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Builder sues Hamilton over utility fees
The owner of the nine remaining undeveloped lots of Hamilton Meadow, on East Colonial Highway in Hamilton, has gone to court to protest the town's fees for hooking up his houses to water and sewer lines.
Leesburg developer Mike Gorman, president and chief executive officer of Oak Ridge Inc., is developing the Hamilton Meadow subdivision on land owned by Howard Rogers before his death in 2003. In late 2005, Oak Ridge ads promised "estate" homes of up to 5,500 square feet on four levels at prices pushing $1 million.
Well into the crash of the real estate and credit markets, the houses and prices have shrunk. Oak Ridge today is offering 30-day delivery on a 2,750-square-foot home in Hamilton Meadow for $519,900 – marked down more than $100,000. Others, as yet unbuilt, are offered "in the 400s," and no sales have been recorded since late 2007.
In March 2006, Hamilton Town Council, faced with rising costs to maintain and upgrade its water and sewer plants and pipes, voted to increase its water and sewer availability and connection fees.
Before the increase, the total to hook a new home up to town services was $26,500. As of July 1, 2006, the total cost to hook up to water and sewer is $55,000.
The builder's lawsuit contends that the town never did a thorough study of rates and costs, as required by Virginia law, and that the increases are unfair and unreasonable.
Oak Ridge is asking the court to order Hamilton to return its rates to the March 2006 level. It also wants a refund of the fees it paid for a lot to connect it to the utility systems in November 2007.
The builder hired the Leesburg law firm of Sevila, Saunders, Huddleston & White to conduct its own study of water and sewer rates. The law firm concluded that a reasonable rate -- water and sewer availability and connection fees combined -- would be $17,261.
Oak Ridge paid the $55,000 fee in November 2007 but accompanied its payment with a letter of protest.
According to council minutes, the builder was offered the option of paying the fees for the remaining lots at the old rate all at once before the new rates went into effect in July 2006.
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