The City of Alexander has filed an Eminent Domain lawsuit against David Jacks, owner of the property that makes up the east end of Alexander City Park, near Highway 111. The case has been filed in Saline County Circuit Court. Council members approved the action at the March 20 council meeting.
Attorney Lana Fraser brought council members up-to-speed as to where the city stands in this on-going saga. Due to her familiarity with this case as the former City Attorney, Fraser was selected by the council at the February meeting to represent the city. Fraser is now with the James Law Firm in Little Rock.
First she gave council members a walk-through of a document provided by Jacks, which makes claims without the documentation to back them up. Not to mention his lack of understanding of tax law.
Fraser said Jacks, "[M]ade a proposed offer for the City to purchase the property without going through the court system." The document was labeled, "Settlement of Lease Claim and Acceptance of Land Donation."
"[C]learly it's not an offer to donate the land exclusively," Fraser said. "The document, first of all, insinuates or implies that there was a lease agreement between the City of Alexander and Mr. Jacks to lease the property. I spoke with the Mayor (Crystal Herrmann) and I also spoke with (Council Member) Juanita (Wilson) about whether or not there was any indication there had been a written agreement entered into to lease the property for 40 months or for at any time. It's my understanding there is not."
Fraser said Jacks is claiming the "Lease Agreement" was for $2,000 a month and is attempting to claim a breach of contract.
"That lease would have to be in writing," Fraser continued. "So we're looking at ... does Mr. Jacks have a valid breach of contract for a lease agreement claim? I don't think that any court would find that there is a valid contract ever between the City of Alexander and Mr. Jacks ..., because that agreement was not in writing."
Fraser said there's also no evidence of a verbal lease agreement.
In Jacks' proposed document, "He's asking the city to acknowledge basically that they've had exclusive possession of the property and in spite of his demand for payment, they failed to do so," Fraser continued. "He was willing to waive that if we would agree with these terms."
"I don't believe that that's a good idea because for one, this is saying and says without admitting that such payments were wrongfully withheld basically if we were to admit that, that would be a taking and without just compensation," Fraser explained. "Which is exactly what we're not wanting to do here."
Explaining Jacks' actual proposal Fraser said, "He proposed to donate the land for public purposes only so that he could be included in a Federal and any other state regulatory tax rules. He could get an exemption"
"And in fact, you can donate to a city or state entity for a taxable deduction," Fraser continued. "However, it would have to be the fair market value of that property for the deduction."
"He asked us to give him (a) tax deduction in the amount of $248,248," she said. "I don't know that that's the correct value from that appraisal from back in January of 2020, but he's asking us to use that appraisal."
The city had been mowing the grass on the eastern parcel for many years. As far as anyone knew it was city property. The improvements made to that area were done during 2017 and 2018.
After the improvements were completed Jacks contacted then Mayor Paul Mitchell asking about the construction on his property. According to Mitchell he tried to negotiate a resolution with Jacks but they were all basically one-sided, due to Jacks’ refusal to respond to any offers. Mitchell had even hired a real estate lawyer to no avail.
When first dealing with this issue, Mitchell had said Jacks wanted to be paid the value of the property with all the improvements the city made included. That now appears to be true. The $248,248 amount may have been derived from a Freedom of Information Act request from Jacks' attorney, at the time, asking for all the receipts for the improvements.
"He also said, well, asked the City to go ahead and issue him a check for the $68,000 amount despite (the City) owing $80,000, according to him, as a settlement for the breach of lease," Fraser said. "Obviously we don't have a lease, so I don't know how it's breached."
The $68,000 amount is based on an appraisal of the 2.13-acre parcel Alexander received September 29, 2022. The appraisal is for the bare property, not including any of the improvements. One of the drawbacks of that location is that it sits in a flood area alongside Crooked Creek.
Mayor Crystal Herrmann told council members she had spoken to Jacks recently and explained to him he can't donate the property to the city and be paid the $68,000.
Fraser said, "I proposed the offer or the counteroffer, I guess you could say if he wanted to donate it, of course we would agree to give him a special warranty deed that would allow him to write that donation off."
Fraser provided council members with two documents. One will be used if Jacks decides to donate the property at an appraised value of $68,000. The other allows for the purchase of the property from Jack's for the same appraised value of $68,000.
A check for $68,000 has been filed with the Saline County Circuit Court. Both the $68,000 and the $5,000 retainer for Fraser's legal services are being paid out of the Parks and Recreation Fund. It's now up to Jacks to take the next step.
What events lead up to Alexander reaching this point?
As it now stands the City Park is made up of two parcels. One was donated by Douglas W. Loftin, Jr. and his wife Cindy Loftin. That parcel makes up about three-fourths of the park including most of the paved parking lot and everything to the west. The parcel in question starts near the edge of the parking lot and covers the area to Highway 111.
According to an article published in The Alexandrian on Wednesday, August 18, 2021, Fraser reported to council members her findings after conducting a deed search on the two parcels. The following are excerpts from that article.
After a report given by Alexander City Attorney Lana Fraser, it is going to take a land surveyor to determine the location of the city park’s boundaries and how much of it is already owned by the city. Based on a warranty deed issued to the city in 2004 and a quit claim deed issued in 2016, Fraser says it appears the 2004 deed has more acreage than the 2016 deed.
Currently, the city park is made up of two parcels of land. The western parcel makes up about three-fourths of the park and was deeded to the city by Douglas W. Loftin, Jr. and his wife Cindy Loftin in 2004. It was also deeded to the city by the Arkansas Land Commissioner for unpaid taxes in 2016.
According to the Saline County Assessor’s Office the smaller eastern portion is owned by David W. Jacks. Saline County records show the Loftins sold the eastern portion to Jacks in the year 2000.
“It’s quite possible you may have a color of title,” Fraser said. “The Loftins could by accident deeded both to Mr. Jacks and the city the same little spec of land.” ...
The article continues.
Her research has also uncovered documents that show Jacks had lost ownership of the property twice due to non-payment of property taxes. He then regained ownership twice after paying restitution on the overdue taxes.
“It’s understandable you thought it was city property,” she said.
The Alexandrian also reported on the various improvements when they were approved by the council.
Timeline of Improvements
Published Wednesday, December 6, 2017
Published Thursday, March 8, 2018
Published Wednesday, April 18, 2018
When the issue with Jacks first arose former Mayor Paul Mitchell halted all planned improvements and large maintenance projects to the park, except for mowing the grass. The Parks and Recreation Fund derives its revenue from a quarter-cent of one of the city's three one-cent sales taxes. Not knowing what settling this legal issue will cost Mitchell did not want to draw down the fund until this is settled.
Near the end of the March 20 council meeting City Recorder Sharron Bankhead warned council members that Crooked Creek is eating away that section of the park, getting closer to the gazebo. She expressed the urgency of settling this issue before that area of the park is beyond repair.
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