While residents wait for answers, Virginia Beach City Council to consider cost-sharing options in search for Ashville Park flooding fix

COURTHOUSE – The City Council on Tuesday, June 19, voted to delay two related decisions that could determine how the flood-prone Ashville Park neighborhood near Pungo continues to develop.

One item would fix flooding issues in the existing area of the subdivision, which boasts about 299 households, and this would provide relief to those citizens who bought into a neighborhood later found to have drainage problems. City officials have made it clear this initial work, valued at $11 million, will happen, but at issue is whether Virginia Beach should enter into a cost sharing agreement with the current developer of the neighborhood or use only tax dollars.

Drainage problems have been blamed on a previous developer, though the city is responsible for the system. An initial drainage fix would clear the way for about 100 units to be built in the next section in Ashville Park, but the City Council also must weigh in on a request to change those existing plans as the current developer desires.

That related decision, also postponed in June, would determine whether California-based HomeFed Corporation, which bought into Ashville Park after the first developer went belly up, can get changes to a conditional zoning approval to alter already planned phases of the neighborhood.

Today, the City Council is expected to discuss options about sharing costs with the developer, according to a letter by City Manager Dave Hansen that was delivered to the council on Friday, June 29. If the council makes a decision, the body might make the land use decisions in August, Hansen wrote.

City staff is presenting three senarios for cost participation to the council today, which are, as Deputy City Manager Tom Leahy wrote in a memo, “superior to a scenario in which the city constructs Phase 1 without developer participation and/or cooperation.” The staff recommends a proposal that would work out to a 72 percent-28 percent split between the city and the developer.

It is not certain the council supports changes that essentially would guarantee the developer could build additional lots in the next phase, but HomeFed already has the right to build the vast majority of the units, which has been a point of confusion in some media coverage of the issue.

City Councilmember Barbara Henley represents the Princess Anne District, which includes Ashville Park. She said the city is committed to completing the initial phase of a plan to improve the drainage system for existing residents. However, she was among those who raised concerns that the agreement was tied to approving HomeFed’s request.

“I think what we do with this is really going to be a precedent for other applications that are going to file,” Henley said during the meeting in June. “Are we going to continue to go forward with development in areas that we know have serious potential for flooding?”

Sticking points for some members of the City Council were clear during that regular session of the council and an informal session earlier in the day. After lengthy, spirited discussion, the council voted to defer both matters until today, giving Hansen time to reengage the developer and try to determine a cost sharing agreement based upon the units already approved under the existing zoning agreement. That is among the options under discussion today.

With numerous Ashville Park residents in the chamber, it was Henley who moved to defer during the meeting this past month. That motion passed, 7-2, over the nay votes of Vice Mayor Jim Wood, who represents the Lynnhaven District, and City Councilmember Bobby Dyer, who represents the Centerville District. Councilmember Shannon Kane, who represents the Rose Hall District, was absent.

Before the vote, Henley said the city should look at Ashville Park while ensuring solutions do not impact nearby areas.

“The council is pretty much in agreement that we need to move forward with the flooding issues in Ashville Park by doing phase one,” she said. “I think what we’re wrestling with is whether we do the deal with the developer … That’s the question, but we are in agreement that we need to fix the situation in Ashville Park as soon we can.”

Henley said the city was making land use decisions before reports about flooding issues and sea level rise were completed.

City Councilmember Rosemary Wilson said the council should listen to the residents, and she expressed concern, as did Wood, about delays. “Would you consider just deferring it until these studies come out?” Wilson asked Henley at one point.

“I would rather defer it until we do have the additional information than approve it at this time,” Henley said.

City Councilmember Ben Davenport, who holds an at-large seat, said he was against deferring it that long. He said he wanted to get going on initial fixes for the neighborhood. In response, people in the audience applauded.

City Councilmember John Moss, who holds an at large seat, said he agreed with Henley’s concerns. “This issue is totally distinct from whatever we do with cost participation,” Moss said. “We never should have let this cost participation agreement influence how we evaluate the land use. If we have to pay it all out of our pocket, we have to pay it all out of our pocket, but we should maintain the integrity of the land use plan.”

“Living in fear every time it rains is not a way to live when you buy a dream home out there,” Dyer said, adding that continuing to delay sent the wrong message.

Eddie Bourdon, an attorney speaking for HomeFed, said the request was not a rezoning, but a request to change already approved conditions on the development.

“The zoning was in place when HomeFed purchased the property,” he said. “It is not an application to increase the density in Ashville Park by one single unit.”

The goal is to move units from areas with poorly draining soils in one area to better-drained areas, he said. It also would reduce the developed area and increase open space, he added. He said bypassing cost sharing would make accomplishing the fixes take longer and cost more. It made sense, he said, “to take the scarlet letter off of the homeowners’ backs.”

“If the city wants to put all the infrastructure in yourself and pay for it, that’s your call,” he added. “But we’re still going to be able to develop Village C and, eventually, D and E without putting any money in. This helps get it done quicker. It saves the city money.”

Chris Foulger, president of HomeFed, said the company would cooperate by allowing access to property to make improvements.

“We support you moving forward with the phase one improvements,” he said. “We have the right to build the other developments. If you want to do all the improvements without us, feel free. If I was a taxpayer of Virginia Beach, I would be a little concerned with the millions of dollars extra that you’re incurring. And so I hope you guys think about that.”

“You guys have money on the table for a plan that everybody at Ashville seems to support,” Foulger added.

Henley discussed what the city might pay the developer through cost sharing, such as paying for an area included in calculations that helped the development get density credits. And whether the developer might provide that at no cost, such as easements.

“You can’t have your cake and eat it, too,” Foulger said.

“You’re having your cake and eating it, too,” Henley replied.

Foulger said he realized some people did not like the density of the planned development, but that was determined before HomeFed bought the property. “Holding Ashville Park residents hostage for that is not right,” he said.

Ashville Park residents spoke in favor of the cost participation agreement. Craig Leonard, who lives in the neighborhood, noted the city was walking away from money to get the fix moving. “If that was business, my boss probably would have fired me,” he said.

Hansen offered trying to rework the cost share agreement and having further discussions with the developer. “People don’t want the additional units,” he said. “We hear that, but the existing 299 families, they urgently need us to move into phase one.” Thos discussion have been made, and the council will discuss their result today.

Modifications stripping away age restrictions came at the request of a Wells Fargo subsidiary following the foreclosure, according to a city staff report. HomeFed Corporation took over the remaining undeveloped part of the project in 2012 shortly after the City Council voted to remove age restrictions.

In 2015, HomeFed sought a change – the one that only now is being considered – effectively shifting units from other villages into Village C, the next to be built. Village C would go from 94 to 116 units, though the overall number of units in the development would remain at 499.

Tropical Storm Julia and Hurricane Matthew caused a one-two punch that delivered severe flooding in 2016. In an interview earlier this year, Leahy, the deputy city manager, said city officials worked to determine what was wrong with the system before the storms.

“We knew something was wrong with the Ashville system,” he said. “There had been nuisance flooding for several years. There was a lot of work trying to find out what that was. Public works was trying to see were these interconnecting pipes that connect these lakes, were they plugged? Were they clogged?”

Though there has sometimes been confusion about this, HomeFed is not responsible for the system they inherited because they did not develop it and the city accepted the system.

“The system was deficient in many respects,” Leahy added. “There are not enough inlets, and they’re not large enough. … The water that’s flowing on the streets cannot leave the street fast enough because there’s not enough inlets. The pipes themselves are not big enough to carry the water to the lakes.”

And the lakes, too, cannot move water along fast enough in a development that is poised to continue to grow near Pungo.

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