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When Push Comes to Shove, Money Could be Lost in Riverfront Condemnation Case

The Roanoke Time
December 10, 2009
By Dan Casey

You've probably heard the old story about the wealthy man who offers a lass $10,000 for a night's company.

After she accepts, he tries to lower the price to $10, which infuriates her.

"What do you think I am -- a common prostitute?" she demands.

"My dear, we've already established that," he replies. "Now we're just negotiating the price."

There was a time some years ago when the joke above was at least partly analogous to the situation that Jay and Stephanie Burkholder find themselves in today.

Through their company, B&B Holdings, the Roanoke County couple own 3 acres along Reserve Avenue that the Roanoke Redevelopment and Housing Authority is trying to seize on behalf of a giant redevelopment project for Carilion Clinic.

One difference is, the Burkholders in 2006 turned down the housing authority's one and only offer of slightly more than $1 million for their land.

In 1999 the Burkholders paid $168,000 to Norfolk Southern Corp. for that parcel. They also purchased the buildings on it from another company for a sum Stephanie Burkholder says she doesn't recall.

Then the Burkholders spent months improving the buildings and paving a parking lot for their flooring business, Surfaces. (That business is now owned by a relative, though the Burkholders still own the land.)

The housing authority's announcement that it wanted their land came in 2000, nearly as soon as Surfaces moved onto Reserve Avenue. Stephanie Burkholder told me Wednesday that she and her husband would have strongly considered any reasonable offer for the land.

But the authority's offer was unreasonably low, she said. And that seems borne out by a later appraisal by the authority that pegged the value at $1.5 million.

Unfortunately, the time for reason appears long gone.

A judge has ruled the authority has a right to take their 3 acres after a jury in March decides its fair market.

Like the furious lady in the joke who felt low-balled, the Burkholders are understandably upset. They're vowing to appeal all the way to the U.S. Supreme Court.

Egging them on are recent statements from lawmakers such as the Virginia attorney general-elect, state Sen. Ken Cucinnelli, and regular phone calls from people the Burkholders have never heard of who urge them to stand on the principal of "property rights."

Another wrinkle developed recently when Carilion officials surprised many spectators and participants in this catfight by saying they don't want the land, don't need it and never wanted it from the get-go.

Because of that, the Roanoke City Council is talking about the possibility of dropping the condemnation case.

All of this recent head-spinning action has left us with some very interesting scenarios.

One is this: If the city and housing authority decide to drop the condemnation proceedings, taxpayers could be obligated to pay the costs the Burkholders have incurred in defending their property interests.

That includes more than $100,000 in fees just for the experts they've hired, said their attorney, Joe Waldo.

On top of that will be Waldo's bill. He hasn't calculated that yet, he told me. But he noted that in a similar case he defended in Tidewater, a judge set his "reasonable" fee at $290,000.

In other words, that could mean hundreds of thousands of taxpayer dollars down the drain for nothing.

That is pretty screwed up, right?

If the city takes the land at whatever market value a jury sets, the possibilities are even more interesting.

One thing sure to happen is this: Surfaces, a taxpaying business on unblighted land that employs 10 people and supports an additional 30 or so independent subcontractors, will be pushed off those 3 acres and maybe out of the city.

After that, who knows?

The housing authority has no plan for that parcel, except to resell it to Carilion.

Carilion doesn't want it, doesn't need it and doesn't know what it would do with it. Maybe it could be resold, maybe not. The economy is pretty rotten, after all.

Which leaves the possibility that government-seized land once occupied by a taxpaying private employer could end up as a vacant lot full of tall weeds.

How screwed up is that?