#8 Story
Bay Creek Lots, Lighthouse Go for Pennies on the Dollar

map annotated

Bay Creek lighthouse cost $1 million when built 10 years ago but sold at auction for $137,500.

Cape Charles Wave

June 2, 2014

The iconic Bay Creek lighthouse, a full-scale replica of the historic Old Plantation Flats lighthouse, sold at auction Saturday for $137,500 to the sole bidder, John Waller of Virginia Beach. Waller said he did not attend the auction with the purpose of buying the lighthouse, but when no one else bid, he did so on a whim. He and his family will use it as a “getaway.”

An additional 22 lots in Bay Creek Marina Village East owned by Paul and Robert Galloway also sold at auction for prices ranging from $2,750 to $37,076, for a total of about $200,000 for all 22 lots. At the height of the market eight years ago a single lot sold for more than that.

Built by Bay Creek developer Richard “Dickie” Foster as a museum in 2004, the lighthouse was never intended to be sold. Instead, it was a visual feature of Bayside Village and the Arnold Palmer golf course. But Foster gave up the lighthouse as part of a December 2013 settlement with his former business partner Paul Galloway.


Lighthouse buyer John Waller with daughter Garland Waller (Wave photo)

According to Galloway, the settlement provides him (and subsequent owners) access to the lighthouse through the gated entrance to Bay Creek South, even though the lighthouse is no longer part of Bay Creek. That means the lighthouse owner could drive through the Bay Creek gate without having to pay the monthly $155 homeowners association fee.

The original 1886 lighthouse was built as a place to live, and the reproduction is true to the original, with the exception of the addition of heating and air conditioning. But there is no plumbing. According to information provided at the auction, water and sewer hookup could be accomplished for about $24,000.

The 22 lots that sold in Marina Village East were the final Bay Creek real estate holdings of the Galloway brothers, each of whom until recently also owned a large home in that subdivision. Aqua Restaurant owner Robert Occhifinto has purchased both Galloway houses for use as vacation rentals.

Marina Village East is the least developed section of Bay Creek, and does not even have a gate to limit access. A few “seed” houses were built by the developers: Paul Galloway’s former house on Charlestowne Drive, Robert Galloway’s former house on Bridgeton Drive, and Bay Creek official Oral Lambert’s former house on Bahama Road. Two other houses, one at the corner of Randolph Avenue and Bahama Road and the other on Fig Street, are owned by private parties.

Auctioneer William Summs of Norfolk, who has been in the business all his life, said he had never seen similar properties go for such low prices. The auction originally advertised minimum starting bids of $20,000, but closer to the time dropped that to $10,000. In the event, they took anything they could get, which was $2,750 for the cheapest lot and $37,075 for the priciest (all prices include a 10 percent buyer’s fee).

Cautious bidders appeared to be taking into account that the auction price would be only the beginning of the cost of owning Bay Creek property. That $2,750 lot will incur an annual HOA fee of $1,860, a lawn maintenance fee of $500, county tax of $270, and town tax of $110, for a total annual expense equal to the purchase price of the lot.

As sellers, the Galloway brothers did not fare as well as Dickie Foster, who recently sold seven lots on Randolph Avenue between Bahama Road and Fig Street to the Town of Cape Charles for $100,000. That’s an average of $14,285 per lot. In contrast, the five nearby Galloway lots on Bahama Road sold for a total of $29,370, or $5,875 per lot – almost a third of what the Town of Cape Charles paid per lot.

Town Council member Joan Natali, who voted to buy the Foster lots, also bought one of the Galloway lots for herself for $4,400.

Another local resident remarked afterward that he was going to have to go home and tell his wife that he just spent $15,000 to buy three lots. But he added that he didn’t think she could object to that, since [some years earlier] she herself had purchased one Marina Village lot for $250,000.



14 Responses to “#8 Story
Bay Creek Lots, Lighthouse Go for Pennies on the Dollar”

  1. Kearn Schemm on June 2nd, 2014 1:57 am

    The Lighthouse will certainly make a neat getaway for the Wallers. Joan Natali was more careful with her own money than the town’s in purchasing her lot. Why didn’t she buy seven? She could have put up a nice sign.

  2. Warner Athey on June 2nd, 2014 2:35 am

    They auctioned the lighthouse at 12:30. When the auctioneer asked, “How much for the lighthouse?” I said $45,000. They tried to get me to raise my bid. I said, “What are the online bidders bidding?” They said there weren’t any. They wanted me to raise my bid to $100,000. I didn’t think it was worth it. No one else was bidding. I said, “I am the man who is here with the cash. Who is bidding against me?” There was no one else. It took them three hours to find a second bidder who now says he was the only bidder. Go figure. We had inspected the lighthouse. The other guy had not. He bought it sight unseen. I think he got stuck. I would have sold it to him cheaper than that.

    Mr. Athey’s account is correct, but because the auctioneer refused to accept his bid, according to the official records of the auction, Mr. Waller was the “only bidder.” –EDITOR

  3. Jack Forgosh on June 2nd, 2014 8:21 am

    While I am not an expert, I would like to think (hope) the bottom in the Cape Charles real estate market is now in place. For the benefit of all, I hope this town can begin to strengthen its roots for the next 100 years (as long as the town can cut up its credit card with unnecessary expenses).

  4. Bobby Roberts on June 2nd, 2014 10:10 am

    This extremely unsuccessful auction of improved resort lots had better be a wake-up call to the Northampton County Supervisors. They’re trying to rezone the whole county for this failed resort real estate business—“pennies on the dollar” isn’t going to do it for the rest of us taxpayers. The Supervisors would do better to take care of the aquaculture, farming and tourism businesses we already have, instead of trying to undermine those business owners with some hare-brained scheme of resort real estate zoning futures.

  5. Warner Athey on June 2nd, 2014 11:24 am

    Bobby, you are a wise man.

  6. Dana Lascu on June 2nd, 2014 11:51 am

    There is a positive side to this: diversified risk for Bay Creek and, implicitly, for Cape Charles, with multiple owners paying monthly dues, and less likelihood of a massive default. I fondly recall riding my bike in the early 2000s on Wafer Board Boulevard in Marina Villages and would be pleased to see the energy and enthusiasm return, along with the old Renovators’ Ball.

  7. David Boyd on June 2nd, 2014 12:50 pm

    Bobby, you hit the nail on the head.

  8. Anouck LeFur on June 2nd, 2014 4:00 pm

    Bobby Roberts: One can always hope that the BOS is paying attention!

  9. Carl Slayton on June 2nd, 2014 11:05 pm

    Cape Charles used to be my most treasured vacation spot in the world! Ten years ago the Chesapeake bay was the most popular and prominent Fisherman Paradise on the East Coast! I am also an avid Golfer who loves the game. When Bay Creek began construction I was happier than a kid in a candy store! I saw Vacation Heaven opening up right before my eyes! Then VMRC stepped in and ruined it all.They started Creel and Size limits on everything except Oyster Toads. Commercial fishing, on the other hand, gets a free rein and they don’t seem to have anywhere else to Dredge and drag nets except the bay now! I live in Western NC and we have the most beautiful mtn. Golf courses in the world! Why would I want to leave here and drive 7 hrs. just to fish catch and release.

  10. Drs. Bill & Pat Wallisch on June 3rd, 2014 11:56 pm

    Just back from Cape Charles. Tried to go see what the big party was last Saturday, but turned away. We thought it was a pig roast or something, but now it turned out to be Good ‘ Ole Boys at work, drinking whiskey and rye: The day the music stopped for a truly bright, open future for Cape Charles. I bid $100 for the old Black (Historic) School. We’d like to make it something special for the people of Virginia. All the best from Colorado, where we still have back room deals, too.

  11. Warner Athey on November 4th, 2014 10:21 am

    Now from what I hear, John Waller never came up with the money to pay for the lighthouse.

    From what we hear, the sale fell through when the buyer (Mr. Waller) was told that he would have to pay Bay Creek for the privilege of driving on their roads to access the lighthouse. That was not stated at the auction. –EDITOR

  12. Paul Galloway on November 8th, 2014 12:04 pm

    The real story is that Bay Creek, LLC, denied Mr. Waller access to the Lighthouse Parcel via an existing easement, and that Bay Creek, LLC, wanted $ 182,000 in cash in order to grant that privilege. In addition, Bay Creek, LLC, was 3 years delinquent on the real estate taxes and Mr. Waller determined that the unpaid taxes and the lack of suitable access were a breach of the Sales Contract. I returned the deposit money to Mr. Waller and thanked him for his patience and understanding.

  13. Jerome Schaum on November 8th, 2014 1:51 pm

    Mr. Galloway,
    Did you fully disclose to Mr. Waller the existing easement matter? Did you make him aware of the parking situation? Did you inform him of the potential problems with obtaining an occupancy permit from the appropriate authorities? Have you fully disclosed all the above-listed issues with buyer(s) subsequent to Mr. Waller?
    Sincerely, Jerome Schaum

  14. Paul Galloway on November 8th, 2014 3:54 pm

    I relied on the diligence of 3 law firms to record a General Warranty Deed in my favor as a result of the Settlement Agreement with the Bay Creek entities. The Deed was recorded without any of the law firms advising me of the delinquent real estate taxes and all 3 firms failed to secure an easement to the Lighthouse Parcel as required by the Settlement Agreement. Bayside Village is an “on-street parking” neighborhood and the lighthouse parcel is a parcel in Bayside Village. The Lighthouse parcel is zoned “PUD Village” and allows for single family, multi-family, hotels, restaurants, clubs, etc. The Town of Cape Charles never issued an Occupancy Permit for the lighthouse, but allowed it to be occupied from 2004 through 2013. All of the above issues were uncovered by my subsequent closing attorney after the Auction and Sales Contract were executed. Thank you for your questions.