Tar Heel Tattler - June 2006

Town makes sure its boat slips stick
By Arthur O. Murray

“I think it’s highway robbery.” That’s Topsail Beach Mayor Butch Parrish’s opinion of municipalities using eminent domain — forcing property owners to sell land to the government — for private projects. But he has no qualms about using it to prevent his town’s loss of a vital privately owned amenity.

In May, town commissioners condemned Bush Marina and adjacent property owned by William Lee on the barrier island’s sound side. If Lee had sold the property for development, the town would have lost its only boat ramp, a big negative for tourism in a coastal community. Topsail Beach plans to operate the marina.

The land, which Lee bought two years ago for $800,000, is four lots totaling about 32,000 square feet. His Raleigh lawyer, Kieran Shanahan, says other potential buyers offered Lee, a Johnston County tobacco farmer, more than twice the town’s best cash offer of $2 million.

Things grew complicated when the town botched its first chance to buy the marina. Last year, Lee signed a contract to sell it for $2 million, but the town couldn’t close by the Nov. 4 date in the contract.

Parrish says the town missed the date because it was waiting for state grants that would have covered $500,000 of the purchase. “The lead time was three months. We had these grants approved but couldn’t close on the property until we had the contracts in hand.” They didn’t come until late 2005.

Both sides sued, but the town wanted to make sure the boat access stayed open, so it pursued eminent domain. Under state law, Topsail Beach could take title to the property after the May vote but was committed to paying Lee the “fair-market value” set by a jury.

Determining that would have made for an interesting case. Shanahan says the original contract set the value at $4.2 million but stipulated that the town would pay Lee $2 million and give him credit for a $2.2 million donation. The donation, Shanahan says, would have provided Lee a tax break.

But a jury won’t decide the property’s value. Days after the eminent-domain vote, the two sides settled to abide by the contract.

The town hopes to open the ramp for public use for the summer tourist season. “It’s most appropriate for a municipality to be able to use eminent domain,” Parrish says. Shanahan, who was on the Raleigh City Council from 1995 to 2003 but never had to vote on an eminent-domain case, disagrees. “I couldn’t think of a more clear case of government abuse.”