Courthouse Records Reveal Supervisor Llewellyn Land Deals

The following e-mail message was sent to Warren County Supervisor Ron Llewellyn on his final day in office. He was defeated in the November election, receiving only 41% of the votes.

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Mr. Llewellyn,

Recently I spent some time at the Warren County Courthouse, poring over documents, deeds, and other legal filings relating to your Catlett Mountain property. Not wanting to ascribe to anything not true, I thought it might be prudent to outline my discoveries and ask you to correct any misunderstanding I may have drawn. I certainly do not want to write anything containing incorrect information about you or your activities.

Mrs. Dorothy Johnson, whom you probably never met, passed away a month after filing her will on 2 February 1979, leaving 201 acres on Catlett Road jointly to nephews Lawrence Pettit of Charlottesville, VA and John Corder of Amarillo, TX with provisions for the Executor, Mr. Pettit, to care for several surviving sisters. Upon the deaths of the sisters, the property passed to Pettit and Corder.

Sometime in early 2004, Pettit, as Executor, hired a real estate broker in Roanoke, Va. to market and sell the 201 acres on Catlett Road.

Large parcels of undeveloped acreage are not normally marketed on the Multiple Listing Service, and such was the case here. The Roanoke real estate Broker made discreet inquiries to various players in the Front Royal/Warren County area who might have an interest in buying the property. We know of at least 2 entities that were offered the opportunity to buy the property. One was Warren County; the other was Ron Llewellyn.

On 15 June 2004, the BOS had a closed meeting to discuss the possible purchase of the Catlett Road property. At some point during this closed meeting, you, Mr. Llewellyn, left the meeting before its conclusion. You later revealed you were also considering making an offer on the same property and therefore your interest was in conflict with Warren County’s interest.

The Warren Sentinel quoted you as saying, "I recused myself and left the room as soon as I knew that was the property they were talking about, he said.” My question to you is before you left the meeting what did you learn about the possible County purchase before you realized they were discussing the same Catlett Road property offered to you and Warren County by the Broker from Roanoke?

During the meeting, according to County Administrator Douglas Stanley, possible uses for the property included a public park or a right-of-way for a western bypass roadway, and perhaps other not yet revealed uses.

Ultimately, Warren County made an offer to purchase the Catlett Road Property. According to Mr. Stanley, the offer was based on an appraisal and recent transactions for other large parcels. According to my sources, the going rate for large parcels in mid-year 2004 was in the area of $20k/acre. I assume Warren County’s offer was in this vicinity. If needed, I will make a Freedom of Information Act request to have the offer’s particulars revealed.

I am not aware of anyone other than you and Warren County placing a bid for the Catlett Road/Pettit/Corder property. Apparently the property had so many negatives attached to it that development potential was absent as regarded within the developer community. These negatives included land locked parcel with no access to a public road, steep sloped terrain limiting housing density potential, the land was adjacent to the former Front Royal town dump, adjacent to the Avtex toxic waste Super Fund site, and located outside the water/sewer service area of Front Royal. No contiguous parcels had municipal water/sewer.

Six weeks after the closed BOS meeting, on 3 August 2004, Catlett Road LLC was created. I believe this indicates your offer to purchase was accepted prior to this date. Your corporate attorney Douglas Napier, who at the same time was also County Attorney for Warren County, was recorded as the agent of record for Catlett Road Limited Liability Corporation.

The records seem to indicate your corporation, “Llewellyn, LLC”, was the actual purchaser of the Catlett Road property. The price paid appears to have been $550,000.

“Llewellyn, LLC” then paid for the property by receiving a loan from “Catlett Road LLC”. Catlett Road LLC became the legal owner of record. Mr. Pettit and Mr. Corder each received $275,000 for their shares of the property.

These transactions all occurred on the same date, 7 September 2004. Here is the chronological order as reconstructed from deeds on file at the courthouse:

On 7 September 2004 Llewellyn LLC purchases 201 acres from Pettit & Corder for $550,000. ($27k/acre)

A few minutes later, on 7 September 2004, Llewellyn LLC sells the former Pettit/Corder property to Catlett Road LLC, for $550,000. ($27k/acre)

A few minutes later, on 7 September 2004, Marathon Bank signs loan documents paying $1,650,000 to Catlett Road LLC who uses the 201 acres as security. ($83k/acre)

What information was received by the loan officers of Marathon Bank prior to 7 September 2004 that justified the loan value of $1.650 million? The Warren County appraisal and offer were below the Llewellyn LLC offer of $550k, so it seems clear the true value of the property had been reasonably established as $550k or less.

Of the $1.65 million dollars Catlett Road LLC received from Marathon Bank on 7 September, it paid $550k of it to Llewellyn LLC who then paid $550k to Mr. Pettit and Mr. Corder. Catlett Road LLC kept $1.15 million as an interest only loan.

Eight months later, on 9 May 2005, Brookfield Washington makes a $1.15 million loan with Rappahannock National Bank. Brookfield pays Catlett Road LLC $1.15 million. Catlett Road LLC then pays off the $1.15 million loan with Marathon Bank.

On 14 March 2007, Brookfield Washington, Catlett Road LLC, and Rappahannock National Bank sign a Subordination Agreement covering the $1.15 million Brookfield loan. One week later, on 20 March 2007, Rappahannock National Bank issues to Catlett Road LLC a Credit Line Deed of Trust in the amount of $2.334 million dollars.

The end result of all this financial maneuvering is development partners Catlett Road LLC and Brookfield Washington own 203 acres, worth $550k, encumbered by $2.334 million in debt owed to Rappahannock National Bank.

My question is what happened in the space of just a few minutes on 7 September 2004 that caused the loan value of the 201 acres to increase by 333%, from $550,000 up to $1,650,000?

The single item that, in my opinion, could justify the $1,650,000 value would be the potential of Warren County receiving part of the property as right-of-way for a western bypass route and paying for the construction of the highway, thereby enhancing the commercial development potential as well as improving the potential value of the land for high density home construction. Only thing missing from the recipe is municipal water and sewer.

We are asked to believe the information about possible County use of the Catlett Road property as a western bypass right-of-way was still locked away behind the closed doors of the closed meeting held by the Board of Supervisors. Your corporate attorney, Douglas Napier who was also the County Attorney at that point in time, was present during the closed meeting, as was Administrator Stanley.

So, what possible information was received by the loan officers of Marathon Bank prior to 7 September 2004 that justified the loan value of $1,650,000?

At this point in time these 201 acres were “land locked” and had no access to any public roadway. This access was obtained much later on 10 June 2005 by the purchase of 2 acres from Scott Harris for $220,000. ($110k/acre) This purchase gave the property access to Catlett Road, relieving the land-locked status.

Again, what information was received by the loan officers of Marathon Bank prior to 7 September 2004 that justified the loan value of $1,650,000?

Could it have been the former town dump located on the western side of the property? Could it have been the contaminated Super Fund site on the eastern side of the property border? Could it have been the “by right” 80 homes that could be developed? Brookfield Washington was not on board with you as a partner at this early date, so the property did not bask in the glow of their expertise as a builder.

No, Brookfield had no influence because it was 8 months later on 9 May 2005 when Brookfield paid you $1.15 million as a “Credit Line Deposit Deed of Trust” and became your official partner in the Catlett Road development project. Then, on 10 June 2005 you bought the 2 acres that “unlocked” the 201 acres, solving one of the property’s problems.

Or, could it have been information that the County had placed a bid on the property, which was key to developing a western bypass route? Was it information that the project was supported by County Administrator Stanley as well as by a number of the Board members, as later evidenced by newspaper articles and by statements in the BOS minutes? Did Marathon Bank take comfort in knowing that the County Attorney was also your agent for the property? Did the bankers have this type of information and, if so, where did they get it? Did you give it to them?

I remain completely mystified how it was possible the 201 acres of the Catlett Road property more than tripled in value without any apparent justification; no development partner, no engineering study, no zoning change, no planning commission endorsement, no access to public roadways, no public water/sewer, nothing.

Perhaps you could explain the intricacies of value enhancement of undeveloped property just by changing ownership, without turning a single spade full of dirt or pounding in the first surveyor’s stake?

It was a full 18 months after your purchase on 7 Sept 2004 when Douglas Stanley, on 7 March 2006, made a suitable-for-public-consumption dog and pony show presentation before the BOS. Putting lipstick on the pig, so to speak, Stanley promoted, at considerable length, a western bypass route through your Catlett Road property.

Stanley cited 30-year-old ideas, outdated plans, old traffic studies, and his personal opinions. But VDOT rep Childress countered that there was no engineering analysis of how much traffic would use the bypass. I asked myself: why would Stanley support a road if he did not know how much it would be used? Did the Board or VDOT anticipate this traffic impact during its deliberations on Riverton Commons?

Later, on 3 October 2006 Mr. Carter said he felt the Catlett Mountain project could have a significant impact on the Town because one of its components was a piece of the proposed western bypass. He encouraged everyone to act quickly before rising costs became an issue and the idea was “lost forever”. He then pointed out the bypass route had been under discussion 20 years ago. For me, the question arises: why was the western by-pass idea resurrected and placed so prominently before the public eye? Before interrupting himself to talk about the bypass, Carter had been discussing Town water and sewer service to Catlett Road

While at the courthouse I found a deed that says you recently bought two properties on the western side of Shenandoah Avenue adjacent to the South Fork Bridge. This discovery ties in with the new idea of creating a western bypass route that follows the railroad route through the Royal Phoenix site, emerging on Shenandoah Avenue at the southern end of the South Fork Bridge.

Tonight, Tuesday, December 18, 2007, during your “retirement” speech from the dais of the Board of Supervisors, you endorsed the accelerated replacement of the South Fork Bridge.

Hmmm. Swan Farm in a position for an eastern bypass route, Catlett Road in a position for the western bypass route, and Shenandoah Avenue properties in a position for the Royal Phoenix bypass route.

Is it my imagination or do I see here a pattern of strategic land acquisition and of land value augmentation, carried out by an elected public official/developer who sees his opportunities and takes them?

Best regards,
Bill Pierceall