coastal Land Trust, in one email to the Commissioners in December. "I hope that you will be able to acquire the Holden Beach tract with County funds, and I commend your efforts in reviewing this proposal to bring much-needed park land to the region."
In an email to WECT, Herlevich acknowledged that she had not actually seen the land in person.
Meanwhile, residents called upon their own outside opinion from John Taggart, Ph.D. at the Environmental Studies department at UNCW.
Taggart visited the property December 13th, just shy of the final vote, and drafted a short report on his findings as to whether the land was viable as a nature park.
"It simply does not meet the standard at all," sad Taggart explained. "It's land that at one time had a nice coastal fringe, but it's been thinned severely."
Taggart said in his experience, much of it at the state-level for environmental evaluation, he had never seen a "nature park" purchase that was in a similar condition as the Holden Beach property.
"The money that is being paid by the citizens…there's a responsibility there to spend it wisely and have something that is of value for the people for this generation and the ones coming," Taggart explained.