Bay Creek Property Owners Get Tax Scare

By GEORGE SOUTHERN
Cape Charles Wave

September 22, 2014

It took a few months, but an obscure legal notice published June 6 in the Eastern Shore Post finally attracted the attention of Bay Creek property owners when they heard that the private roads they drive on might be sold for back taxes.

The legal notice listed 47 properties owned by Bay Creek LLC, the company owned by Richard “Dickie” Foster. Most of Foster’s former holdings have been sold to Keyser-Sinclair, operating as Bay Creek South LLC. Another portion – the former Bay Creek Marina, Shops, and Aqua Restaurant – was foreclosed and sold to Robert Occhifinto in December 2012.

More than half the properties listed in the legal notice are lots on Stone Road coming into town that have nothing to do with Bay Creek other than that Foster owns them. Those lots have now been conveyed to another entity, “HJ Rail LLC,” also wholly owned by Foster — but the tax is still overdue.

Before the Stone Road lots were listed to be sold for back taxes, Foster offered six other Stone Road lots to the Town of Cape Charles for $100,000, and the town bought them for the asking price. The terms of sale required the $100,000 to be applied against Foster’s delinquent tax bill, both to the town and the county.

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But what largely escaped notice until recently is that other properties in the legal notice include Bay Creek Parkway – the principal private road running through Bay Creek, and other common holdings. The blue-green outline on the map at left indicates portions of Bay Creek Parkway and other private roads listed in the legal notice.

When taxes become delinquent for several years, the Northampton County Treasurer’s office employs Yorktown tax attorney James W. Elliott to handle legal proceedings. It is Elliott who announced that “proceedings will be commenced” on July 7 to sell the properties. That does not mean a tax auction would have occurred on that date — only that a lengthy “proceeding” was to have begun at that time.

Some two months later, an alarmed Bay Creek property owner, Andrew Follmer, sent a letter to Dickie Foster and Gary Dorsch (president of Keyser Capital) stating that “both the County Treasurer’s Office and the Law Offices of James Elliott confirmed that taxes from 2011, 2012, and 2013 remain unpaid on these parcels — along with interest, penalties, and attorney’s fees — as published in a public notice in the Eastern Shore Post on June 6, 2014. According to Mr. Elliott’s office, the latest instructions from the county were to file suit to proceed with sale if the taxes were unpaid by Sept. 15, 2014.” The letter was copied to Bay Creek property owners and subsequently passed to the Wave.

A response came September 18 from the law firm of Pender & Coward, who represents the Bay Creek Community Association. (Although the community association includes all the property owners, it is controlled by Dickie Foster and Bay Creek South.)

The Pender & Coward letter uses technicalities to refute statements in Follmer’s letter.  It stresses that no “judicial sale” can occur before the county files to appoint a Special Commissioner, which has not happened.

The letter goes on to state that “The County did publish an advertisement referencing 6 parcels and alleging that they were delinquent in taxes. The advertisement incorrectly listed Bay Creek LLC as the owner of several parcels. In fact, the parcels had long ago been conveyed to the Association or one of the Fairways Condominium Associations. . . . Mr. Elliott’s office is presently communicating with the County to confirm that the necessary records have been properly corrected.”

That explanation seemed to satisfy Follmer, who thanked Foster and Dorsch for “finally resolving this issue.” But not every property owner was convinced. One close observer asked:

– – Since deeds are recorded by the county, how could the county have “missed” the filing of change of ownership?

— Why would Bay Creek LLC receive years of delinquent notices and collection letters without notifying anyone at the county that the notices were in error?

– Why, after 90 days of publication by the county, has Bay Creek had to enlist legal counsel to explain a public announcement, if the announcement was in error? A copy of each recorded deed conveying the title should have been attached to the Pender & Coward letter to confirm such conveyance.

While the Pender & Coward letter addresses the status of six parcels, it does not mention two other parcels also part of the county’s Notice of Judicial Tax Sale: parcel 90-02-01, Bay Creek Parkway Extension, and parcel 90-15-M1B2, the park area in Bayside Village.

This is not the first time this year that Northampton County’s tax records have been disputed. In April the county listed Riverside Shore Memorial Hospital as owing $108,000 in back property taxes. The hospital responded that it was a tax-exempt organization and had never before received a tax bill from the county. The hospital spokesman suggested that the tax bill was in retaliation for Riverside’s upcoming move to Accomack County.