Virginia Beach losing millions to protect Oceana

Posted at 6:48 PM, May 14, 2012
and last updated 2012-05-14 19:39:47-04

VIRGINIA BEACH – The city and state have spent seven years and several million dollars moving families out of Oceana’s crash zones by buying and bulldozing their homes. But records provided under a Freedom of Information Act request shows dozens of cases where the city sells those empty lots back to developers who then build larger homes on the same parcels.

And in each transaction, the city and state lose tens of thousands of dollars. In one transaction, the government lost more than a million dollars.

The city provided to NewsChannel 3 more than 40 real-estate records showing residential property the city bought, and then later resold. The money to buy these properties from willing sellers is split evenly from city and state budgets. In most cases, the city bulldozes the homes and allows neighbors to buy the parcels for expanded yards at cut-rate prices.

However in several cases, the city combined some of the lots into bigger parcels and sold them to home builders at huge losses.

  • The city bought three homes on Indiana Ave. for  $479,290. The city combined the three lots into one, removed the option to build duplexes and sold the triple-sized lot to a developer for $62,500. The house now on the site is listed for $269,900.
  • A block away on Roselynn Lane, the city bought and bulldozed two homes for  $426,000. The city combined the two lots into one, removed the duplex zoning, and sold the lot to a home-builder for $62,500. The house there is listed for $279,900.
  • The city bought and bulldozed nine homes on six different streets and demolished them all for $1.6 million. The city turned the nine lots into eight lots and sold them in a single transaction to a developer for $320,000. In this deal, reducing the number of houses by one cost taxpayers $1.3 million.

The city council approves every sale.

Mayor Will Sessoms says the goal of the program is to reduce “potential development” around the base. Many of the lots around Oceana are zoned for duplexes, even though they are occupied by single homes. Sessoms says when the city buys a lot and downzones the property, that limits future development.

“What we are doing with encroachments around Oceana is an example of how it should be done,” said the city’s mayor. “This isn’t Will Sessoms the mayor of Virginia Beach saying that, this is the Navy saying that, so I am very proud of what we have accomplished there.”

However in many cases, the city’s plan does nothing to reduce the actual number of families living in the crash zones. At least eight times the city bought houses, but did not demolish them. Instead, the city simply removed the duplex option and re-sold the properties at staggering losses. For example, the city bought a house at 205 N. Oceana Blvd. for $275,000, removed the duplex zoning, and then sold it for $75,000.

Even though the city and state have aggressively thinned development near the air base, there are brand-new houses in Oceana’s crash zone ready for new families, all built on lots that were once cleared by the city. Records show the city has spent more than $10 million for residential properties that it later resold, mostly to developers, for $1.6 million.

“We must acknowledge that we live around an air base,” Sessoms said. “We’ve done a wonderful job in recent years doing everything we can to reduce the risk. Are we ever going to do away with the risk? The answer is no."

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