The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1994, Landmark Communications, Inc.

DATE: Thursday, December 29, 1994            TAG: 9412290365
SECTION: LOCAL                    PAGE: B2   EDITION: NORTH CAROLINA 
SOURCE: STAFF REPORTS 
                                             LENGTH: Short :   34 lines

N.C., BEACH OK MEDIATION FOR 1 GASTON ISSUE

Virginia Beach has agreed to enter into mediation with North Carolina to resolve one of many disputes surrounding the city's proposal build a pipeline to Lake Gaston on the North Carolina border.

A trial had been scheduled in Federal District Court in Washington, D.C., but both sides decided this week to try to resolve their dispute out of court.

North Carolina, in an attempt to prevent South Hampton Roads communities from taking 60 million gallons of water a day from Lake Gaston, had claimed that the pipeline would interfere with its management of coastal waters.

The secretary of commerce, who has jurisdiction over coastal zone management disputes, disagreed and said the project was not subject to the federal Coastal Zone Management Act.

In July, North Carolina appealed to the Federal District Court to overturn the secretary's decision.

Because mediation is required to be confidential, lawyers and the state-appointed mediator would not discuss the case Tuesday.

``It's premature to speculate just where we'll go,'' John Kay, chief outside counsel for Virginia Beach, said Tuesday.

``Everybody's acting in good faith.''

KEYWORDS: LAKE GASTON by CNB