Town Sells Old School, Parkland to Private Developer for $10

Early photo of 1912 Cape Charles School at Central Park

Early photo of 1912 Cape Charles School at Central Park

Cape Charles Wave

December 22, 2012

Christmas came early for Echelon Resources, Inc.  On Thursday, Cape Charles Mayor Dora Sullivan signed over the deed to the school building at Central Park to Echelon developers Edwin Gaskin and J. David McCormack. The building is slated to be converted into a 17-unit apartment complex.

The purchase price was $10, but the sales contract also states that the Town shall pay to Echelon the insurance proceeds received for earthquake damage to the property — approximately $41,000.

In addition to the school building, Echelon received the adjoining park basketball court and playground parking area. Both plots of land are intended to become private parking lots for the apartments in the school.

Town Council secretly decided to give the school and land to Echelon without putting the property up for bid.

Residents opposed to the giveaway have sued the Town and Echelon on the grounds that both the sale and the rezoning of the property were done illegally. A court date was originally set for December 17, but has been rescheduled for January 25 due to a heavy docket.

The Old School Cape Charles group maintains that Town Council violated state law by keeping its meetings with Echelon secret for almost six months. The Virginia Freedom of Information Act allows closed negotiation sessions only after a public motion that “identifies the subject matter.”

The law stipulates that “A general reference to . . . the subject matter of the closed meeting shall not be sufficient to satisfy the requirements for holding a closed meeting.” When voting to go into closed session, Town Council concealed the specific subject of the session. Only a general reference was made to an “Unsolicited Confidential Proposal.”

The Town also rejected Old School Cape Charles’ proposals without a vote in public session and ignored petitions from residents requesting time to put forward a public use plan for the building.

The Old School group is also contesting the rezoning of the school, basketball court, and playground parking from “Open Space” to “R-1 Residential.” Old School argues that the applications were defective, the action was contrary to the Town’s Comprehensive Plan, and the issuance of a Conditional Use Permit to allow apartments in R-1 Residential constituted illegal spot zoning.


Echelon has always insisted that conversion of the school building depends on receiving state and federal historic tax credits for up to 45 percent of construction costs. Town Manager Heather Arcos applied for tax credits for the building October 1, but the application was rejected November 21 by the state Department of Historic Resources. Arcos reported to Town Council December 13 that Echelon would resubmit a modified application for tax credits.

In addition to paying Echelon $41,000, Town Council authorized other incentives. The normal water and sewer hookup fee per apartment unit was $12,350, meaning that Echelon would pay $209,950 for 17 units. On May 10, Council voted to reduce that cost by half for dwellings containing one or fewer bedrooms. That reduced Echelon’s cost to $104,975. Then, on June 14 , Council authorized a further 50 percent reduction for Echelon only, bringing the final cost to $52,487.

According to the Town Code, hookup fees are due either when a building permit is issued or, at the latest, before hookup actually occurs. Council bypassed that requirement with the June 14 special ordinance stating that Echelon could delay payment of hookup fees until issuance of a certificate of occupancy.

Council further voted not to heed Town attorney Michael Sterling, who reviewed the Echelon contract. Sterling advised the Town to include a performance bond and buyback option in the contract as protection in the event that Echelon failed to complete its plans for the building.

Under the terms of sale, Echelon commits to begin construction within 90 days, and to complete work within a year after that. But without a performance bond, there is no penalty should the developer fail to meet those terms.

Five months ago, on July 21, Echelon partner McCormack addressed Town residents at an information meeting at the Palace Theatre. McCormack said the old school apartments would rent for “market rates,” which he estimated at $650-$700 per month, plus utilities, for the one-bedroom units.

At a December 18 meeting with State Delegate Lynwood Lewis, Old School representatives asked Lewis to act as the Patron for a bill to amend and reenact § 15.2-2306  of the Code of Virginia, relating to preservation of historical sites and architectural areas. The draft amendment reads:

No historic property owned by any town, county or city may be sold at a nominal cost to a private developer when a group of community residents of the town, county, or city where the historic property is located wish to rehabilitate it for a public use. In such cases the governmental entity should partner with the community group to rehabilitate the structure to return it to a public use through adaptive reuse, if the previous use is no longer needed. No local or state Park property may be sold to any developer for private gain.

“Old School Cape Charles is working to save the school building and park property in our town,” said spokesman Debbie Bender. “Even if we can’t save it we want to make sure that this kind of thing never happens to another community in Virginia.”

The Old School group is in contact with the Department of Historic Resources in Richmond and the National Park Service in Washington regarding the tax credit application signed by Town Manager Arcos and with state and federal political representatives about the school sale.

Disclosure: Members of Cape Charles Wave are also members of Old School Cape Charles.



12 Responses to “Town Sells Old School, Parkland to Private Developer for $10”

  1. Kearn Schemm on December 22nd, 2012 9:22 am

    Every time I read about this I become more suspicious of the Town Council. Why would they reject the legal advice of the Town Attorney unless something shady is going on? This is a real travesty.

  2. Betty Johnson on December 22nd, 2012 11:25 am

    How horrible to do this to our old school! What is wrong with this picture? I’ll tell you. These people are “come-heres” . . . . This makes me sick.

  3. Deborah Bender on December 22nd, 2012 2:42 pm

    I am so glad that I am not the only one that finds this to be a dirty little deal. Under the cloak of darkness our town council, mayor and both town manager and assistant town manager colluded with an out-of-town developer to give away our historic 100-year-old school. This has been a dirty deal for the citizens of Cape Charles from the start. I have said it before and I will say it again — WE DO NOT NEED APARTMENTS IN THE PARK! We need a community center, but this group of “come here” town council members and most of the people running this town are only interested in tourism. . . . This is wrong on so many levels. This matter is far from over. . . . Those apartments will be a rundown dump in a few years’ time — and THEN WHAT?

  4. Craig Zuidema on December 22nd, 2012 4:27 pm

    Ahhhh, yet again. “Come heres”, the evildoers in Cape Charles. How dare someone not from Cape Charles have an opinion? How dare they think differently than someone else? How dare they pay taxes to the town and county, spend money at local businesses, volunteer in the community, and expect to have any voice in the affairs of this community? Oh the travesty, the humanity, I am outraged I tell you, outraged!

  5. Frankie Earman on December 22nd, 2012 6:08 pm

    I’m not from Cape Charles or Virginia’s Eastern Shore. I am from a small (unincorporated) town in Virginia. I have only visited Cape Charles a few times.
    I would like to say that this issue is beyond belief. My town didn’t have much but it has used a part of its old wooden school for years as a community center. The remainder of the property is parking, tennis courts and a town pool. Fully supported by donations, it has served well. NO ONE would have ever thought of selling any of it at any time.
    The entire town needs to vote ASAP to fire the Town Council, Mayor and anyone else involved and make this a do over. Hopefully the courts will fix this “sale” and end this issue. Even if the town wanted to unload this property, selling without a performance bond and buyback option is just asking for trouble.

  6. Steve Downs on December 22nd, 2012 6:58 pm

    How about putting the Community Center in the old medical center? It’s the right size . . . . The school building is much too big and would cost waaaayyyyy too much to maintain. History is nice — but the future is nicer!

  7. Don Bender on December 22nd, 2012 8:16 pm

    Steve: The last I knew, that building was for sale for around $100,000! Plus it is full of termites and not nearly large enough. No parking to speak of either. The Town already owned the school. The community center using the school is far more in keeping with the area where it is — in the park. As far as the size of the school, the additions could be removed. The rest of the space could be easily utilized.

  8. Kearn Schemm on December 23rd, 2012 9:46 am

    I am not yet a “come-here” (expect to move down in 2013), but I love CC and own property there. This is not and should not be a fight between the new and old population, but between those who favor transparent, honest government and those who don’t mind (or benefit from) behind-the-scenes deals that appear to be…….

  9. Dee Ewell Pierce on December 28th, 2012 12:49 pm

    I must be confused by all of this back and forth. Do I understand that the Town sold our old school for ten dollars and paid the same developer they made this sale to $41,000? This just doesn’t sound believable. Why and how could this be approved? Did I do the math wrong?

    You get an A+ in math. –EDITOR

  10. Mike Kuzma, Jr on December 28th, 2012 2:58 pm

    Ms. Pierce — A government big enough to give you anything is big enough to TAKE anything.

  11. Don & Deborah Bender on December 29th, 2012 8:35 am

    Yes Dee, the town “sold” the 100-year-old historic school, basketball court and the parking lot for the playground and park for the grand sum of $10. This property is assessed at over $900,000! The town also cut the water & sewer hook-up fees by 75%! Plus they threw in $41,000 insurance proceeds from a earthquake that happened over a year ago that damaged the building. Instead of doing the repairs they just sat on the $41,000. You have no idea how much our small group Old School Cape Charles has fought this decision and we continue to fight it. We have two lawsuits pending and will have a hearing in January.

    Sure wish you still lived here! We know you would have joined in the fight to save our school. :-(

  12. Judy McKnight on December 29th, 2012 11:50 am

    Thanks Kearn for stating so bluntly what I have been feeling and thinking, but did not want to admit: “This is not and should not be a fight between the new and old population, but between those who favor transparent, honest government and those who don’t mind (or benefit from) behind-the-scenes deals.”

    From the council’s secret negotiations, to their total disregard for the citizens who don’t approve of the sale, to the use of town staff time to support the efforts of the buyer, it makes a part-timer wonder!