(CORRECTION: 03-26-2023 Paragraph 17, City & 22, $5,000.)
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?
When Fraser took on this case in 2021 she was still Alexander's City
Attorney. The first issue she wanted to deal with was the properties'
chain of custody.
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
Alexander city council approves gazebo plans for park. ($60,000)
Published Thursday, March 8, 2018
Alexander council approves $55,000
for park fountain.
Published Wednesday, April 18, 2018
Council accepted quote to light pathway’s in the city park from
Alliance Electrical Services for $50,977.29.
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.