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Roanoke Couple's Land Condemned -- but Why?

The Roanoke-Times
December 02, 2009
By Laurence Hammack

Carilion Clinic says it has no interest in land that was condemned for its project.

It seems the only people who want the property that is flanked on two sides by Carilion Clinic's growing medical complex are the current owners, Jay and Stephanie Burkholder.

Yet the government is taking the land from the Burkholders.

Last month, a Roanoke judge approved the condemnation of the 3-acre tract as part of a redevelopment plan closely linked to Carilion's proposal to build a business park and medical school where aging industries once operated along South Jefferson Street.

Only now, Carilion says it has no interest in the Burkholders' property, which will soon be acquired through eminent domain by the Roanoke Redevelopment and Housing Authority.

"Carilion does not need the land and has not requested it from anybody," spokesman Eric Earnhart said this week.

Although Earnhart said Carilion never expressed an interest in the Burkholders' property, testimony and documents presented during the condemnation proceedings suggest otherwise.

"This is shocking," Joe Waldo, an attorney for the Burkholders, said of the health system's statement.

"If Carilion had come forward during the trial this summer and said they didn't want the property, the Burkholders would still own the property today. And the Burkholders would not have had to spend tens of thousands of dollars to fight to keep their property."

Even though Carilion has no interest in the land, it will likely purchase the property from the housing authority to honor a contract with the city that was part of a plan to redevelop the area, Earnhart said.

Mark Loftis, an attorney for the housing authority, said the land is being taken as part of a master redevelopment plan for the area, which doesn't necessarily have to involve Carilion. One possibility is that Carilion would acquire the land and then sell it to a developer, as it did with a hotel being built in the area.

But as for the Burkholders' land, "It would be fair to say there is no firm plan that's been approved for what's to be done with that property," Loftis said.

Blight determination key to eminent domain

The convoluted case dates to 1999, when Carilion and the city of Roanoke announced plans for the Carilion Biomedical Institute, a concept that evolved over the years into the current Riverside Center complex.

Using public money provided by the city, the housing authority bought land in the area, helped the businesses move, then leveled the buildings and sold the property to Carilion.

The land was often sold at a loss, but with the understanding that Carilion would invest at least $30 million to build a new economic machine for the city. The complex now includes four huge, modern edifices -- an office building, a second building for Carilion physicians, a parking deck and a medical school currently under construction.

Because the housing authority determined years ago that the area was blighted, it had the power to take property by eminent domain from owners who chose not to make a deal with the government and relocate.

When the Burkholders refused to sell a plot where the Surfaces flooring business now operates, the housing authority filed court papers to have it condemned.

During a hearing that lasted several days over the summer, the Burkholders contended that the city and Carilion forged a mutually beneficial deal in secret, then had the housing authority do their bidding.

While finding some faults with the process -- including improper efforts by the city to influence the housing authority -- Judge William Broadhurst ruled that the redevelopment area was declared blighted in accordance with state law and that the condemnation could go forward.

Blogger's reporting raises new questions

At the time of Broadhurst's ruling, Earnhart was asked by The Roanoke Times what plans Carilion had for the property. In an e-mail, he wrote that "we currently do not have any specific plans," apart from an access road that might be built on the land.

"We have sufficient space in the current Riverside Center facilities for our immediate and short-term future needs," he wrote.

Last week, Dan Smith, the editor of a regional business magazine, posted an item on his blog in which Nancy Agee, the chief operating officer at Carilion, said she was opposed to the condemnation of the property and had requested it be dropped.

Earnhart said this week that Agee was expressing her personal view, and that in fact Carilion has not asked the housing authority to drop the case.

The Carilion spokesman also said that Agee was confirming to Smith what the health care system has said all along: "We have no interest in the property, and never have."

However, documents obtained by the Burkholders in their legal battle over the land suggest otherwise.

In February 2000, during negotiations between the city and Carilion, City Manager Darlene Burcham wrote to the health system's CEO, promising that the housing authority would obtain land in the area to satisfy the master plan of the Carilion Biomedical Institute.

Burcham wrote that all of the land in the first phase of the project -- which included the Burkholders' property -- would be available to Carilion within three to five years.

Brian Wishneff, a consultant who was representing Carilion in the talks, responded that the health care system needed to have all the land within a year.

"The potential for the institute cannot be realized if surrounding properties are not acquired and cleared by the city before the first building is completed," Wishneff wrote in a response to Burcham.

In outlining the wishes of Carilion, Wishneff explained that potential tenants of the park "must be assured that future development and beautification will occur and that the land will be available for expansion."

The Burkholders said that exchange -- as well as other evidence presented during the hearing before Broadhurst -- shows that Carilion had plans for their land, at least at one point.

"For them to act like they had no intention of using the land is just absolutely preposterous," Stephanie Burkholder said Tuesday. "It's just shocking."

When the housing authority was trying to buy the land before it was condemned, she said, she and her husband were shown maps that placed it inside the area identified by Carilion for its medical park. "Their fingerprints are all over this," she said.

Earnhart countered that the letters between Wishneff and Burcham were part of early discussions about the project, and that much has changed.

"I believe what is reflected in that letter, is NOT that Carilion was interested in acquiring all the surrounding properties for its own use, but that Wishneff, on behalf of CBI, was expressing the importance that all the property be developed in accordance with the redevelopment plan," Earnhart wrote in an e-mail.

Further, Earnhart said, Carilion decided not to seek the Burkholders' land because the couple had talked about developing the land themselves.

Stephanie Burkholder said she and her husband did have hopes to lure a medical office of some kind to their land, but they could not find anyone who wanted to locate there.

Lawyer critical of 'empty exercise' by city

With no one interested in the site except for the Burkholders, the property owners now face the real possibility of losing their land for a project that has yet to be identified.

"So what we really have is an empty exercise of eminent domain by the city," Waldo said.

But Loftis, the housing authority's attorney, said the authority was directed by the city to condemn the land as part of the overall redevelopment of the area, whether it involved a Carilion venture or not.

"There is a redevelopment plan, a proposed master plan, for the area, and this property is part of that," Loftis said. He said it's not unusual for land to be taken through eminent domain when there is no firm plan for what happens next.

In fact, the housing authority has taken steps to condemn a second parcel on Williamson Road that sits in the project's path.

Carilion says it has no interest in that property, either.