Developer Claims K'ville Condemnation Would Benefit Private Hospital | Eastern North Carolina Now

    Publisher's note: Sam A. Hieb is a contributor to Carolina Journal.

Eminent domain procedure pits one private landowner against another

    KERNERSVILLE     Could condemnation under eminent domain increase the value of land?

    That's the argument the attorney for a Kernersville property developer is making. Only problem is it's not his client's land that would become more valuable. Someone else's land would increase in value. Meantime, his client will receive considerably less than market value in compensation.

    "Go out there and ask 99 people out on the street if it would be OK to make a real estate developer's land more valuable by condemning -- not buying -- condemning -- access across their neighbor's land," said Frederick Sharpless, the attorney representing Joyce Development Corp. "And 99 people are going to tell you you're out of your mind. What's different about this situation?"

    Here's the situation. Joyce Development owns land along N.C. 66 in Kernersville. It's prime land -- sections of eastern Forsyth County and western Guilford County between Kernersville and Greensboro are being targeted for development by both cities.

    The area is considered so desirable for economic development that the Kernersville Town Council overwhelmingly rejected Guilford County Schools' request to rezone land for a new high school.

    It's also close to the Kernersville Medical Center, which Novant Health, a nonprofit health care network based in Winston-Salem, built in 2008.

    Another developer that owns land in the area is Trade Street Development Corp., which acts as Novant's agent in the extension of the Kernersville Medical Parkway. The proposed extension of the parkway would cross Joyce's land.

    It ostensibly would make Trade Street's land more suitable for commercial development, thus increasing its value.
That's the case Joyce Development made in a complaint filed in August seeking to stop the town from using eminent domain to seize 2.3 acres of property.

    The complaint maintains, "the Town of Kernersville improperly seeks to wield the public power of eminent domain for the private benefit of the commercial developers who have orchestrated and funded the taking and whose property cannot be developed unless the road is constructed."

    In a phone interview, Sharpless disputed Kernersville's claim that the taking of land was for a public purpose, adding that another major road provided adequate access to the medical center.

    "They've got plenty of access," Sharpless told Carolina Journal.

    The complaint also states that Dr. Joyce Reynolds, a stockholder in Joyce Development and the mother of the company's president, was invited to lunch by the husband of a former patient and was met by representatives from Novant, who -- according the complaint -- pressured Reynolds to "gift" the land to Novant.

    The suit goes on to say that Joyce Development President Dick Reynolds offered to sell the land to Novant in 2007 but received no counter offer. Reynolds met in September 2008 with representatives of Trade Street, this time offering to sell the land for $4.5 million. Again, no counter offer was made at that time, but in April 2012 Trade Street finally countered with an offer of $540,000, an offer that -- the lawsuit states -- "is substantially less" than its tax value.

    Dick Reynolds rejected that offer. In a June 26, 2012 e-mail obtained by CJ, Trade Street President Hank Perkins informed Town Manager Curtis Swisher and Town Attorney John Wolfe that Reynolds' position was "that he does not want to sell and that no price is sufficient compensation for his land."

    In its complaint, Joyce Development maintains "upon information and belief, Mr. Perkins made a knowingly false statement when he claimed that Mr. Reynolds told Mr. Perkins 'there was no amount of money that would be enough to purchase his property.'"

    Perkins did not respond to requests for comment.

    On Aug. 21 Kernersville filed both a motion to dismiss Joyce Development's and its official notice of condemnation, stating the Town of Kernersville "estimates the sum of $502,951.00 to be just compensation for the taking of property described."

    The town also maintains that the taking of the land is justified as a public purpose not only in order to relieve congestion along N.C. 66 but also to provide better emergency access to the medical center.

    "We look at it in the sense that it's a connector road," Swisher told CJ. "It's also an outlet to an emergency service. We need two ways in and out from the hospital."