New Lawsuit Could Stall Middleburg-Area Subdivision Project

A proposed subdivision near Middleburg has garnered opposition from neighbors and community groups, as well as skepticism from town planners. Now, legal action threatens to, at least temporarily, remove the property owner’s control over the land.

The Middleburg Land 1 LLC development company, which is managed by Andrew Hertneky, last year proposed to develop a 38-home subdivision called Banbury Cross Reserve on a portion of a 571-acre property about a mile east of Middleburg’s corporate limits—via 28 up to 4-acre cluster lots and 10 up to 70-acre rural economy lots, along with 67 acres of open space.

Although the property sits outside the town limits, it’s located within the town’s extraterritorial subdivision control area, which falls under the purview of the town’s subdivision ordinance. That means the town Planning Commission must vote to approve or deny the developer’s preliminary subdivision application.

The commission was obligated to approve the application if it was in compliance with town regulations, but in September 2019 voted to deny it because a majority of commissioners felt the developer did not provide enough information. Middleburg Land 1 subsequently resubmitted its preliminary application to the town and county, and received conditional approval from the county, since it was found to be in general compliance with the county’s zoning ordinance. On July 27, the town Planning Commission tabled a second vote to Aug. 10, following a three-hour public hearing in which dozens of area residents voiced their concerns about the project.

Common among them were that the development could deplete the area’s water supply, harm its rural character, take away agricultural land forever, infringe on a suspected slave burial ground, undermine properties’ eligibility for historic designation, and adversely affect road safety.

Planning commissioners were expected to discuss those concerns with Hertneky’s team before next week’s meeting.

But even if the commission votes to approve the preliminary application on Monday, Hertneky’s progress could be stunted another way—by a lawsuit brought against the property owner.

Jane Page Gunnell Thompson has sued Thomas Nelson Gunnell, her brother and the Banbury Cross Reserve property owner. Thompson is pushing for Gunnell to be removed as the sole trustee of the Gunnell Family Dynasty Trust, which includes the Banbury Cross property as an asset, because of the way she claims Gunnell has managed the trust throughout the past 12 years.

Among other allegations, the lawsuit challenges Gunnell’s ownership of the Banbury Cross property, alleging he may have “wrongfully transferred, titled or otherwise alienated [assets] from the Dynasty Trust” by retitling the properties to newly formed corporations multiple times, most recently into Middleburg Land 1 and Middleburg Land 2.

When asked whether the lawsuit might factor into the Planning Commission’s Aug. 10 vote on the preliminary application, Town Attorney Martin Crim deferred to Town Manager Danny Davis, who noted Assistant Town Attorney Olaun Simmons’ response at the July 27 Planning Commission public hearing.

Simmons at that meeting said the requirements to submit a preliminary subdivision application don’t require the applicant to provide a clear title for the property. He said the applicant must, however, provide a deed reference, tax map and parcel number, the date the subdivision plat was drawn and revised, and the name and address of the property owner, all of which, he said, Hertneky provided the town.

“That will play out however it will, but it should not affect your deliberations,” he told planning commissioners on July 27. “He has shown you that he is the owner even though he is being challenged.”

While commissioners have been told that Thompson’s lawsuit against Gunnell should play no role in their Aug. 10 vote, they will need to consider whether Middleburg Land 1’s resubmitted application objectively complies with the town’s subdivision ordinance. If it does, statute requires that they vote to approve it. If they don’t, the town could be faced with its own legal battle.

At the July 27 public hearing, Nick Albu, a land use attorney representing Middleburg Land 1, said that if the Planning Commission votes to deny the preliminary application, the developer would sue the town.

“A disapproval of the application by the Planning Commission without a proper basis would be, by definition, arbitrary and capricious and in violation of Virginia Code,” Albu wrote to Deputy Town Manager Will Moore on July 15. “A disapproval of the application … would amount to an unconstitutional regulatory taking in violation of the Fifth and Fourteenth Amendments of the United States Constitution and Article 1 [section] 11 of the Constitution of Virginia … giving rise to the applicant’s recovery of damages.”

Thompson’s attorney, John Clarke, said they’re hoping the Middleburg Planning Commission votes to conditionally approve Middleburg Land 1’s preliminary subdivision application—conditional on how Thompson’s lawsuit plays out.

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