Reese v. Mecklenburg County

694 S.E.2d 453

Jerry Alan REESE, Plaintiffv.MECKLENBURG COUNTY, North Carolina; Mecklenburg County Public Facilities Corporation; 300 South Church Street, LLC; and R.B.C. Corporation, Defendants.

No. COA09-499.

Court of Appeals of North Carolina.

June 15, 2010.

COPYRIGHT MATERIAL OMITTED

Appeal by plaintiff from orders entered on 14 May 2008, 9 June 2008, 15 September 2008, and 23 September 2008 by Judge W. David Lee in Mecklenburg County Superior Court. Heard in the Court of Appeals 26 October 2009.

Jerry Alan Reese, pro se.

Womble, Carlyle, Sandridge, & Rice, PLLC, by James O. Cooney, III, G. Michael Barnhill, Charlotte, for defendant-appellees, Mecklenburg County, Mecklenburg County Public Facilities Corporation, 300 South Church Street, LLC, & R.B.C. Corporation.

Robinson, Bradshaw & Hinson, P.A., by Ward McKeithen, Charlotte, for defendant-appellees Mecklenburg County and Mecklenburg County Public Facilities Corporation.

ERVIN, Judge.

This appeal involves a challenge to the conveyance of undeveloped real property located within the Second and Third Wards in the City of Charlotte by Plaintiff Jerry Alan Reese, a board-certified real estate attorney and real property developer.¹ The present case arises from a series of transactions entered into by the City of Charlotte, Mecklenburg County, and the Charlotte-Mecklenburg Board of Education for the purpose of consolidating jointly-held properties and constructing a minor-league baseball stadium,² an urban park, a new Education Headquarters, and other mixed-use developments that are intended to spur economic revitalization of the area. Plaintiff, who favors a competing development plan, has challenged a number of actions by the County and the Mecklenburg County Public Facilities Corporation in this case. After careful consideration of the record in light of the applicable law, we conclude that the challenged orders should be affirmed.

I. Factual Background

A. Substantive Facts

At the time Plaintiff filed his complaint, 300 South Church Street, LLC, owned two parcels of land situated within the Third Ward of the City of Charlotte, designated as (1) 316 South Church Street and (2) 316 South Poplar Street. Defendant R.B.C. Corporation owned five parcels of land located within the same area, designated as (1) 212/216 West Martin Luther King Jr. Boulevard; (2) 224 West Martin Luther King, Jr. Boulevard; (3) 301 South Mint Street; (4) 316 South Poplar Street; and (5) 322 South Church Street. These seven parcels of real property are contiguous and are referred to collectively in Plaintiff's complaint as the Assemblage.

In early December 2007, RBC and Spectrum Investment Services, Inc., entered into an agreement, known as the RBC Parcels Contract, under which Spectrum agreed to purchase the five parcels owned by RBC. The County and 300 South Church Street negotiated an agreement, which is referred to in the complaint as the Assemblage Contract, under which the County would purchase the entire Assemblage from 300 South Church Street. The Assemblage Contract contemplated that, prior to closing, Spectrum would “assign to Defendant County its rights under the RBC Parcels Contract and Defendant County [would] assume the obligations of Spectrum under the RBC Parcels Contract.” On 15 January 2008, the County Commission adopted a resolution, which is referred to in Plaintiff's complaint as the Assemblage Purchase Resolution, authorizing the purchase of the parcels owned by 300 South Church Street and RBC. On that same day, the County executed a joinder to the RBC Parcels Contract, under which “Spectrum assigned its rights to the County and the County assumed the obligations of Spectrum to RBC.” In addition, the County Commission also adopted a resolution authorizing the sale of certain publicly-owned property located in the Second Ward to Brooklyn Village, LLC, which is referred to in Plaintiff's complaint as the Brooklyn Village Contract.

As part of the process of consummating this series of transactions, the County submitted an application seeking authorization to issue $161,310,000 in certificates of participation (COPS) to the North Carolina Local Government Commission on or about 12 December 2007. In its application, the County asserted that approval of such funding was necessary in order “to continue to provide and enhance court, school, community college, library, infrastructure and park facilities.” On 18 December 2007, the County Commission adopted a resolution which included a “request[ ] [that] the Local Government Commission of North Carolina [ ] (LGC) approve such proposed installment financing contracts.”

On 2 January 2008, Plaintiff provided the LGC with written notification that he opposed the proposed COPS financing and requested a hearing at “which Plaintiff and all other interested parties could be heard.” On 8 January 2008, the LGC's Executive Committee approved the County Commission's application. Immediately after receiving official notice of the LGC's action, Plaintiff filed a notice of appeal and a request for de novo review by the full LGC. The LGC denied Plaintiff's request for de novo review on 25 January 2008. On 4 February 2008, Plaintiff filed a Petition for a Contested Case Hearing with the Office of Administrative Hearings seeking review of the LGC's decision. On 14 and 21 February 2008, the County and the Financing Corporation sold approximately $161,000,000 in COPS. On 25 July 2008, the Honorable Fred Morrison Senior Administrative Law Judge with the Office of Administrative Hearings, issued a Decision Granting Summary Judgment for Petitioner which reversed the LGC's decision and ordered it to provide Plaintiff with a de novo review of the County's application for approval of the COPS financing by the full LGC. In accordance with the relevant provisions of the Administrative Procedures Act, the matter was referred to the LGC for the making of a final decision.

B. Procedural History

On 2 January 2008, Plaintiff filed a motion seeking the issuance of a summons and an extension of time to file a complaint and a notice of lis pendens applicable to tracts of real property owned by RBC and 300 South Church Street. On the same date, the office of the Clerk of Superior Court of Mecklenburg County granted Plaintiff's motion. On 22 January 2008, Plaintiff filed a verified complaint in which he which asserted the following five claims for relief, which we summarize as follows:

1. The purchase price that the County had agreed to pay under the Assemblage Purchase Resolution and the related Assemblage Contract exceeded the actual value of the Assemblage by approximately 27%, or $4,024,988, as evidenced by the price paid to the County by the North Carolina Department of Transportation for a nearby tract of property “and the determination of the Mecklenburg County Real Estate Services Department,” so that “the purchase price approved by the Assemblage Purchase Resolution has no relation to the true fair market value of the Assemblage, but is rather a contrived amount designed solely to accomplish a de facto swap of the Assemblage for the properties to be acquired by Brooklyn Village, LLC from the County pursuant to the Brooklyn Village Contract, so that the Assemblage Purchase Resolution should be nullified and set aside “on the grounds that the inflated purchase price is excessive and constitutes a manifest abuse of discretion by Defendant County and its Board.”

2. The County already owns a 7.8 acre tract of land adjacent to the Assemblage which was acquired for use as a public park that has a fair market value of approximately $30,000,000 and which remains suitable for use as a public park, so that the execution of the Assemblage Contract should be nullified and set aside “on the grounds that the purchase which is the subject of such contract is redundant, unnecessary and a material waste of $19,000,000 in public funds critically needed for other public purposes, and a manifest abuse of discretion by Defendant County and the Board.”

3. The County adopted a Park Land Acquisition Capital Project Ordinance that appropriated $19,000,000 for the purpose of funding the acquisition of the Assemblage in accordance with the Assemblage Contract, with the funding to be used in reimbursing the appropriations to be utilized to purchase the property in question to come from installment financing to be completed during 2008, so that the Park Land Acquisition Capital Project Ordinance should be nullified and set aside “[s]ince the transaction underlying [that ordinance] is unlawful and since the source of reimbursement is also unlawful.”

4. The application and supporting materials submitted to the LGC by the County in support of its application for approval of COPS financing are deficient in a number of respects, so that the COPS Financing Resolution “is unlawful, invalid and a manifest abuse of discretion by the Board of Defendant County” and should “be declared unlawful and set aside.”

5. Since N.C. Gen.Stat. § 159-149 prohibits the consummation of COPS financing without final and unappealable approval from the LGC and since such approval had not been received due to Plaintiff's request for review of the County's application, the County and Defendant Mecklenburg County Public Facilities Corporation should be preliminarily enjoined from consummating the proposed COPS financing.

On 19 March 2008, the County and the Facilities Corporation filed a joint answer and counterclaims and 300 South Church Street and RBC filed separate answers and counterclaims. In addition, Defendants filed a joint motion seeking the entry of an order striking Plaintiff's notice of lis pendens and judgment on the pleadings. On 21 April 2008, Plaintiff filed a motion seeking the entry of an order striking portions of the answers filed by all of the Defendants on the grounds that they contained “irrelevant, immaterial, impertinent and scandalous material in violation of Rule 12(f) of the...