Gets 472 acres in return
Effingham County commissioners voted unanimously Friday to pay $7 million to settle the Old Augusta water and sewer lawsuit in exchange for 472 acres of land.
The lawsuit filed in June 2011 by Old Augusta Development Group had been scheduled to go to trial next week, with jury selection set for Monday.
Commission Chairman Wendall Kessler said the county doesn't have insurance to pay a breach of contract claim and traded an "unknown for a known" in settling the lawsuit.
Kessler said the plaintiffs originally asked for $50 million but after negotiations settled for $7 million in exchange for the land.
Court records indicate the plaintiffs paid $7.5 million for the land in July 2005. The property is known as the "Grandview tract" and is east of Rincon and adjacent to Old Augusta and Fort Howard roads.
Commissioner Vera Jones said the land includes 350 acres of upland and was appraised in 2009 for more than $8 million.
She said attorneys advised commissioners that in a worse-case scenario, the county could be liable for up to $17 million if it went to trial and lost.
Kessler said the county has the money in reserve, in the general fund and special tax districts, to pay the settlement and it can be replaced once the property is sold.
Jones said even if the property doesn't sell for $7 million, the county could afford to take a loss and still not have to raise property taxes.
She said commissioners have been very frugal and knew this lawsuit had to be handled at some point. "This has been hanging over our heads the entire time we've been in office," she said.
Owners of the Old Augusta Development Group include Springfield attorney Mickey Kicklighter and Gregg Howze, former county commission chairman.
The lawsuit alleged that Old Augusta bought the land and banks made loans for the purchase based on county promises to bring water and sewer services to the tract. The services were never provided.
The suit said the county had no intention of providing the services and committed fraud by falsely making assurances water and sewer would be provided.
Claims in the lawsuit included fraud, breach of contract and negligence.
Commissioners agreed in June to settle a similar lawsuit, paying $325,000 and 2 acres of land to bankruptcy trustee Benjamin R. Roach on behalf of Darrell Trent Morgan, who owned another portion of the Grandview tract.