B&K 3p
(July 3, 2013, B&K Law firm to Anthony OConnell andSheila OConnell)
Property in the Lee District, Fairfax County
TM 90-4 ((1 )) 17
Dear Ms. Shevenell and Mr. O'Connell:
This finn is representing your sister Jean O'Connell Nader in her capacity as Successor
Trustee under the Land Trust Agreement dated October 16, 1992. Jean has asked us to bring you
up to date on the actions she has taken with regard to the approximately 15 acre trust property
("Property") identified above since she was appointed Successor Trustee on January 25, 2013.
It was apparent to Jean when she became Successor Trustee that the Property had to be
sold. The delinquent real estate taxes, which had been accruing interest and penalties, were
approaching a total of $30,000, and Fairfax County had turned the matter over to a collection
agency. Jean was advised that if the taxes were not brought current, there would eventually be a
tax sale which, given the Property's R-l zoning and the fact a large portion of the Property is in
the Resource Protection Area ("RPA"), would in all probability yield only a fraction of the
Property's true value.
Jean's first step was to have the Property appraised. She retained a highly regarded local
appraiser to prepare a Restricted AppraisaL Because it is difficult at this point to predict
accurately the density at which the Property may be approved for development, at our instruction
the appraiser provided a value range per townhouse lot. In detennining this range, he assumed
that the Property could be developed with approximately 30 to 39 townhouse units.
Fairfax,Virginia www'BKLAWVA.COM Manassas,Virginia
While Tony was Trustee he had been in negotiation with Bill Lynch and Andy
Somerville for the sale of the Property. A contract was never signed, but Bill and Andy
apparently did quite a bit ofwork in exploring how the Property could be developed. Knowing
that Bill and Andy remained interested in the Property, we on Jean's behalf asked them to submit
a non-binding letter of intent which set out the basic terms and conditions under which they
would be willing to purchase the Property. They did so, but Jean concluded that the price
offered was not acceptable. She responded with a counteroffer which was eventually accepted.
A letter of intent was executed on May 24, 2013, and we immediately set out negotiating a
binding Real Estate Sales Contract ("Contract") based upon the letter of intent. By June 20,
2013, there was a fully executed Contract between Jean as Successor Trustee and Long Branch
Partners, L.L.C. ("Purchaser"), a limited liability company owned and controlled by Bill and
Andy.
The pertinent provisions of the Contract are as follows:
• There is a 90 day Feasibility Period during which Purchaser will determine
whether to proceed under the Contract or to terminate it.
• In the event Purchaser does not terminate the Contract, within ten (10) days of
the close ofthe Feasibility Period, Purchaser shall pay off the delinquent real
estate taxes, and it shall continue to pay the real estate taxes on the Property as
they become due until Settlement or until termination ofthe Contract.
• The repayment of the real estate taxes to Purchaser will be reflected in a nonrecourse
promissory note which Jean will execute as Successor Trustee and
which will be secured by a Deed of Trust against the Property. At Settlement
there will be credited against the purchase price all the real estate taxes which
Purchaser has paid.
• Purchaser will be responsible, at its own expense, for rezoning the Property
and getting its subdivision approved. (The rezoning will be heard by the
Board of Supervisors in a decidedly political context; the subdivision process
is administrative.) Purchaser's obligation to purchase the Property is
contingent upon its getting approval of at least 30 townhouse lots.
• The purchase price will be determined by the number ofapproved townhouse
lots, the per lot price of $57,500 being the top of the value range established
by the appraiser.
It is anticipated, and the Contract provides, that Settlement will take place in late 2015 or
even early 2016, assuming the contingency is met. While it is unfortunate that Settlement cannot
take place sooner, getting the highest value for the Property necessarily requires having it
rezoned and having its subdivision approved. As noted above, Purchaser will undertake this
effort at its own expense, and that expense will be considerable. Also, while the entitlement
process is moving forward, Purchaser will be paying the real estate taxes on the Property.
Jean is delighted that Purchaser is committed to paying a good price for the Property, as
determined by the appraisal. In addition, because no broker was involved in the transaction, the
Trust will be spared paying a hefty commission out ofthe settlement proceeds.
Bill and Andy appear to be quite excited to have the Property under Contract. They are
experienced developers in Fairfax County and give every indication that they will aggressively
pursue the rezoning of the Property and subdivision approval. At this point there is reason for
cautious optimism that Settlement will eventually take place under the terms and conditions of
the Contract. Please be aware, however, that Settlement is far from certain and that you should
not assume that the contingency will be fulfilled and the Property sold to Purchaser.
We will keep you up to date on Purchaser's progress.
Best regards to you both.
Yours truly,
Sarah E. Hall
SEH/sp
cc: Jean Nader
Elizabeth V. C. Morrogh, Esquire
|
