Saturday, June 15, 2024

Long legal dispute over Pender’s massive Blake Farm development approaches May hearing

A sign for Blake Farm and developer Trask Land Company sits off U.S. 17 just north of the New Hanover-Pender county line. (Port City Daily photo/Mark Darrough)
A sign for Blake Farm and developer Trask Land Company sits off U.S. 17 just north of the New Hanover-Pender county line. (Port City Daily photo/Mark Darrough)

PENDER COUNTY — A two-year legal battle between Wilmington developer Raiford Trask and a group of landowners over a 1,100-acre mixed-use development, just north of the New Hanover County line is expected to have its day in court later this month.

The Blake Farm development has long sat idle after initial discussions between the two groups commenced in 2011.

Central to the dispute are conflicting accounts of several issues: Trask’s attempt to finance development costs using a portion of the property as collateral, a defaulted loan by a member of the investment group, and a property transfer executed by Trask to construct profitable stormwater retention ponds on a portion of the land.

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Litigation commenced when Trask, represented by the Pender Farm Development (PFD) company, filed a lawsuit in May 2017 against a group of investors led by NDCO, LLC out of Colorado Springs. The suit declared a “deadlock” had resulted from a defaulted loan by one of NDCO’s members, Land Bank Group, and from an unwillingness to work towards a resolution.

In January 2018, NDCO filed its countersuit, alleging contract fraud and seeking “rescission of the contract underlying the parties’ dispute,” according to court documents. NCDO argued Trask did not in good faith pursue the development of the property and — without NDCO’s consent — PFD and Trask had sold 28 acres to Pluris, a water treatment company.

Blake Farm Pond

In 2014, developer Raiford Trask sold 28 acres of the property to a water utility company, Pluris, to build a water treatment facility. (Port City Daily photo/Mark Darrough)
In 2014, developer Raiford Trask sold 28 acres of the property to a water utility company, Pluris, to build a water treatment facility. (Port City Daily photo/Mark Darrough)

Recently reached by phone, Michael Cook, an attorney in Colorado Springs who represents NDCO, argued that Trask had failed and deceived the investor group.

“We, the members of NDCO, had an agreement with Mr. Trask where he was to develop property in Pender County which we as a group had invested more than $16 million,” Cook said. “He not only didn’t do that, he also made off with an income-earning opportunity, without our knowledge, in connection with the wastewater treatment ponds that serve the Pluris facility that has been constructed; and then sued us, wanting 50 percent of property that he has done nothing to improve.”

Cook continued, “our claims in the litigation seek to hold him accountable for his failures and deception, and we look forward to our day in court.”

On Tuesday Trask responded to Cook’s claim via email.

“I cannot comment on the specifics of any pending litigation,” Trask wrote. “I can say that Mr. Cook’s comments are completely inaccurate as reflected in the pleadings filed in this case. I acted appropriately and I am confident that the outcome of any trial will support my position.”

In March 2019 Trask’s attorneys filed responses to NDCO’s “Statement of Uncontroverted Facts.” The document shows both sides in agreement that Trask, as manager of Pender 1164 — the company created as a partnership between NDCO and PFD — executed the transfer of 28 acres to Pluris Hampstead, LLC for use as a wastewater treatment plant.

Trask’s lawyers, however, denied that Cook was unaware of the income-generating potential of the project, which would accept groundwater into the facility and charge associated fees.

“Prior to June 6, 2014, Cook was involved in these discussions and even drafted the corporate resolutions of Pender 1164 authorizing the property transfer to Pluris,” attorneys for Trask stated.

Both sides also agreed that the purchase and sale agreement provided that Pender 1164 — and not a separately owned Trask company called Blake Farm Pond — would construct the ponds and receive the associated income. But according to Trask’s attorneys, the creation of a separate company was because “NDCO declined to participate” in the wastewater project.

“A distinction without a difference”

A map provided by Pender County GIS shows the original map for the Blake Farm master planned community, then known as Easthaven Subdivision and comprising more than 1,800 acres. Today it consists of 1,164 acres. (Port City Daily photo/Courtesy Pender County Superior Court)
A map provided by Pender County GIS shows the original master-planned community originally known as Easthaven Subdivision and comprising more than 1,800 acres. Today the idle development is known as Blake Farm and consists of 1,164 acres. (Port City Daily photo/Courtesy Pender County Superior Court)

NDCO also alleges that under the most recent operating agreement, Trask was “obligated to pay for the development of the 500 acres of land owned by the Land Bank as part of Trask’s capital contribution,” according to an order issued by Judge Michael Robinson, Special Superior Court Judge for Complex Business Cases, denying NDCO’s attempt to amend its initial complaint.

But before that contract was agreed to, NDCO argues that Trask had changed his mind about paying for the development of the property because of “concerns that he had about the costs of development being significantly higher than he believed them to be … based on ‘internal calculations,’” according to the court document.

NDCO further argued that Trask’s concerns of these increased costs, and his intention to seek a loan using the Pender 1164 property as collateral to cover these costs, were never expressed to NDCO until a later deposition of Trask. As such, it contends that the contract should be rescinded.

In response, Trask’s attorneys argue that the alleged “new information” revealed at Trask’s deposition was not new at all, but that development financing was a “core issue from the earliest discussions” between the parties. According to the court order, a series of communications from 2013 and 2016 indicated Trask’s intention to obtain a development loan.

“In reply, NDCO does not refute that it knew of or had access to the communications from 2013 to 2016 concerning Trask’s intention to take out a development loan, but rather argues that they are irrelevant because they did not occur prior to the execution of the Amended Operating Agreement,” Judge Robinson stated.

In essence, NDCO argues that Trask changed his mind about how he would finance his part of the development after signing the initial agreement. But Robinson found this to be a “distinction without a difference,” because NDCO made these allegations in fall of 2018.

“Whether these communications occurred in 2012, 2015, or 2017 is irrelevant to the Court’s inquiry on this Motion. Rather, a sticking point is that these communications reveal that NDCO knew at the time it initiated its [counterclaim] in January 2018 that there were grounds to allege mistake,” Robinson stated.

The point of Robinson’s statement is that at the time of NCDO’s initial counterclaim they were aware of Trask’s change of position on financing, and did not include that in their complaint. Robinson thus barred the attempt to add the issue, nearly a year later.

Furthermore, he stated that while NDCO alleges fraud in the inducement — contract fraud — the “majority of the parties’ dispute concerns contract interpretation.”

A court hearing is scheduled for Tuesday, May 28 at the New Hanover County Courthouse on Princess Street in Wilmington, Courtroom 402.


Mark Darrough can be reached at Mark@Localvoicemedia.com

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