Algonquin Highlands Taxpayers to Pay Huge Settlement for Expropriated Lands

Despite growing odds that the project may never happen, the costs for expansion plans at the Stanhope Airport have just increased radically with a recently negotiated settlement for land expropriated from a local family. The Township of Algonquin Highlands has reached a settlement agreement with the Middleton
family totalling $765,830.01 over lands deemed necessary for airport development, which lie north of the Stanhope Airport at the corner of Airport Road and Barry Line. The statement issued by the Municipality reads, “The land in question was deemed necessary by the Township for the expansion of the Haliburton-Stanhope Airport. By way of an agreement pursuant to the Expropriations Act, the land was
transferred to the Township on October 31, 2007 for the sum of $200,000. Pursuant to the agreement, the Middleton family retained the right to pursue further compensation for the land. As part of their claim, the Middletons asserted that the 100 acres would be severable into 10 rural residential building lots
thereby increasing the value of the land, and also that they were entitled to more money for injurious affection. Therefore, the proceedings of the OMB were intended to address and determine if the Middleton family was, indeed,
entitled to any additional compensation for the land over and above the $200,000 paid for the 100 acres, and also to determine if the Middletons were entitled to compensation for injurious determine if the Middletons were entitled to compensation for injurious affection and disturbance to their cottage property on the other side of Barry Line. The Township asserted that further severances beyond the existing four building lots on the 100 acres would not be permitted
under current policy, and also that the situation did not warrant an award for injurious affection. (It is interesting to note that while Council’s statement indicates
that someone was paid to argue in front of the Ontario Municipal Board that it wouldn’t allow the property to be divided up, their Business Vision details plans to subdivide a slightly smaller parcel right next door to the Middleton parcel into at least ten residential airpark lots. The same document suggests that 30 or 40 lots would have a ‘substantive positive impact on business.’) As part of the pre-hearing mediation process, various experts and professionals were required by each side to assert their respective claims in an attempt to narrow the issues, and discuss
the possibility for settlement. The Expropriations Act provides for the OMB to award payment of a claimant’s legal, professional and consulting fees, and accordingly the issue of costs is also a critical factor in any settlement discussion. During the mediation process, it became apparent that the cost of proceeding forward to a full hearing, even if successful, would have been far greater than to
reach a negotiated settlement, particularly given the Middletons’ right to claim for their costs of the proceedings from the Township. After weighing all of its options, the Township chose to settle. The Township appreciates the ongoing concern expressed by taxpayers with the pursuit of this long and trying process. Upon
the advice of the Township’s legal counsel, details of the process itself may not be disclosed however, Council knows and believes that the public has the right to know the ultimate result. ”The total amount of the settlement represents a further $200,000 for the 100 acre parcel, $150,000 for injurious affection and disturbance damages, $53,334.25 for outstanding interest on these two amounts and finally a resounding $362,495.75 for professional fees including lawyers, planners, appraisers and other professionals. In addition a further amount, not to exceed $5,000, will be paid at a later date to cover outstanding legal fees incurred by the Middleton’s legal counsel from the date of the agreement to its completion and closure. But that’s not all. Over and above the monies settled on the Middleton family, the municipality has incurred $85,000 for their own legal fees and disbursements and an additional $27,033.50 for professional advice from their planners, appraisers and other professionals. The statement issued further states, “Although the Township is extremely disappointed with the outcome of this process and had hoped for a more cost effective result, the closure of this dispute
means the lands are now owned by the Township and protected for the future.”
Reeve Eleanor Harrison, who was out of the country when the final decision was actually made, said she was shocked at the settlement amount. Harrison returned for Council’s meeting on March 4th when it ratified the decision made on Friday, February 26th during one of a series of closed sessions on the matter.
Harrison was reluctant to speak outside of the realm of the Council’s official statement, but in response to questions about the impact on the 2010 budget she said, “When the first budget meeting took place, we were unaware of the magnitude of this expense.” Harrison confirmed that the initial $50,000 in the budget for an annual payment to cover off the airport development project
would remain in place, but considerable discussion would be required before a decision was made on managing the settlement. “We aren’t in a position to take that much money out of our reserves in one fell swoop, so the settlement will have to be dealt with through some form of long term debt, either through
debenture borrowing or a line of credit.” When asked how the settlement agreement will impact further easement negotiations required for airport expansion, Harrison said it wouldn’t be appropriate to speculate about that at this time, particularly as the future of the project as a whole seems to hang
in the balance. Harrison did voice considerable frustration and disappointment
in the fact that there is a distinct lack of communication between the municipality and the Canadian Environmental Assessment Agency. She said, “If the CEAA could give us any kind of answer we would be in a much better position to decide how to move forward. Even if the answer was a resounding ‘no’ it would be
better than no answer at all. If faced with the possibility that further studies are required or even that the expansion project may not proceed, the Council could consider the wisdom of asking whether we could use some of those funds for further rehabilitation of existing infrastructure.” Despite efforts to work with MP Barry Devolin to get some answers or clarification from the federal government, Harrison even said, “It definitely appears that there may be some stalling
tactics being used on someone’s part, making the situation more and more frustrating. Ward Councillor Carol Moffatt agreed and said that the government may be reacting to the amount of negative reaction the project has generated.
Despite what the CEAA reports suggest, the federal government is unlikely to offer any opportunity to extend the deadline for completing the project. Given the recent budget announcement, the federal government appears to have little stomach for extending stimulus or infrastructure spending beyond 2011.
Harrison finally said, “At this point, although it has come at an extraordinary cost, we have secured the future of the airport.” Speculation about whether or not the airport expansion project will actually take place during the life of this Council runs rampant. Even Harrison, who has been the strongest proponent of airport
development, admits that the project could be on shaky ground. When Moffatt was asked if she thought the airport expansion would move forward, she said, “There are many days ahead, but no, in my opinion the project is dead in the water. It’s March, we have no idea where the environmental assessment is, we can’t
do any work between April and July because of bird nesting and the election is in October, so the timeline is not conducive to a project of this magnitude.” Moffatt said it would be left to the new Council to govern the next step. Moffatt also said, “When it comes to the airport, I believe the key is to take a hard look at what the Council has learned and find a new approach for doing business. We need to find a way to collectively move forward as a community and for the growth of
the municipality; I see that as a good thing.” Speaking on behalf of the Middleton family as a whole, Bill Middleton had a number of comments to make after having to
remain silent for so long. First and foremost he said, “It has been a very tough three years and we are so relieved that it is over. But we’re also still a bit angry and even bitter over what has happened, not only to us, but as a result to our fellow property owners and taxpayers.” Middleton said that his family was very taken aback at Council’s sudden decision to settle, as it seemed to mean that the Council members had finally come to their senses. The expropriated property was a place for all of the family to play, learn to drive and enjoy the natural landscape for generations. Middleton said, “Family members even got proposed to out
there in the moonlight.” He said that initially the family just wanted the property back, but by the time the Council forced the settlement, it couldn’t happen as they had paid capital gains on the first ($200,000) payment and the government had part of the value. According to Middleton, he and his family spent hundreds of hours trying to prove that the expropriated land truly enhanced the value of
their remaining cottage property. He said that early in 2007 the township purchased 84 acres of unsalable, landlocked land to the east of their parcel for a total of $275,000 a price that was 63 percent more per acre than what they were
offered for prime residential land on two major roads. In an effort to substantiate their belief that their land was worth more, the family suggested to Algonquin Highlands that they hire a local realtor to produce letters of opinion rather than
hiring a more expensive appraiser and Middleton said that the township agreed. However, when a well known senior broker provided an opinion that the land had a value of $543,000, he said the opinion was rejected by the township as not
coming from a qualified appraiser. So the family hired an appraiser who ultimately valued the land almost the same at $530,000. Middleton said, “If the municipality had agreed with the realtor’s valuation of $543,000 in April of 2008, the family would have settled. At that time our costs were less than $15,000 and the
saving to the taxpayers of Algonquin Highlands would have been almost $500,000.”
The total appraised value of the expropriated land and injurious affection equalled $816,000. However the family agreed to an overall reduction of 33 percent and the settlement was made for $550,000 on March 5th. Including costs incurred
for professional advice for both the Middleton family and the municipality and interest totals $1,077,863, which is more than the estimated cost to full rehabilitate the existing airport. During the process, the family was also forced
to hire a qualified land use consultant and planner quo unequivocally refuted the municipality’s claim that the land couldn’t be severed for residential lots and a hydro-geological engineer to respond to statements by the municipality that
earlier Health Department approvals for septic systems and water were insufficient. In addition an acoustical engineer was required to prove that expanded airport operations would have a significant negative effect on their remaining 4.5
acres of lakeshore property. Middleton said that at one point the municipality actually claimed that there would be less noise with the expansion. Faced with these expenses, Middleton, who is a 74 year old retiree, found that he had to mortgage his family home to pay these additional costs. “We knew that under the Expropriations Act we would get some of our costs back, but not what
percentage and it could have been a year or more before we recovered our costs,” he said. “Our families were suffering and the prospect of going through another six months or more was unbearable. The worst part was that the horrendous amounts of money would ultimately have to be paid by the taxpayers. To increase the costs further became very hard to justify.” “People don’t realize that from the beginning the Council has ignored the opinions and advice of the citizens who elected them,” he said, adding that his family, along with the majority of local
property owners, has insisted throughout the long drawn out process that the project wouldn’t work, not then, not now and not in the future. “Their dreams and ideas were unrealistic and wrong. What we all need are essential things like
safe drinking water, good roads, sewage disposal and waste management; things that the general public can benefit from.” Middleton said that at no time did the
municipality actually make an offer. His family was asked to come up with their bottom line which the municipality finally accepted and he gave them full marks for that. But he said, “Much of the cost for professional advice was due to their unwillingness to accept our information. There was no earthly reason for them to incur so much additional cost.” Middleton referred to a comment made by
Muirhead in the County Voice in January when he said, “It’s quite possible that this Council could succeed in chaining Algonquin Highlands to an elephant and be far from their chambers before the feed bills start to arrive.” Middleton concluded his comments by saying, “Like it or not, they’re going to have to explain some of the feed bills now!” Paul MacInnes, President of the Maple, Beech & Cameron Lakes Area Property Owners Association said, “This tragedy just keeps getting worse and worse. In this chapter Algonquin Highlands mismanaged a land acquisition and
the taxpayers ended up paying an unnecessary half million dollars in legal and consulting fees. All this for a project that is not needed, not justified and not wanted by the people who will pay for it.” While the settlement closes Ontario Municipal Board File No. L090003, it likely opens a number of other doors, but those will be the subject of future articles. ?