Thursday, March 2, 2017

Gloucester County, Va. Real Estate Tax Assessment Corruption??

Gloucester, VA - Picture taken for the new Gloucester Links & News website.

You Decide

If this story does not cause you to question the integrity of the Board of Supervisors and real estate tax assessments in Gloucester County, Virginia, nothing will.

On October 4, 2016 the Gloucester County Board of Supervisors (BOS) approved a land swap deal between Gloucester’s Department of Public Utilities (Utilities) and Gloucester resident Charles Kerns, Jr. When the land swap proposal was first presented to the BOS, then Chairman John Meyer asked, “Is the concept of swapping properties the way the County wants to do business?” He then said, “Sounds like it has the potential for a win win.” As it turns out, Supervisor Meyer had a stake in the land swap deal; in that the entrance to his personal estate shares a property line with the piece of land Mr. Kerns traded to Utilities. Supervisor Meyer’s personal involvement is further exemplified by Mr. Kerns’ written assertion that he also offered to sell his property to adjacent landowners. There is also significant evidence strongly suggesting there was local government corruption involving real estate tax assessments in the land swap deal. Let’s explore who actually won in the deal.

The story as I know it started to form while I was serving on the Gloucester Public Utilities Advisory Committee (PUAC). During a Committee meeting in late 2015, the Director of Utilities spoke briefly about a possible land swap deal between Utilities and Mr. Kerns. During the same meeting the Director also spoke about failing septic systems in the Terrapin Cove Sewer Extension project (Project) area. (This Project was frozen by the BOS in 2014 due to a lack of funding and the unwillingness of property owners to commit to connecting to the system.) During that PUAC meeting the Director also spoke about Utilities’ efforts in attempting to obtain grant funding to finance the extension of public sewer down just one street in the Project area. That street was Laurel Drive and is the same street where one of Utilities’ properties involved in the land swap is located. A few months later the Director informed the committee the grant funding was unobtainable in the current fiscal year, but Utilities intended to apply during the next fiscal year. In the back of my mind I wondered if there was a connection between Utilities efforts to install new sewer service just on Laurel Drive and the land swap that he spoke of. After watching the story unfold I absolutely believe there was a connection. If public sewer were available at the Terrapin Cove lot, the owner would have been able to build a duplex or similar type of rental unit on the property instead of just a single family dwelling. In this article I will focus primarily on the assessment values of the properties contained in the land swap deal.  

The land swap proposal next came to my attention in late July 2016 when it appeared on the County’s website as an agenda item for the August 2, 2016 BOS meeting. Utilities was requesting the BOS to approve advertising a Public Hearing on the land swap deal. I found this troubling because the PUAC had not been provided with any information pertaining to the deal and had not been given the opportunity to vet it before the Director presented it to the BOS. Upon researching the locations, values and such pertaining to the properties contained in the deal; I found some highly questionable anomalies in the County’s real estate tax assessment values. The following information obtained from Gloucester County’s online real estate tax database; clearly demonstrates the anomalies I am talking about.
Assessment Comparison
RPC                Street                             Acres      2015 Assess         2010 Assess     

*14627          Belroi Rd                         1.62         $41,780               $25,000*

16706    Terrapin Cv./Laurel Dr           .32           $24,290                $45,000

10095        Booker St                            .3             $9,920                  $49,700

*/Red = Kerns property
Black = Utilities property

As you see; the County assessed values of the two Utilities properties decreased dramatically during the 2015 assessment cycle. It is also clearly evident the County’s assessed value of Mr. Kerns’ property dramatically increased during the same assessment cycle. For some strange reason, all of the dramatic shifts in property values substantially benefited Mr. Kerns.
Another anomaly I discovered was the difference in assessment values between the Terrapin Cove property and a cleared vacant property on Laurel Drive that shares a property line with the Terrapin Cove property. The following information obtained from Gloucester’s online property database reflects the differences:

Terrapin Cove and Laurel Drive Property Value Comparison
RPC                Street                       Acres          2010               2015              2017               

16706        Terrapin Cove                .32           $45,000          $24,290         $43,720

19606           Laurel Dr.                   .297          $45,000          $46,810         $46,810

As you can see; the assessment values were consistent in 2010, but in 2015 the larger Terrapin Cove property mysteriously lost value long enough for Utilities and Mr. Kerns to make the land swap deal. And look at that; after the land swap deal was completed, the Terrapin Cove property increased in value during the 2017 assessment cycle, but more on that later because those values were an unknown at the time.

When I discovered the questionable changes in the 2015 assessment values I shared them with York District Supervisor Phillip Bazzani. He in turn created a PowerPoint presentation representing my concerns that he shared with me and said he shared with the rest of the BOS and members of County staff. The PowerPoint presentation was never shown to the public. Utilities presented the land swap deal to the BOS on August 2, 2016 and the BOS sent it back to the PUAC for vetting. The BOS also instructed the County Administrator to obtain independent appraisals on all of the properties contained in the proposal.

During that same BOS meeting the County Administrator publicly said, the County Assessor said, that among other complex things (that he did not elaborate on), assessing the value of non-taxable property was not on the list of priorities to be accomplished during the 2015 assessment cycle; therefore little time was spent insuring the accuracy of those values because they are nontaxable properties. My question is; why did the values of only those two Utilities owned properties dramatically decrease when the values of the other two buildable Utilities’ properties contained in the deal experienced unusual increases in value? More about the third, unbuildable property later. Also; what caused Mr. Kerns property to increase in value so much?

The following information obtained from Gloucester’s online real estate tax database demonstrates the 2010 through 2017 assessed values of the other Utilities owned properties that found their way into the proposal Utilities presented to the BOS.

Assessment Comparison of Utilities’ Properties Contained in the Land Swap Proposal
RPC                 2010 Asses       2015 Assess       2017 Assess

28607                 $50,000              $59,970             $47,660

12656                 $35,000              $46,940             $36,100

19691                 $4,700                $4,060               $1,800

Bunting's Appraisal Service, which has a lengthy history of providing real estate services to Gloucester’s local government, was hired by Utilities to provide the independent appraisals. The following demonstrates the difference between those appraisals and the County’s assessment values of the swapped properties from 2010 thru 2017.

County Assessments vs. Independent Appraisal
RPC          Street           2010 Assess    2015 Assess      Ind Apraisal        2017 Assess           

16706    Terrapin Cv.      $45,000             $24,290             $30,000             $43, 720

10095     Booker St         $49,700             $9,920                $5,000               $26,460

*14627   Belroi Rd          $25,000             $41,780             $45,000             $41,780

*/Red = Kerns property
Black= Utilities property

As you can see; the 2016 independent appraisal values also strongly favored Mr. Kerns in comparison to the 2010 assessments and the 2017 assessments that were released only a few days after the deal was completed.

The PUAC met on two occasions to discuss the land swap deal. (Keep in mind we did not know the 2017 values) The independent appraisals had not been received by the first time we met so the discussion was tabled until they were available for review. During the brief second PUAC discussion, a vote was taken by the committee members and resulted in a split decision to recommend the BOS approve the deal. The vote was 4 to approve, 2 to disapprove and 1 member abstained from voting. I voted against the land swap deal for multiple reasons like; there was no data supported business case presented to justify acquiring the property, but the most profound reason I voted the way I did was because I clearly saw the whole deal as being government corruption. In fact, during the last PUAC discussion, one of my fellow committee members said I was just upset about the assessments and can’t let it go. He was right and I say he is part of the corruption for letting it go. Meeting Minutes from the Land swap deal Public Hearing reflect Utilities’ director insinuating I voted the way I did because I felt the Utilities property values were to low. Funny how there was no mention of me disagreeing with giving away highly marketable real estate based on his unsupported speculations. 

The BOS unanimously approved the land swap deal after a Public Hearing; during which the County Administrator said the assessment anomalies were the result of a glitch in the new assessment software and that the County assessor had notified the state about the glitch. I don’t buy it at all. But that is not where the land swap deal story ends. On February 17th the Gloucester Mathews Gazette Journal listed the Terrapin Cove Road property as being sold by Mr. Kerns for $55,000. According to the Gazette Journal and online property records; Mr. Kerns sold the property to the property owner who has lived right next door to the property since 1998. In other words; the two properties share a property line. I wonder if the new owner knows the whole story behind how Mr. Kerns obtained possession of the property and how the assessment values have been manipulated. Something tells me the new owner would have preferred to buy the property for the $30,000 independent appraisal value. He would have saved $25,000.

After finding out Mr. Kerns’ property had been sold; I checked the 2017 County assessment that was released to the public only a few weeks after the BOS approved the land swap deal. I could not believe my eyes. The following demonstrates the County’s assessment values of the swapped properties from 2010 thru 2017 and the 2016 independent appraisal values:

2010 thru 2017 Assessments and 2016 Independent Appraisal
RPC          Street           2010 Assess      2015 Assess    Ind Apraisal         2017 Assess           

16706    Terrapin Cv.      $45,000             $24,290             $30,000             $43, 720

10095     Booker St         $49,700             $9,920                $5,000               $26,460

*14627   Belroi Rd          $25,000             $41,780             $45,000             $41,780

*/Red = Kerns property
Black= Utilities property

When the BOS approved the land swap deal, their decision was based on the 2016 independent appraisal values. The combined value of Utilities two properties at that time was $35,000 and Mr. Kerns’ property was valued at $45,000. The combined assessment values of Utilities former properties is now $70,180 and the value of Mr. Kerns former property is now valued at $41,780. At the time the deal was approved, Mr. Kerns’ property was determined to be worth $10,000 more than the property he received from Utilities. Within days of the deal being made, the property Mr. Kerns received from Utilities became worth $28,400 more than the property he unloaded on Utilities.

So why did Mr. Kerns decide to sell or trade his property instead of building rental units on it? I guess it could have been for any number of reasons, but I have a theory that is probably not to far off target. Like I said earlier; the entrance to Supervisor Meyer’s personal estate shares a property line with the piece of land Mr. Kerns unloaded on Utilities. I believe having renters living at the entrance to his home did not sit well with Supervisor Meyer, but he opted not to pay $50,000 for the property. From there the land swap plan was hatched. I believe somewhere along the way someone with full access to the County’s real estate tax assessment database manipulated the property values of the three properties exchanged in the deal.

The land swap deal is just another example of the corruption that takes place within Gloucester County’s local government. Should there be a forensic audit performed on everything pertaining to real estate tax assessments in Gloucester County? Let us know what you think by emailing us at or by posting remarks on the Facebook post that led you here.

Kenny Hogge, Sr.
Gloucester Point
Retired United States Army

Helping to Drain the Swamp

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