York Co., foundation return to negotiating table

03/08/2014 9:14 PM

03/09/2014 8:50 AM

York County and Culture and Heritage Foundation officials will try within the next few weeks to settle an ongoing lawsuit over nearly 300 acres of land along the Catawba River that is set to be sold for $10 million.

Two sources said some York County Council members could ask for up to $10 million to settle the lawsuit, which the county filed against the foundation last year. But other council members are seeking more than $10 million, other sources said.

Those sources spoke on the condition of anonymity, saying that the ongoing legal fight prevented them from commenting publicly.

York County Council voted in June 2013 to sue the foundation, which for years exclusively supported York County museums. The foundation changed its mission in 2012 to support other causes across South Carolina. Foundation officials said they changed the mission after the county council severed formal ties with the group.

County council members have said they sued to ensure that all donations made to the foundation before the mission change are dedicated to York County museums. The lawsuit so far has cost taxpayers $140,000.

Neither the foundation nor the County Council would comment on what offers may be made during upcoming settlement talks, citing a willingness to move forward with all options on the table. Attorneys for both sides –– Jim Sheedy for the foundation and Brian Autry for York County –– said no specific dollar amounts or other settlement information have been discussed between the county and the foundation.

The sources said that besides money, the county council may also continue to push for the foundation to provide an accounting of its donations and spending –– a key part of the county’s lawsuit. But, Sheedy said, he’s been told that mediation will move forward without an accounting and that it will not be a term of settlement.

A meditation or attempt to settle disputes before trial is a routine step during most civil cases. The mediation meeting for this case could happen by the end of March.

The settlement talks will follow the foundation’s failed attempts to avoid turning over some of its financial records during the lawsuit’s discovery phase. York County Master-in-Equity Jack Kimball ordered the foundation to turn over the records, but the foundation appealed. The state Court of Appeals ruled against the foundation.

Now, the county intends to focus its efforts on settlement talks, not the discovery order, Autry said.

While the appeal was pending at the state level, foundation officials announced they will sell the disputed land to Crescent Communities of Charlotte for housing and commercial properties.

The land will be sold for $10 million, according to a letter sent from Foundation Chairman Bill Easley to York County Council Chairman Britt Blackwell. Crescent confirmed the sale price.

Easley declined to discuss the sale price with The Herald, citing a confidentiality agreement with Crescent.

Foundation offered money from land sale

The 274 acres –– located in Fort Mill, near Sutton Road and Interstate 77 –– is the remaining portion of an original 400-acre gift from Jane Spratt McColl and her family.

Leading up to the June 2013 lawsuit, county and foundation officials squabbled over who had rights to the land donation. Some of the land has been sold for a future school and potentially a Carolinas Medical Center hospital. Proceeds from those sales were used to pay off debt from a previous development deal that failed.

About 60 acres of the land has been set aside for a future York County public museum.

In a settlement proposal made to the county before it filed suit last year, the foundation offered to put money from any future sale of the land into an account managed by a third-party nonprofit group.

Foundation officials provided The Herald with the settlement offer they made in June during failed negotiations with York County last summer. York County has refused to release the final offer it made to the foundation before filing the lawsuit. In denying The Herald’s request for the document, the county has cited attorney-client privilege.

The foundation’s settlement offer included putting money from the land sale in the hands of the Foundation For The Carolinas, or FFTC. With some foundation and county officials in “an advisory capacity,” the FFTC would have managed the money and distributed it for the benefit of York County’s museums.

After the land sale, foundation officials would have settled for taking some money for closing costs and some money for “their future operational needs and obligations,” according to the settlement proposal.

Other offers in the foundation’s settlement proposal included:

• Ensuring that all gifts to the foundation before May 2012 would be used exclusively to benefit the county’s museums
• The foundation changing its name to avoid confusion with the county’s Cultural and Heritage Commission
• Providing the county with a consultant’s work – with the consultant’s permission – pertaining to the future museum site, including drawings and archaeological studies

The Herald last week asked York County Attorney Michael Kendree, for a second time, to provide the county’s 2013 settlement proposal under the Freedom of Information Act. He said he would take the request to the County Council for consideration. Council Chairman Blackwell said he’d keep “an open mind” about the request but would ultimately follow Kendree’s advice on whether to provide the settlement proposal.

‘Financial accountability’ still a concern

York County has spent about $140,000 in its legal fight against the foundation, according to information provided by Kendree.

Now, with settlement talks in sight, the County Council could vote to drop the lawsuit and drop the push for the foundation to “open its books,” says one councilman.

“If the settlement offer is right, that will definitely get the attention of four votes on the council to put this court case behind us,” said Councilman Bump Roddey, declining to say what he thought a fair settlement figure would be.

Blackwell declined to comment on specifics of a possible settlement or the council’s next action but said his “overriding concern has always been financial accountability.” He thinks the council did “everything we could to not go in that direction (of a lawsuit last year).”

York County, Blackwell said, will remain “flexible” and be “fair and open-minded” during settlement negotiations.

Crescent’s desire to buy the foundation’s land could help the dispute “end on a really high note,” said Jane Peeples, chair of the board for the Sustainable Development Group, a subsidiary of the foundation.

Crescent has been “more than willing to meet very high standards we’ve set concerning conservation, environment and archeology,” she said. And, the money from the sale would be “significant funds for the benefit of York County citizens.”

She and Easley said that they do not know why York County rejected their settlement offer last year. Their June 2013 proposal came after a meeting with some foundation officials and county representatives.

Bringing in the Foundations For The Carolinas seemed to be a way to aid settlement talks before the lawsuit was filed, Peeples said. Representatives from the FFTC met with the County Council last June for several hours behind closed doors during an executive session.

While the FFTC may still be willing to help manage the proceeds from the land sale, Peeples said, her group has not revisited that option since York County filed suit.

Mediation is expected to take place over one day. If the county and foundation cannot reach a settlement, they may choose to extend mediation or the mediator could declare an impasse and the case would move to trial.

Ahead of a trial, it’s expected that the foundation would comply with Master-in-Equity Jack Kimball’s October 2013 order to provide the county’s attorney with certain foundation-related financial documents through “discovery.” The documents sought include all communication with donors; documents related to current and previous real estate deals; records provided to state and federal tax authorities; and, all communication between foundation officials.

In appealing Kimball’s orders to the state court, Sheedy argued that the foundation should not have to provide the documents until York County has “proven a right to an accounting.”

Before the County Council terminated its partnership agreement with the foundation in 2011, York County officials had a right to review the foundation’s financial records, Peeples told The Herald on Friday. The agreement called for the foundation to give regular financial updates to county officials.

Even after the county severed ties with the foundation, Easley says he and others agreed to allow an audit but county officials dropped the issue after the S.C. Secretary of State initiated a comprehensive review of the organization’s finances. Since then, the foundation has been the subject of audits by the South Carolina Attorney General’s office and the Internal Revenue Service.

All three agencies completed reviews of the foundation’s records and did not cite any violations.

Through those audits and a recession, Peeples said, the foundation has been “really struggling to keep this property and do the right thing with it through a very, very difficult time."

"We have no interest in continuing this war of words,” she said. “We're very much focused on the future.”

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