Monday, June 27, 2022

An overview of the long legal saga surrounding Hampstead’s potential “The Preserve” development

In November 2018 a traffic impact analysis report revealed a proposal for a mixed-use development in Hampstead that would be significantly larger than Wilmington's The Avenue. But what transpired for nearly five years before was a lawsuit involving the unconstitutionality of the North Carolina Map Act, which allowed the NDOT to "take" developer Jamestown's land without just compensation.

A vicinity map of the proposed Preserve mixed-use development on land northwest of Topsail High School in Hampstead. (Port City Daily photo/Courtesy Davenport Transportation Consultants)
A vicinity map of the proposed Preserve mixed-use development on land northwest of Topsail High School in Hampstead. (Port City Daily photo/Courtesy Davenport Transportation Consultants)

HAMPSTEAD — As the U.S. 17 corridor through Hampstead continues to see rapid development and worsening traffic congestion, two large projects on the horizon could significantly shape the area’s growth in coming years — and the parties behind each have been engaged in court since 2014.

The dispute began even earlier — in 2011 — when the Wilmington Urban Area Metropolitan Organization (WMPO) filed a Transportation Corridor Official Map marking the path of the future Hampstead Bypass, designed to alleviate traffic pressures along U.S. 17 north of Wilmington to Hampstead and Surf City. It was filed on behalf of the North Carolina Department of Transportation (NCDOT) using rights established by the Map Act — a state law that, at the time, allowed the department to restrict development in order to reserve corridors of land for future highways without compensating landowners.

Related: Larger than Wilmington’s The Avenue, massive development ‘The Preserve could be coming to Hampstead

One particularly large piece of land in this “protected corridor” was a 684-acre tract just northwest of Topsail High, purchased in 2006 by national developer Jamestown, L.P. to build a mixed-use commercial and residential development. The map showed the bypass cutting through Jamestown’s property before merging with U.S. 17 immediately north of the school.

Last November, a letter sent by the WMPO to a Wilmington transportation consultant revealed that Jamestown was preparing a traffic impact analysis (TIA) for a proposal for “The Preserve,” which would include 150,000 square-feet of retail space, 70,000 square-feet of office space, and 891 residential single-family units — if built, significantly larger than The Avenue in Wilmington.

But the proposal comes after a lengthy court battle. Files relating to Jamestown Pender, L.P. v. NCDOT and WMPO, obtained in the Pender County Superior Court, outline an eminent domain case that has dragged on for nearly five years.

Jamestown files lawsuit for “inverse condemnation”

Under restrictions set by the Map Act, Jamestown was prohibited from developing its property within the protected corridor; in the summer of 2014, the developer filed a lawsuit against the NCDOT and WMPO in the Pender County Superior Court.

At the center of the complaint was the developer’s claim of inverse condemnation — when the government takes property but fails to provide just compensation — and that such action was an unconstitutional taking of its land and an invalid exercise of legislative power. It also argued the Map Act itself was unconstitutional.

Eminent domain allows goverment bodies — from the federal to the local level — to take private property for the public good. However, the Fifth Amendment protects citizens from having their property taken without just compensation.

“These actions have deprived Jamestown of all reasonable use of the property and have deprived the property of all reasonable value,” argued Jamestown’s attorneys in a response to a motion to dismiss the case later filed by the defendants. “NCDOT consequently already has effectuated a taking of the property, for which Jamestown is due just compensation. Absent just compensation, NCDOT has caused an unconstitutional taking for which Jamestown seeks judicial relief through this lawsuit.”

A steering committee of Hampstead residents recommended localized police enforcement, planning and zoning, street maintenance, and waste and recycling collection. (Port City Daily photo/Mark Darrough)
Jamestown’s land is just northwest of Topsail High School and the Hampstead water tower. (Port City Daily photo/Mark Darrough)

According to Jamestown’s attorneys, NCDOT had informed their client it would be 10 to 30 years before the NCDOT actually purchased or condemned the property. They also argued that, when developed, the bypass would divide the property into two portions, resulting in the taking of the portion previously approved for commercial development.

The attorneys said Jamestown was in the process of developing the property as a mixed-use development with commercial projects along the U.S. 17 frontage “of about 100 acres, and between 300 to 400 single-family residential housing lots on the remaining acreage.”

“The NCDOT has no plausible argument that its restrictions are for anything more than saving money, which is not a legitimate exercise of police power,” Jamestown’s attorneys argued, in reference to the restrictions’ effective freezing of land use and potential land value. “It is instead effectuating a substantial harm upon Jamestown’s established property rights for the alleged purpose of promoting a public benefit or advantage.”

WMPO and NCDOT file motions to dismiss

Attorneys for the WMPO and NCDOT then filed separate motions to dismiss the the case. The NCDOT denied that WMPO was its agent or that it would be ten or thirty years before NCDOT condemned or purchased the property. It also contended that it did not draft or file the corridor map, and therefore lacked knowledge of the allegations.

At the core of its motion to dismiss, the NCDOT cited the Map Act’s sovereign immunity clause — a law stating government cannot be sued without its consent — and asserted that such immunity insulated it from the suit.

But the NCDOT did admit the bypass project would impact Jamestown’s property and areas intended for commercial development, and said Jamestown “will be justly compensated for any taking of property rights.”

The WMPO cited civil procedural errors on the part of the plaintiff; the failure to exhaust administrative remedies provided by the Map Act, it claimed, were “not fully pursued” or “abandoned” by the plaintiff, presenting a bar to any claims for relief.

In April 2015 the Pender County Superior Court ruled that WMPO acted as an agent of the NCDOT by filing the Corridor Protection Map, that the map constituted a taking of Jamestown’s property by the NCDOT through its power of eminent domain, and that there had indeed been an inverse condemnation of Jamestown’s property by the NCDOT.

The court also concluded that the NCDOT admitted to the “material allegations of the complaint.”

The Map Act: N.C. Supreme Court sides with landowners

In 2016 the North Carolina Supreme Court, pictured, declared the Map Act’s provision allowing the reservation of land for future road construction to be unconstitutional. (Port City Daily photo/Courtesy the North Carolina Judicial Branch)
In 2016 the North Carolina Supreme Court, pictured, declared the Map Act’s provision allowing the reservation of land for future road construction to be unconstitutional. (Port City Daily photo/Courtesy the North Carolina Judicial Branch)

However, the trial court delayed a ruling on “just compensation” owed Jamestown until the conclusion of another eminent domain case that the NCDOT was then appealing to the North Carolina Supreme Court: Kirby v. NCDOT.

The Kirby plaintiffs owned land in Forsyth County that the NCDOT designated for the Winston-Salem Beltway. According to the News and Observer, Winston-Salem attorney Matthew Bryant’s firm represented the majority of Map Act cases in the state. Bryant also represented Jamestown.

In June of 2016, the North Carolina Supreme Court declared the Map Act’s provision allowing the reservation of land for future road construction to be unconstitutional, affirming a decision by the N.C. Court of Appeals in 2015 that the NCDOT was effectively taking private property without providing just compensation.

Supreme Court justices ruled that the Map Act restricted the plaintiffs’ fundamental rights to improve, develop, and subdivide their property for an unlimited amount of time, and such restraints constituted a taking of landowners’ elemental property rights by eminent domain.

According to an opinion on the Jamestown case written in 2017 by the N.C. Court of Appeals, House Bill 959, approved by the state’s General Assembly in July 2016, “rescinded all transportation corridor official maps filed pursuant to the Map Act, and imposed a moratorium on the filing of new maps.”

Pender County Superior Court orders appraisal and just compensation

In November 2016 the N.C. Court of Appeals confirmed that a taking of the Jamestown property had occurred. The following January, Pender County Superior Court ordered that “it is now incumbent upon the NCDOT” to make good faith deposits, with interest, and appraise the land taken.

In January 2018, after the NCDOT admitted to delays in appraising the land, the court ordered sanctions in the amount of $29,145 to cover a portion of Jamestown’s attorneys’ fees.

The NCDOT then paid Jamestown a total of $202,000 over the course of 2018 for “estimated just compensation”. In July the NCDOT provided its appraisal report to Jamestown’s attorneys, and both parties agreed to a deadline of February 2019 for Jamestown to conduct its own appraisal.

The current status of this appraisal and the total amount owed Jamestown is unclear. The WMPO, Jamestown, and attorneys for both sides declined to comment as the case is still in litigation.


Mark Darrough can be reached at Mark@Localvoicemedia.com

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