Ex-owner of wetlands site sues, may delay conservation plan

VIRGINIA BEACH

The plan to preserve a major undeveloped tract of waterfront property in northern Virginia Beach has hit an obstacle.

Wayne McLeskey Jr., who once owned the 122 acres of wetlands, sandy beaches and forest near the Chesapeake Bay, has asked a judge to temporarily halt the sale of the land for environmental preservation.

The suit, filed in Virginia Beach Circuit Court in late August, has the potential to delay the deal between environmental groups, the city and Wells Fargo bank, or even increase its $13 million price tag.

The issue:

According to McLeskey, developer L.M. Sandler & Sons promised to realign and pave a road for him and provide a stormwater outfall for another of his properties as part of the agreement for the property. The work was supposed to be done as part of Sandler's plans to develop the land into a 1,000-home complex called Indigo Dunes.

The road and utility work were on top of the nearly $30 million that Sandler paid McLeskey for the land in 2007. Sandler, which is financially stressed and has lost control of the property to the bank, is unlikely to fulfill its promise, said Carl Isbrandtsen, an attorney for McLeskey.

The new owners, a partnership that would include the city, should, Isbrandtsen said.

"My client wants what he bargained for," Isbrandtsen said.

The Trust for Public Land, which is leading the partnership in the purchase of the property for conservation, is aware of the lawsuit, said Kent Whitehead, the Chesapeake project director for the organization.

"It may cause a slight delay, but we remain confident that the conservation of this property will eventually come to fruition," Whitehead said in an e-mail.

The preservation plan calls for Virginia Beach, the trust and the Chesapeake Bay Foundation to all help with the purchase of the land. Virginia Beach would contribute $5 million; the Chesapeake Bay Foundation would put in $1 million; and the city and trust have applied for a $3 million federal grant. The Trust for Public Land is also willing to sell a portion of the land for commercial use.

The deal was to be finalized with Wells Fargo by the end of the year.

W ells Fargo still wants to sell the land for conservation, but the timeline is uncertain, said Kristy Marshall, a spokeswoman for the bank.

City Attorney Mark Stiles said he was not aware of McLeskey's arrangement with Sandler until he saw the lawsuit this week.

"It's certainly something we're concerned about," Stiles said. "We have not fully evaluated the suit."

McLeskey, who at one point considered buying the property back from Sandler, is no longer interested in acquiring it, Isbrandtsen said.

The lawsuit is an attempt to get Sandler, the bank, the city and the trust to come to a resolution about McLeskey's road and outfall pipe, Isbrandtsen said. "This allows everybody to take a deep breath," he said. "Everybody ought to be able to sit down and agree to this."

Deirdre Fernandes, (757) 222-5121, deirdre.fernandes@pilotonline.com