Judge clears way for Biscuit Run suit to go to trial

The 2009 purchase of Biscuit Run, the 1,200-acre tract at the center of the $20 million tax credit battle, still holds the record as the biggest land deal in Albemarle County history. The 2009 purchase of Biscuit Run, the 1,200-acre tract at the center of the $20 million tax credit battle, still holds the record as the biggest land deal in Albemarle County history.

The original purchasers of the 1,200-acre Biscuit Run tract just south of I-64 have been battling Virginia’s Department of Taxation for years over a $20 million tax credit claim, and on Tuesday, a county judge denied a challenge from the state, clearing the way for a spring trial date.

“It’s wonderful news,” said Craig D. Bell, a Richmond tax attorney representing Forest Lodge, LLC, the group of wealthy locals that originally bought the plot. “The Tax Department was trying to get the case thrown out before we had a trial, but the judge addressed each and every issue raised, and said ‘No.’”

Brian J. Gottstein, spokesman for the Office of the Attorney General, had no comment beyond confirming the case would go to trial April 15.

At $46.2 million, the 2009 buy went down in the record books as the biggest land deal in Albemarle County history. Plans to turn the land into a state park stalled when a legal battle erupted over the assessed value of the land, and Biscuit Run became a prime example of how Virginia’s land conservation program can go seriously—and expensively—awry.

Turning the land over to the Commonwealth for the creation of a state park allowed in 2010 allowed Forest Lodge to claim 40 percent of the value of the gift in conservation tax credits. But they claimed the state lowballed them on Biscuit Run’s value. Two years after the purchase, they filed suit to get a court to say the tract was worth $88 million, as opposed to the state-assessed $40 million—and that the Department of Taxation owed them an extra $20 million.

Since then, the state has pushed back with a number of technical challenges to the claim. The most recent was a motion for summary judgement filed last November, which argued that Forest Lodge’s appraisal didn’t meet the standards of the state tax code, and that the company’s appraiser wasn’t qualified. Bell said the motion also questioned whether Forest Lodge’s handing over of the land constituted a gift under state law.

But Albemarle County Circuit Judge Paul M. Peatross Jr. deemed the state’s arguments were without merit, clearing the way for a trial now set for April 15 through 17.

“That was a huge ruling against the Tax Department,” Bell said. He said there’s little chance the state will fire back and try to stall the trial further, so now the argument will be squarely focused on whose assessment was accurate. And Bell said the numbers are on his clients’ side.

The state used Richmond real estate valuations instead of local ones to come up with its $40 million number, he said, which dragged the assessment down. Land was—and is—worth much more in the Albemarle growth area. “There’s not a lot of room to have a piece of land like this developed here,” he said. “I am confident we will carry the day.”

 

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