10.5 acres sold to pad Pasquotank's lean coffers

Pasquotank County has accepted $6.7 million for Outer Banks land worth nearly $10 million during the real estate boom.

The money could stop a big withdrawal from reserve funds in a tough budget year.

Last week, Pasquotank County commissioners agreed to sell 10.5 acres near milepost 10.5 on Croatan Highway for $6.7 million to Nags Head Partners LLC, a group headed by Manteo developer R.V. Owens III.

Closing is set for Jan. 20.

Owens plans to build a commercial site on the Nags Head property, including a Food Lion, a bank, a credit union and retail shops.

Pasquotank County accepted a bid of $7.25 million in March, but the group could not borrow that amount. Last week, the county accepted its lower bid of $6.7 million for the property.

"He was the only bidder at the time," said Pasquotank County Commissioner Marshall Stevenson. "We felt we needed to take it."

Stevenson had opposed the sale in earlier votes, hoping to get a better price later. Commissioner Lloyd Griffin was the only commissioner to oppose the sale in last week's vote.

"We didn't feel the economy would recover for some time," Stevenson said.

Pasquotank County and Albemarle Health, which operates Albemarle Hospital, will split the $6.7 million, said County Manager Randy Keaton. Much of Pasquotank County's portion could prevent the county from drawing on reserve money to support the general budget.

The county planned to supplement this year's budget with $700,000 from a reserve fund in the water department and $320,000 reserved from land sales in Commerce Park, Kea-ton said. If commissioners agree, beach land sale money could keep the county from drawing from reserves or raising taxes by 2 cents or more, Stevenson said.

Pasquotank County bought the property in 1984 for about $1 million with plans to build an Outer Banks health care facility as part of Albemarle Hospital in Elizabeth City.

"We bought it for $1 million and sold it for $6.7 million, so we made a decent profit," Stevenson said.

In 1998, a partnership between the operators of Pitt County Memorial Hospital and Chesapeake General Hospital was selected over Albemarle Hospital and Sentara in a bid to build a hospital on the Outer Banks.

The property was put up for sale. Early on, Pasquotank commissioners expected the property to go for as much as $10 million, but offers were scarce.

Ocean Beach Club LLC bid $9.45 million for the property in 2005. The Virginia Beach-based company wanted to build a hotel, restaurant and timeshare property but terminated its sales agreement in July because of development restrictions in Nags Head.

Jeff Hampton, (252) 338-0159, jeff.hampton@pilotonline.com