NEW HANOVER COUNTY — It seems negotiations between the Cheetah Premier Gentlemen’s Club and New Hanover County may be coming full circle, but it took almost $100,000 in taxpayer money to get there.
READ MORE: County paid Ward & Smith $25k for legal counsel on eminent domain of strip club
ALSO: County rescinds Cheetah eminent domain authorization, wants to negotiate buying the property
Last month, the county told media it spent $25,695 through Dec. 12 on legal counsel to exercise eminent domain over its neighbor, Cheetah strip club. Turns out the total number is nearly four times higher: $95,027.61. None of October, November or December invoices were included in the $25,695 amount previously sent by the county.
A spokesperson for New Hanover County confirmed with Port City Daily its last bill from Ward & Smith, P.A. — which handled eminent domain on the Cheetah property — was dated Jan. 9 to cover December billing. The county suspended services formally Dec. 19, after commissioners rescinded exploring eminent domain due to public pushback. Originally, they unanimously voted Nov. 6 on a resolution with the intent to exercise eminent domain for $2.36 million to help correct the county’s strained parking capacity; the goal was to raze the property.
Now, the county and gentleman’s club are back to working on a shared parking agreement, according to Cheetah’s lawyer Mike Barber. Barber said attorneys were drafting a proposal to likely submit to the county next week, two months after the county denied Cheetah’s suggestion to use its 44 parking spaces for free during the day, when the strip club is closed (at the time Cheetah actually offered 74, but the county already owned 30 of the spaces).
In November, the county said Cheetah’s shared parking offer was “not a viable permanent solution” because the spots would be insufficient to meet the government center’s needs. According to an Aug. 15 memo, chief facilities officer Sara Warmuth claimed the government center’s parking demand “far exceeded” projections from a previous comprehensive parking study — provided by engineering firm SEPI in January 2021 ahead of the new government center’s construction. It estimated a daily peak need of 395 spaces and an event peak need of 500 spaces.
The county has not specified how much more parking it needs today, despite multiple requests for the information.
Asked why or if the county had changed its position on a parking agreement with Cheetah — it already has a deal in place with another neighbor, Ten Pin Alley and Breaktime — a clear answer was not given. Spokesperson Josh Smith told PCD a shared parking agreement would help, though still maintained it would not be enough to solve parking the county deems critical to its operations.
“They have a number of other ways they can address their parking issues,” Barber told PCD this week.
He added an attorney suggested the county was looking at Cape Fear FD Stonewater’s private development next to the government center and green space within the area.
“The County has not been communicating with Mr. Barber, so I’m unsure where he is getting this information,” Smith stated, adding the county has been working with Cheetah property owner Jerry Reid’s other lawyer, Thomas Varnum of Brooks Pierce.
Barber has been Reid and Cheetah’s legal counsel for years. In early December, Reid hired Thomas Varnum of Brooks Pierce due to the firm’s expertise in eminent domain law. The firm did not return PCD’s repeated phone calls.
Smith confirmed the county is continuing exploration of all options, including looking into a shared parking agreement with Cape Fear FD Stonewater. Stonewater entered a public-private partnership with the county to build its new government center and is developing a mixed-use complex next door where the old government center was once located. Its partners, Brian Eckel and Mike Brown, have gone on the record with PCD and The Assembly to say they would work with the county to provide overflow parking.
In the Dec. 11 motion to rescind its eminent domain authorization, county commissioners stated they wanted to continue pursuing voluntary purchase of Cheetah. However, Barber told PCD Tuesday he believed the county no longer sought that option.
“At this point, they don’t consider our property any sort of solution,” he said.
However, county spokesperson Smith said voluntary purchase of Cheetah is not off the shelf, but the county would take the commissioners’ direction on the issue.
Reid told PCD last month he did not want to sell.
The invoices
County commissioners voted in November to pursue eminent domain, to the surprise of Reid. He has been involved with the 143 S. College Rd. property since 1997 and formerly owned the Pure Gold strip club, which occupied the site for 20 years before Cheetah took over the business in 2017. The government center moved next door in 2002.
Eminent domain was not on the agenda in November and the motion, read by County Manager Chris Coudriet at the end of the meeting, did not refer to the property by address or business name, only by tax parcel ID number.
Though commissioners voted in the fall on exploring eminent domain, records show the process actually began six months earlier, in May 2023. That’s when the first invoice was sent to the county’s legal counsel, Ward & Smith.
Port City Daily asked for the breakdown of invoices Dec. 12 but county spokesperson Smith said they were exempt from public records law because of it being a litigation matter. The North Carolina Press Association disagreed, citing the 2007 case Womack Newspapers, Inc. v. Town of Kitty Hawk which found “billing records sent to a public agency are not exempt from disclosure” — but the county still wouldn’t send the invoices.
PCD obtained a six-month batch through internal emails this week, sent to county commissioner and vice chair LeAnn Pierce. It shows fees were billed from Ward & Smith dating from May 17 through October 31, 2023, in the amount of $31,326.
Previously the county told Port City Daily the amount of money paid to Ward & Smith was $25,695 as of Dec. 12. Last month, Smith did not say when the actual start date of the invoices began upon PCD’s inquiry, but said it was “before the Nov. 6 eminent domain authorization.”
According to Pierce, she was unaware billing dated back to May.
“$30,000 is the average income in New Hanover County,” Pierce said. “I mean, that’s how I look at it. And I’m not just going to allow it to be fruitlessly spent.”
When asked why the county sent the $25,000 number originally, Smith said there was a discrepancy in the amount of $5,631 for October billing, unknown at the time of the December email.
“When I sent information out about what we had expended, I was looking at the time and money that had cleared our accounts, as in checks that had been cashed,” Smith said.
November and December invoices had not cleared, presumably. Though that’s when the bulk of fees came in — almost $64,000 — after the county said Cheetah’s first shared parking proposal wouldn’t work.
Here is the breakdown of billing per month, according to the county:
- May and June: $13,795
- July: $2,887.50
- August: $6,612.50
- September: $2,400.
- October: $5,631.25
- November: $37,983.75
- Dec. 1, 2023 – Jan. 2, 2024: $25,717.61
Invoices show Ward & Smith analyzed the county’s current parking setup in May, followed by paying for an appraisal proposal in June. It came in at $2.36 million, the amount allocated in the budget amendment alongside the Nov. 6 eminent domain authorization. Reid and Barber previously told PCD they felt the offer was underpriced.
The county paid legal counsel to explore eminent domain long before sending a notice of condemnation. On July 25, attorneys provided “analysis of necessary proof of public purpose,” a requirement to enact eminent domain. On Aug. 31, it examined “case law research on the use of public enterprise as basis of condemnation.”
Also on Aug. 31, Ward & Smith prepared for a meeting with county commissioners. Smith said commissioners were “fully briefed on every aspect of this matter, before any actions were taken.”
Pierce told PCD she couldn’t reveal what was said during the closed session, but she has also been outspoken about property rights and mounting legal fees in the matter. One week after commissioners’ eminent domain vote, Pierce expressed interest in compromising with the property owner directly.
On Dec. 12, she seconded the motion to Dane Scalise’s suggestion at the commissioners’ meeting to stop eminent domain proceedings.
After Scalise led the motion to rescind, PCD asked if he was open to taking up Eckel’s offer to help with the county’s parking quagmire. He admitted a willingness to explore all potential solutions.
Ward & Smith appears to have considered other parking options available to the county, according to its Sept. 5 invoice. It reviewed its appraisal report to “determine significance of absence of alternate locations for current use.”
PCD asked the county if this meant Ward & Smith could not find parking surrounding the government center, and if so, did the law firm reach out to or communicate with developer Cape Fear FD Stonewater. Stonewater guaranteed adequate parking in a 2021 development agreement as part of the county’s public-private partnership. Smith confirmed the county did not reach out to Cape Fear FD Stonewater but could not speak for Ward & Smith, which did not return PCD’s calls last month or in November.
The broker’s strategy
A Sept. 14 invoice from Ward & Smith shows the team developed a strategy for a realtor to pursue purchasing 143 S. College Rd. This involved not disclosing the broker’s government affiliation to the property owner.
Reid and Barber told PCD they were not aware of the county’s interest in their property before eminent domain authorization. Reid admitted receiving a call from a broker but the person refused to answer questions if it was in relation to a government entity.
Reid’s account is corroborated by a Nov. 7 email obtained by Port City Daily. County Manager Chris Coudriet told commissioners and communications director Smith:
“The agent also discussed the interest to buy with the operator. The buyer’s agent did not disclose us as the party but the owner/ operator were savvy enough to ask if the buyers was a government.”
PCD asked Smith if the county intentionally failed to disclose their affiliation from the property owner. He pushed back on the characterization but confirmed the county “agreed not to disclose unless [Reid] signaled an interest, at which point we would disclose.”
Barber told PCD there was a reason Reid considered the broker’s potential government connection: He’d previously experienced another eminent domain case with a Pure Gold property he owns in Cary. The Town of Cary wanted to build in its place the Cary Downtown Multi-Modal Transit Facility.
In contrast to New Hanover’s action, Barber said Cary’s government informed Reid of its interest well before sending a notice of condemnation. New Hanover County’s notice of condemnation, dated Nov. 7, was received nine days after commissioners voted Nov. 6.
Barber described Cary’s process as normal protocol for the legal maneuver.
“They were truly a business partner,” he said.
Cary assistant town manager Shelley Curran told PCD no eminent domain cases were enacted for the multimodal facility. However, the town informed Reid of the government’s need for his property and to potentially help him relocate five months before it was approved by Capital Area Metropolitan Planning Organization in February 2021.
“We try to share as much information as we can, and along with notice relocation assistance is one of the components of the Uniform Act,” Curran said.
The act is a law on eminent domain policy which applies only to projects that receive federal funding.
While Barber expressed discontent with the county’s earlier actions, he described county attorney Jordan Smith — who took over negotiations from Ward & Smith after the case was rescinded — as “excellent and forthcoming.”
Pierce stated Friday she thought it was unnecessary to pay for lawyers on tasks that staff attorneys were capable of handling. The county manager and county attorney have authority to pursue external legal counsel for matters deemed necessary.
Smith said he wouldn’t characterize Ward & Smith as the main firm the county utilizes for outside counsel, but confirmed it does employ their services on other matters from time to time. Ward & Smith is one of four law firms signed off on the county’s PFAS litigation, filed last week, for example.
PCD asked Pierce her view about the price of external counsel for other issues.
“I certainly would be concerned about what other legal fees we’re paying outside our legal team,” she responded.
Tips or comments? Email journalist Peter Castagno at peter@localdailymedia.com.
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