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Bill Freehling is a business writer for The Free Lance-Star and Fredericksburg.com. This blog is on Fredericksburg-area business. Send an e-mail to Bill Freehling.

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Architect files federal suit against Celebrate Virginia developer

A sculpture is surrounded by overgrowth and weeds at the proposed site of the National Slavery Museum in Celebrate Virginia South. (Reza A. Marvashti / The Free Lance-Star)

The architectural firm that designed the never-built National Slavery Museum in Fredericksburg’s Celebrate Virginia South filed a federal lawsuit Tuesday against the complex’s developer.

The lawsuit involves a restriction that Celebrate Virginia South LLC  placed on the 38 acres it gave the National Slavery Museum in 2002. The restriction allows the land to be used only for an African-American heritage museum or some other charitable, educational or public purpose. The deed of the gift filed in 2002 refers to the restrictive-use covenant, but the covenant document itself was not filed publicly until 2009.

New York City-based Pei Partnership Architects, which designed the slavery museum, contends that the restriction is not legally enforceable and wouldn’t convey with the land should the property be sold.

The National Slavery Museum, which was spearheaded by former Virginia Gov. Doug Wilder, never paid Pei for the architectural work. Pei says it is owed more than $6 million, money that the firm hopes to recoup in an eventual sale of the 38 acres.

The slavery museum organization now owes more than $300,000 in delinquent real estate taxes to Fredericksburg. The city has begun the lengthy legal process of selling the land at auction to recoup the back taxes.

Paul A. Prados, an attorney for Fairfax-based law firm Day & Johns who is representing Pei, claims in the lawsuit that the restriction on the land diminishes its value by millions of dollars. The suit points out that the land was valued at about $19 million when it was gifted to the slavery museum in 2002.

Removing the restriction would allow a land sale to fetch significantly more money, Pei contends. Pei also argues that Celebrate Virginia’s developer gave up any right to the land when it donated it to the museum.

The suit, which was filed in U.S. District Court in Richmond, asks a judge to declare that the restrictions are unenforceable and do not convey with the land . A similar lawsuit that Pei’s attorney filed in Fredericksburg Circuit Court will be dismissed.

Prados asks for a federal judge to adjudicate the matter before the city sells the land at auction. He said Pei will ask the same of the city and intervene should a sale become imminent.

The lawsuit is not expected to delay the tax sale of the land, said John A. Rife, a partner with Taxing Authority Consulting Services, the Richmond law firm representing the city. He anticipates that the sale will take place this spring.

The Silver Cos., which is developing Celebrate Virginia, will “vigorously” oppose the federal lawsuit, said Jud Honaker, Silver’s president of commercial development. He said five different law firms have reviewed the restriction and determined that it is in fact legally enforceable and would convey with the land.

Silver contends that the gift agreement made in 2002 allows Celebrate Virginia South LLC, as the donor, to lift the restrictions. That could allow Silver to control the ultimate fate of the 38 acres should the matter proceed to auction.

A sculpture surrounded by overgrown weeds is the only physical sign of the museum’s onetime existence. The museum, which essentially has ceased all operations, could pay off the tax bill anytime before the auction and end the proceedings.

Permalink: http://news.fredericksburg.com/businessbrowser/2013/01/23/architect-files-federal-suit-against-celebrate-virginia-developer/

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