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The town is no longer considering buying Henry Frazer’s three lots on South Water Street.

On Tuesday night the town board voted 3-1 to discontinue negotiations with Henry Frazer and Ben Hollowel’s Whittaker Point Properites, LLC for the 13,383 square feet of land.

The Tuesday vote came amid rising public opinion against the purchase. At a public hearing the night before, many of the three dozen citizens in attendance said it would be wrong for the town to buy land zoned R2 residential for a public parking lot, restroom and visitors’ center. Others who spoke Monday said they objected to the price. There had been reports that the town was prepared to pay $400,000 for a third of an acre. There were concerns that in a downturned real estate market, that price was based on an appraisal that many viewed as inflated. There were also questions raised about the town negotiating to let Mr. Frazer consider some of the public parking spaces his, for future development.

After the hearing Monday night, two commissioners, Al Herlands and Warren Johnson signalled that they would vote against the purchase. Both said the price was an issue for them and Johnson said he was also bothered by the idea of buying residential, rather than commercial land for public faciliites.

But Mr. Herlands and Mr. Johnson had even stronger criticism for the potential buy at Tuesday night ‘s monthly Town Board meeting when, for the first time, the terms of a sales offer was laid out in public.

(From the Land Purchase and Sale Contract as drawn up and proposed by Whittaker Point Properties.)

2. (a) Purchase Price. The purchase price to be paid by Purchaser to Seller for the Property (“Purchase Price”) shall be Four Hundred Sixty-Eight Thousand and No/100 Dollars ($468,000.00). (b) Gift. Sellers agree to make a donation in the amount of Sixty-Nine Thousand and No/100 Dollars ($69,000.00) to be applied toward the Purchase for a net Purchase Price of Three Hundred Ninety-Nine Thousand and No/100 Dollars ($399,000.00) (c) Parking Spaces. In consideration of said gift by the Seller to the Purchaser, Purchaser agrees to provide four (4) parking spaces on the Property to Seller to be used in conjunction with Seller’s property at 312 Hodges Street, Oriental.

That ‘gift’ might be seen as one that keeps on giving — to the seller. Under the arrangement, Whittaker Point Properties could count on the town providing it with four parking spaces in the public lot, which would count for some of the parking it would have to provide for another lot that Mr. Frazer and Mr. Hollowell may develop at the corner of Hodges and South Water Streets.

If that adopted, it would mean that Whittaker Pointe Properties would be able to skirt the town’s GMO on how many parking spaces it had to provide in that future development .

(Town Manager Wyatt Cutler says initially, Mr. Frazer had wanted 8 parking spaces in the deal. )

Commissioner Johnson had a separate set of concerns about the two-tier pricing. He noted that the higher figure — $468,000 — would go on the record books at the county courthouse even if the town had actually paid $69,0000 less. His voice and sentences sometimes cracking, Mr. Johnson questioned how this would affect future real estate appraisals. The land sales prices on record with the county are part of the “comparables” used in appraisals. If the fictional $468,000 were entered as the official purchase price when it was actually far less, it could contribute to appraisal inflation. Commissioner Johnson questioned how the public could know which numbers were right. “Why should I trust any appraisal that comes along?” he asked. “This is snakey.”

(Appraisals — and inflated appraisals — had already been in question in this case. As Public Dock reported, the $468,000 value assigned to the three lots — an appraisal paid by the would-be selllers —- was almost $140,000 higher than an appraisal paid for by the town.)

Commissioner Herlands, a retired Federal banking official, offered a critique of Mr.Frazer and Mr. Hollowell’s sales proposal as well. He said that a public body such as the town board should not be part of a contract that had what he described as “sham elements.”

About ten people attended the Tuesday night meeting at which the details of the proposed contract were revealed, a far smaller crowd than was on hand Monday night. As that public hearing got underway a night earlier, Commissioner Herlands had asked if there were an official offer to discuss. He was told by Commissioner Nancy Inger, the board’s liason in the negotiations, that while there had been verbal discussions there was not an official proposal.

But there actually was. And it was in the room Monday night.

Whittaker Pointe Properties had faxed its proposal to Town Hall just after 4pm Monday. Town Manager Wyatt Cutler says he grabbed the fax before the 7pm hearing but hadn’t looked at it as he carried it in to the public hearing. He says he hadn’t realized it was the contract proposal — because he gets a number of documents from Mr. Hollowell’s law office . As such, Mr. Cutler says, he didn’t speak out when Commissioner Herlands asked if there were an official offer, nor subsequently when some in the public asked for similar details. Ben Hollowell, who was in the audience, did not mention the official offer.

In the end, the offer is now moot. And what most people attending the hearing Monday had sought — the town walking away from the South Water Street lots — has now come to pass.

The vote was 3-1 Tuesday night. Commissioners Herlands and Johnson clearly voted to discontinue the talks over the South Water Street lots. Commissioner Barbara Venturi was the third, though somewhat more reluctant, vote.

Commissioner Nancy Inger was not present for the vote, as she was at a Bay River Sewer Authority meeting.

Commissioner Candy Bohmert said that the town should continue negotiating with Mr. Frazer and Mr. Hollowell, calling the end of talks a “shame” because in her view, the South Water Street lots were a “really good place” for what the town was looking for.

Commissioner Bohmert said that she was “really sad” that the town had “lost this opportunity”. And she added that she thought the town had treated Mr. Frazer, “pretty nasty.”

Commissioner Herlands, seated next to her, said that he thought the town had not.

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While the town has ended negotiations for the three lots on South Water Street’s western side, it did not shut the door on seeking other land for a parking lot/visitors center/ restrooms. Nor did the town board rule out seeking a CAMA grant to buy such land. At the hearing Monday night, Tennessee Ronnie Kennemer suggested the town try to buy the “Joe Cox” property that Mr. Frazer and Mr. Hollowell own on Hodges at the corner of South Water Street, across from the lots they had been trying to sell the town. Again on Tuesday night, a resident suggested the town pursue that land.

The “Joe Cox” property is named for the late NCSU School of Design professor who with his wife Betsy developed Oriental’s dragon motif in the 60’s. The property is zoned commercial MU1 already (which addresses a recurring theme at Monday’s hearing: that many people did not object to the town buying property so long as it wasn’t zoned residential.) The “Joe Cox” property is more than 12,000 square feet, with a Pickles Row house on it. It is also one lot removed from the Duck Pond, which could put it in good standing as a candidate for a CAMA Water Access grant. The property is not actively for sale, though 18 months ago, during the height of the real estate boom, Mr. Frazer floated a price of $750,000 for it. The CAMA grant would pay at least three quarters of the price of a land acquisition. The CAMA grant deadline is May 22.

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During the public hearing Monday night, Commissioner Bohmert warned that if the town didn’t buy the three South Water Street lots, Mr. Frazer could seek to have the two residential lots re-zoned to MU1 commercial because he already owns an adjacent property that is MU1. She suggested that the town would have to grant that rezoning. If that were the case, it would indicate a “domino” approach to zoning in which no residential street bordering an MU1 district could rest easy. Imagine in you will, PacMan gobbling up existing R2 neighborhoods. We’re investigating if that illogic is the case.

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Posted Wednesday May 2, 2007 by Melinda Penkava

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