The long legal battle between a development group and Effingham County commissioners appears to have ended.
Commissioners voted unanimously Friday afternoon to accept the offer from the Old Augusta Development Group and pay $7 million for 471 acres known as the Grandview tract.
Commission Chairman Wendall Kessler said Susan Cox, the Statesboro attorney representing the group, brought the settlement offer to the commissioners. Commissioners met in hastily-called executive sessions Thursday and Friday to go over and eventually approve the offer.
Old Augusta Development Group filed a lawsuit against the county more than four years ago, claiming the county had breached a contract and was guilty of promissory estoppel. They had been asking for $10.5 million in damages.
Jury selection was scheduled to start Monday, with the trial likely to have started later that day. The jury trial was expected to take more than a week. The commissioners’ vote Friday pre-empted the trial.
“I am happy not to have to go to court,” Kessler said. “This took the uncertainty out of it and gave us a certainty.”
Kessler said he did not know how the settlement would be split up among the plaintiffs.
“We don’t know who gets what,” he said.
The chairman said the county does have the financial resources to make the purchase.
“It will not put the county in a bad financial position,” he said. “We have money in a special tax district to take care of this.”
The county does not want to hold the property for an extended time, Kessler pointed out.
“We need to get rid of it,” he said. “We don’t want to be in the land-owning business.”
The county could close on the land in 30 days, but “there are a lot of moving parts to this,” Kessler added, noting one of the holders to the Old Augusta Development Group is in California.
“There are bankruptcy courts involved in this that are going to have to give their blessings,” he said. “The plaintiffs have agreed and decided to settle for this. It’s done, except for the paperwork.”
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Kessler said that while he felt confident in the county’s position going into trial, agreeing to the settlement offer takes the uncertainty out of the issue.
“I felt good with the county’s position. But I have sat in trials before that didn’t come out with the outcome I thought,” he said. “Any time you go to a trial, there is uncertainty. I felt good with our position and I’m sure the plaintiffs felt good with their position. This was the best way to settle it.”
Settling the Grandview lawsuit also allows the county to move ahead with other projects, Kessler said. The settlement also eliminates any possible appeals stemming from a trial, which could have dragged out the issue for another two years.
“It’s hard to move forward with projects we need to move forward with the uncertainty of this lawsuit. This puts this behind us,” he said. “It’s better to have certainty than uncertainty. It greatly reduces our unknowns.”
The Old Augusta Development Group purchased 471 acres off Fort Howard and Old Augusta roads in 2005. The land did not have water and sewer service. According to court filings, the group intended to sell the property as soon as possible, but the group could not sell it for the amount it was purchased without water and sewer. “Subsequently, the shareholders of OADG found themselves ‘dead in the water’ and brought this action against Effingham County,” according to a motion for summary judgment
The group purchased the land for more than $7.5 million, or $16,000 per acre. The group’s investors financed more than $6 million through a loan from Sea Island Bank and raised $1.5 million from themselves.
When Grandview was purchased, it was approximately six miles from the nearest county water and sewer lines. The Old Augusta group claimed it bought the property in reliance upon a county promise to extend water and sewer lines to the tract.
“Defendants made repeated assurances and representations that they would supply water and sewer to the property,” the plaintiffs alleged. “Defendants had actual knowledge that plaintiff was relying on the assurances and representations that water and sewer would be delivered.”
The lawsuit also said the county has “clearly abused their discretion in refusing to provide water and sewer after repeatedly representing that they would do to plaintiff, Sea Island Bank and (the Georgia Environmental Finance Authority).”
The cost of extending the liens was projected at more than $6 million and the county claimed it never got the necessary information from the developers about the needed lines. According to a county response filed, “the goal posts changed,” one of its consulting engineers said. “We never got the developer to tell us where we were going to tie into his master plan,” the engineer said. “We never got a master plan from the developer as to where to put the pump station.”
Dozens of depositions had been taken and motions filed in the four years since the lawsuit was first brought against the county.
“I am relieved to have this chapter in Effingham County’s history done,” Kessler said.