CITY OF CHARLOTTESVILLE, VIRGINIA
CITY COUNCIL AGENDA May 2, 2011
VIDEO May 2, 2011

Agenda Date: May 2, 2011
Actions Required: Yes (Approval of Resolution)
Staff Presenter: Craig Brown, City Attorney
Staff Contacts: Craig Brown, City Attorney; Aubrey Watts, Chief of Operations / Chief Financial Officer
Re: Authorizing condemnation proceedings to acquire that portion of Kmart Corporation’s leasehold interest at 1801 Hydraulic Road (City Real Property Tax Map 41B, Parcel 2), consisting of up to approximately 1.487 acres, that is within the area improved with a right-of-way designated as Hillsdale Drive Extended, and related improvements

Background: On December 4, 2000 City Council passed a Programming Resolution requesting the Virginia Department of Transportation (“VDOT”) to establish an urban system highway project for the construction of Hillsdale Drive Extended from Greenbrier Drive to Hydraulic Road, a distance of approximately 4,500 feet. In October 2005 and October 2007 this extension of Hillsdale Drive was identified by City Council as a transportation improvement priority during VDOT’s funding allocation process, and the road project is currently a part of VDOT’s approved Six Year (FY 2008 – 2013) Improvement Plan for the City. Hillsdale Drive Extended is also identified in the Charlottesville Albemarle Regional Transportation (“CHART”) 2025 Plan, as approved by the Metropolitan Planning Organization Policy Board. The City has received state funding for preliminary engineering for the road under the Urban Construction Initiative (“First Cities”) Program, but state funding for right-of-way acquisition and construction is not anticipated before FY 2015 at the earliest.

The first phase of Hillsdale Drive Extended, from Hydraulic Road to the rear of Parcel 2 on City Tax Map 41 B (the parcel where Kmart is located, also known as 1801 Hydraulic Road) has been built by Meadowbrook Creek, LLC, the developer of the new Whole Foods Market. The Charlottesville Economic Development Authority, with funds provided by the City, agreed to reimburse Meadowbrook Creek for the costs of the road project, up to a maximum of $2 million. In return Meadowbrook Creek agreed to construct the new road in accordance with all city and state standards, and to dedicate the road to the City as a public right-of-way.

Last year, after Hillsdale Drive was under construction, Kmart Corporation filed suit against Meadowbrook Creek, alleging that the road and related improvements were being built on property that is a part of Kmart’s lease. Kmart is a subtenant to Meadowbrook Creek, who holds a long term ground lease on the entire site. The Court declined to enjoin construction of the road, and it has now been completed in accordance with all city and state standards. The lawsuit between Kmart and Meadowbrook Creek remains pending in Charlottesville Circuit Court.

Discussion: Hillsdale Drive cannot be dedicated to the City as a public right-of-way if any portion of it is still within the area that is subject to Kmart’s lease. Meadowbrook Creek has attempted to acquire that portion of Kmart’s leasehold interest, but has not been successful. An appraisal of that portion of the lease indicates that it has a fair market value of approximately $20,000. At the request of the developer, the City also made an offer of the appraised value to Kmart, so that Hillsdale Drive could be dedicated and accepted as a public street. As of April 26, 2011 Kmart had not responded to the City’s offer.

City staff is seeking City Council’s approval to institute a condemnation action to acquire title to that portion of Kmart’s lease that is within the area where the new Hillsdale Drive right-of-way and related improvements have been constructed. State law provides that condemnation proceedings must be authorized by the governing body of the locality after a public hearing. While City Council’s adoption of the attached Resolution will authorize the filing of a condemnation action in Circuit Court, we will remain open to further discussion with Kmart should they wish to avoid litigation.

Alternatives: City Council can decline to adopt the attached Resolution authorizing the initiation of condemnation proceedings.

Budget Impact: The developer of the site has agreed to fund the cost of the acquisition of the leasehold interest for this portion of Hillsdale Drive Extended, including attorney fees incurred by the City in the condemnation proceedings.

Recommendation: City staff recommends adoption of the attached Resolution following a public hearing. Attachments: Proposed Resolution authorizing condemnation proceedings

A RESOLUTION AUTHORIZING THE INITIATION OF CONDEMNATION PROCEEDINGS TO ACQUIRE THAT PORTION OF THE LEASEHOLD INTEREST OF KMART CORPORATION AT 1801 HYDRAULIC ROAD (CITY REAL PROPERTY TAX MAP 41B, PARCEL 2), CONSISTING OF UP TO APPROXIMATELY 1.487 ACRES AND BEING THE PORTION OF THE LEASHOLD ESTATE [9 acres] THAT IS WITHIN THE AREA WHERE THE NEW HILLSDALE DRIVE RIGHT-OF-WAY AND RELATED IMPROVEMENTS HAVE BEEN CONSTRUCTED.

WHEREAS, in December 2000 the Charlottesville City Council passed a Programming Resolution requesting the Virginia Department of Transportation (“VDOT”) to establish an urban system highway project for the construction of Hillsdale Drive Extended from Greenbrier Drive in Albemarle County to Hydraulic Road in the City; and,

WHEREAS, Hillsdale Drive Extended has previously been identified as a transportation improvement priority by the City Council, and is currently identified in VDOT’s approved Six Year (FY 2008 – 2013) Improvement Plan for the City; and,

WHEREAS, Hillsdale Drive Extended is also identified as a new road project in the Charlottesville Albemarle Regional Transportation (“CHART”) 2025 Plan, as approved by the Metropolitan Planning Organization Policy Board; and,

WHEREAS, the City has received and expended state funding for the preliminary engineering for Hillsdale Drive Extended; and,

WHEREAS, the construction of Hillsdale Drive Extended will relieve traffic congestion on U.S. Route 29; improve public safety; facilitate the movement of local traffic and provide an alternative to City residential streets as a means of access between Hydraulic Road and Greenbrier Drive (collectively the “transportation improvements”); and,

WHEREAS, Meadowbrook Creek, LLC has constructed the first segment of Hillsdale Drive Extended and related public improvements with a portion of the funding provided pursuant to an agreement with the Charlottesville Economic Development Authority; and,

WHEREAS, the right-of-way and related improvements constructed by Meadowbrook Creek are within the area, consisting of approximately 1.487 acres, shown on the attached Plat, last revised August 26, 2009, as “Hillsdale Drive Variable Width R/W Dedicated to the City of Charlottesville for Public Use”; and,

WHEREAS, Kmart Corporation has asserted a leasehold interest over all or a portion of the 1.487 acres shown on the attached Plat, where Hillsdale Drive Extended and the related improvements have been constructed; and,

WHEREAS, in order for Hillsdale Drive Extended and the related improvements along Hydraulic Road to be dedicated to and accepted by the City of Charlottesville as part of the City public street and right-of-way system, it is necessary for the City to acquire that portion of Kmart Corporation’s leasehold interest that is within the 1.487 acres improved by Meadowbrook Creek; and,

WHEREAS, the City has made a bona fide offer to Kmart Corporation of the appraised fair market value of the portion of the leasehold interest that is needed for the dedication and acceptance of Hillsdale Drive Extended and related public improvements, which offer has not been accepted.

NOW, THEREFORE, BE IT RESOLVED by the Council for the City of Charlottesville, Virginia that the proposed public use of the approximately 1.487 acres shown on the attached plat as a public street is hereby approved, and the City Council hereby states that the right, title and interest, including that portion of the leasehold interest held by Kmart Corporation, acquired pursuant to this Resolution shall be used as a public street and related public improvements to be owned and maintained by the City of Charlottesville.

BE IT FURTHER RESOLVED that the City Council hereby finds that the acquisition of the property as shown on the attached plat is necessary for the purpose of establishing a new public street and making related street improvements to Hydraulic Road, and to provide for the transportation improvements described herein, and the City Council hereby directs that the right, title and interest to the property, including the leasehold interest held by Kmart Corporation, as shown on the attached plat be acquired through the filing of condemnation proceedings. Nothing herein shall be construed as prohibiting the voluntary acquisition of the necessary property interest(s) through further negotiations with the landowner.

   Blair Hawkins | Charlottesville, Virginia | healingcharlottesville@yahoo.com | Résumé | Top