York County, former museum foundation reach settlement

04/03/2014 10:40 PM

04/04/2014 10:43 AM

York County intends to drop its lawsuit against the Culture and Heritage Foundation in exchange for access to “all net proceeds” from the sale of nearly 274 acres of donated land and a “forensic audit” report of the foundation’s assets.

The terms are outlined in a settlement document obtained by The Herald and approved unanimously by the York County Council on Thursday night.

The Herald obtained a copy of the agreement from Bill Easley, chairman of the Culture and Heritage Foundation. The settlement is expected to be filed in court on Friday.

Given the County Council’s approval of the deal, Easley said that he and the foundation felt free to inform the public and their donors of the settlement after The Herald asked for the document.

The agreement does not contain specific figures but states that the money from sale of the land in Fort Mill will be transferred to the Foundation For The Carolinas (FFTC). The donated land is expected to be sold for $10 million.

York County will appoint four people to a “donor-advised board” and the Culture and Heritage Foundation will appoint three people to the board to make decisions on how to spend the land’s proceeds, held by the FFTC.

The settlement also calls for the foundation to transfer to the FFTC the “remaining balance” in all its accounts, including any money held by the Sustainable Development Group – the real estate development arm of the Culture and Heritage Foundation.

In the settlement, the foundation agrees to turn over its financial records to a “third party” accountant who will perform a “forensic audit.” Foundation and county officials are expected to choose an accountant in about a month.

After picking an accountant, the audit will be finished within three months.

In the settlement, York County has agreed to state in writing – “if consistent with the conclusions of the auditor” – that the audit results “show no evidence of malfeasance.”

The foundation also has agreed to give York County’s museum commission the deed for 60 acres to be used for a future museum.

After the council’s vote, Council Chairman Britt Blackwell read a prepared statement that said the settlement agreement was not yet “finalized” and that settlement terms were “confidential.”

In refusing to disclose the settlement terms, York County Attorney Michael Kendree has cited South Carolina legal rules that govern mediation and settlement agreements. Disclosure before filing with the court, he has said, would be inappropriate.

The County Council’s acceptance of the settlement on Thursday aligns with the decision made by the county’s museum commission on Monday to accept the deal and end the lawsuit. This week’s settlement talks and two votes come after an all-day court-ordered mediation session last week involving county and foundation representatives.

The lawsuit has been ongoing for nine months. York County has spent more than $140,000 in the legal battle.

The county’s lawsuit against the foundation began last summer, when council members voted to sue after years of sparring over money and a 1998 donation of 400 acres – 274 of which are involved in the settlement. The land, located near the intersection of Sutton Road and Interstate 77, was a gift from Jane Spratt McColl.

In its lawsuit, York County asserted the land belonged to the county and its museum system – not the foundation. County officials also sought a financial accounting of the foundation’s assets and spending over recent years.

The foundation was established to raise money for and benefit York County’s museums. In 2011, the County Council voted to terminate an operating agreement with the foundation which prompted foundation officials to change the organization’s official purpose statement.

In 2011, there was “venom on both sides,” said Councilman Bump Roddey after Thursday’s settlement vote.

Previous attempts to settle disputes before York County decided to sue drew negotiations and compromise similar to the terms approved Thursday, Roddey said.

“Two years ago, we were closer to this point than we realized,” Roddey said, adding that as time passed and both sides spent money on the lawsuit, people seemed to have “cooler heads.”

He called this week’s settlement “an agreement fair for both sides.”

With the lawsuit ending, Roddey said he hopes York County’s museum can rebuild its reputation and retain its donors.

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