[It should be noted that the following Arlington Journal article entitled "Land Deal Fallout Bitter" is copyrighted. The contents may not be reproduced without permission of the publisher, The Arlington Journal, 2720 Prosperity Avenue, Fairfax, Virginia 22034-1000. The Civic Association received permission to publish this article in the Ballston-Virginia Square Civic Association Newsletter.]
Groundbreaking has taken place on one of Arlington's most hotly contested pieces of property, and local groups are still abuzz about the transactions that led to the purchase of Ballston's last piece of undeveloped land.
County officials appear unscathed by accusations of mismanagement, unethical property shuffling and abuse of power, explaining - to anyone who will listen - that all county actions surrounding the Stuart Park property in the heart of Ballston were above board.
The furor began when a taxpayer group, the Arlington County Taxpayers Association, called the deal "charity for the rich" in its newsletter.
Since then, almost all the local media have covered the issue. Other civic groups and organizations questioned the transaction. Volunteers for an Independent Arlington chastised the county and the Ballston-Virginia Square Civic Association devoted pages of space to the issue in its newsletter.
The issue started in 1987 when the real estate market was booming, the population was on the rise and the county was approving site plans for buildings at record rates. County officials decided Wilson Boulevard would soon grow too congested and needed to be widened from two westbound lanes to three.
To do that, the county would have to buy about 50 feet of property on the north side of Wilson, between Taylor and Stuart streets. And if property owners wouldn't sell, officials said, the county could and would use its power of eminent domain to take the property.
According to Arlington County Manager Anton S. Gardner, two of the three property owners on the block agreed to sell. The holdout: Andrew Kolaitis. Kolaitis paid $200,000 for 5,000 square feet of land in 1973--before Ballston was Ballston--and operated a mattress store there. He claims the county only wanted the road widened by a half-lane, and he offered the property in front of the store to the county for free.
But Gardner insists the county needed a full lane and piece of land that would stretch 30 feet into Kolaitis' building. After months of negotiating, Gardner said, the county had no other option but to condemn the property.
Immediately before the county's decision to condemn, Kolaitis was called into the office of then-Director of Public Works Hank Hulme. Kolaitis claims Hulme told him the Washington- based Oliver Carr Co. wanted to buy the entire block and Kolaitis was "in his way."
Kolaitis, however, refused to sell to the Carr Co., who would then, according to county officials, donate the road-widening property to the county, saving the county millions.
Carr Co. already owned the entire northern portion of the block. Hulme, now working for the engineering firm Dewberry and Davis, said he may have advised Kolaitis it would be in his best interest to sell his property to Carr, but he never told Kolaitis he had to.
On July 28, 1987, the county board approved condemnation of the Kolaitis property, but before any action could be taken, Kolaitis reluctantly sold his 5,000 square feet--and the building--to the county for $3.01 million.
Four months ago, the county sold the property to Fidelio/Buvermo Properties for $365,000. The apparently huge loss was what drew criticism from watchdog organizations and was the subject of several news reports.
Timothy Wise, president of the taxpayers association, insists there was mismanagement afoot. "The county should not be in a position where it is aiding and abetting a private developer," he said. "But here's a question that still remains unanswered: Why did the county sell the remaining portion of the Kolaitis property at such a low price? That question still needs to be answered. They sold that property at 10 cents on the dollar."
County officials defend the transactions, saying the Crestar Bank property next door sold for a "comparable price."
Shortly before the county paid Kolaitis his $3 million, something apparently unrelated happened.
O'Reilly said Carr eventually bought most of Kolaitis' property from the county, but sold it after the building recession in the early '90s.
Karen Widmayer, communications director for the Carr Co., said the company had intentions of developing the entire block but later backed out, selling Stuart Park to Fidelio/Buvermo Properties.
After all the criticism, county officials are anxious to explain their side of the story. "We want to clear this up," Gardner said. "To put an end to it." That might not be possible.
Kolaitis insists he was forced to sell his property and the county only told him they wanted to widen the road by a half-lane, allowing him to keep his building. Kolaitis has since gotten out of the real estate business. He is now an employee for a neighboring jurisdiction.
"I'm soured on Arlington and on real estate," he said. "This whole fiasco has left me very bitter. I don't believe or trust anyone in [Arlington] County anymore."