THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, January 28, 1995 TAG: 9501280229
SECTION: LOCAL PAGE: B4 EDITION: FINAL
SOURCE: BY MIKE KNEPLER, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 81 lines
The city's redevelopment authority is trying to stop a $2.66 million property-condemnation award to an East Ocean View landlord, a figure who could crimp a highly publicized bayfront renewal project.
On Friday, a lawyer for the Norfolk Redevelopment and Housing Authority argued that the award, reached by a five-person citizen panel, was based, in part, on what he called a ``fraudulent'' private appraisal for a 102-unit apartment building in East Ocean View.
The agency says the property, owned by landlord Dick Kelly, is worth just $1.3 million.
The complex, at 4215-85 E. Ocean View Ave. and 9615-85 23rd Bay St., is in the highly touted, 90-acre East Ocean View redevelopment project. The city wants to clear the area and have it rebuilt with a fashionable neighborhood designed by internationally acclaimed architect Andres Duany.
The redevelopment authority has estimated it will cost $27 million to $35 million to acquire and raze most of the existing property and rebuild the infrastructure before selling the lots to private home builders.
So far, the agency has only a $9million bank loan with which to work.
``Obviously it's going to have an impact, however it comes out,'' David H. Rice, redevelopment executive director, said of the Kelly condemnation case after Friday's court hearing. He said the agency was concerned that the $2.66 million award, if left intact, could set a precedent for high appraisals, thereby escalating the project's cost.
``We want to pay what's fair,'' he said. ``And we think we offered what's fair. That's what concerned us.''
Lawyers for the agency and for Kelly also sparred in court Friday over the objectivity of several citizen panelists who awarded the $2.66 million.
Norfolk Circuit Court Judge John E. Clarkson continued the case indefinitely.
When it resumes, the lawyers said, they will call a private real-estate appraiser, whose work was presented to the the panel.
Howard W. Martin Jr., representing the redevelopment authority, Friday argued that the appraiser had issued a ``fraudulent'' appraisal and accused him of perjury.
``That's a serious charge, that a man lied,'' Clarkson said.
The redevelopment agency alleges that the man originally appraised the property at $1.6 million last March, but in October, changed it to $2.75 million while still using the same methodology.
Carter Anderson, a Virginia Beach-based attorney representing Kelly, said the redevelopment authority must prove that the appraisal was falsified.
He also suggested that the agency missed its opportunity to challenge the appraisal in a set of hearings, held Jan. 10-12.
``They're trying to point their finger at everyone else except themselves,'' Anderson said. ``Had they asked the most rudimentary questions, they would have gotten the information.''
Martin said he did not have adequate opportunity to challenge the revised appraisal because the much higher figure came as a surprise during the condemnation hearing. He also said the agency did not suspect fraud until the mid-January hearings had concluded.
The redevelopment attorney contended that the condemnation panel, also wrongly based the award on potential income from the property.
Martin also said Kelly was inconsistent in his own valuation of the property, once saying that it was worth $2.2 million to $2.4 million, then saying that East Ocean View property values had sharply declined, and then asking the court for $3 million.
The lawyers also squabbled over the objectivity of the condemnation panel. Martin said that one panelist may have become biased after Kelly had said to him, ``I heard you were an honest man.''
``It was the most innocuous social contact,'' Kelly's lawyer said.
Martin also objected to the court's ruling that two citizens, suggested by the redevelopment authority, could not serve on the panel.
Clarkson noted that one had served on 25 previous condemnation panels and the other had served 14 times.
The judge said he was concerned that such frequent panelists may no longer be viewed as impartial.
Clarkson predicted that the case would be appealed by the losing party.
``No matter what I do in this case,'' he said, ``with all the money involved, it's not going to stop in this little court.'' by CNB