09 April 2017

More Bad News Bear Creek: Newton Co. set to deed back approx. 200 acres of land outside of Mansfield, GA

The Piedmont Chronicles
9 April 2017

More Bad News Bear Creek: Newton Co. set to deed back approx. 200 acres of land outside of Mansfield, GA

Hot on the heels of the concerning information regarding the Jones Co. mitigation property that was reported here at The Chronicles last year, and also, after recent revelations, more recently covered by several media outlets, including All on Georgia - Newton, is this information regarding another mitigation property for the ill-fated Bear Creek Reservoir - this one in Newton Co. and totaling approx. 200 acres - that appears to be contractually bound to be deeded back from Newton Co. to the original landowners in July of this year.


The property in question is basically a series of streams and wetlands in the fertile fields just west of Hwy 11 and just south of Mansfield, GA. Known and recorded on several maps back in the early 1900s as Leaksville, and also Leakton, this general area is in the vicinity of Spears Lane. These properties were acquired for the purpose of being used as mitigation for the destruction of wetlands that would be caused by the creation of the Bear Creek Reservoir, as mandated by federal law.

The original purchase, in 2006, was for 79.66 acres with a price to purchase of $437,000 with Circle S Enterprises as seller, being represented by local attorney Phil Johnson, with Newton County as the buyer, being represented by Wm. Thomas Craig, Esq. In that agreement, the seller retained an option to repurchase the property, for one dollar, once the county converted it into acceptable wetlands and secured a mitigation easement and recorded a declaration of covenants approved by the U.S. Corps of Engineers.

Another transaction occurred in 2009 with Circle S Enterprises, Leakton, Ltd, and JHS3,collectively, as sellers, and Newton Co. as buyer, for another 120 acres at a sales price of $660,000. The driving force of this transaction, per Phil Johnson, was Tommy Craig, the attorney for Newton Co. at the time. Apparently, the sellers originally really had no interest in this second transaction as they were under the impression the Section 404 permit needed for the construction of the reservoir would and should have already happened years before. The case was made that more mitigation property was needed for that to become a reality.

Fast forward another five years to 2014 and another transaction occurred related to this property. In order to fully and accurately explain this, I'm just going to print Phil Johnson's written account of it. As The Chronicles understands it, this information has also been given to the Newton Co. BOC: 

  1. The final transaction occurred in 2014 (the “2014 Transaction”).  The County Attorney approached me in the spring of 2014 to ask me to contact my clients to discuss the purchase by the County of the 17 breaches and access points for watering cattle, and the movement of cattle among pastures.  He told me that the Corps of Engineers had undergone a change in philosophy regarding what was acceptable as mitigation land during the lengthy time between the original application for the Section 404 permit, the submission of the mitigation plan, and now.  He indicated that the breaches rendered the mitigation use of the land conveyed in the 2006 and 2009 Transactions questionable due to the fact that cattle and horses could go across the Mitigation land and contaminate the water.
At first I had indicated that I did not believe the Spears family would have any interest in the sale of any breaches because of the negative impact it would have on the use of the remainder of their land for agricultural purposes (cattle grazing).  In addition, I told him they were considering suing the County to get the mitigation land back because of the failure of the County to complete the recordation of the Declaration of Restrictions and return the land as promised.  It has now been close to 8 years since the initial assurance by the County Attorney that the issuance of the Section 404 permit, the recordation of the Declaration of Restrictions and the reconveyance of the land was imminent.
Therefore before my clients were even willing to talk about terms for the sale of breaches, they wanted the original mitigation land back in our control.  Also, the Spears, since the deeds from the 2009 Transaction were in my possession, were still getting taxed for the property.  Finally, the Spears were trying to sell their land and the cloud of the Memorandum of Agreement made marketing the land much harder due to the uncertainty of when the county would reconvey the Mitigation land.

So the County Attorney suggested that the County have Quitclaim Deeds back to the Spears executed and delivered to me.  I would release the Warranty Deeds to be recorded.  The Warranty Deed for the 2006 conveyance was already recorded.  The Warranty Deeds for the 2009 Transactions were released and recorded, and the Quitclaim Deeds executed by Newton County reconveying all the land for the 2006 and the 2009 Transactions were delivered to me.  Finally the County reimbursed the taxes paid for the period from 2009 until 2014.
Having agreed to deliver the fully executed Quitclaim Deeds reconveying the property back to the Sellers, we then negotiated the sale of the breaches.
Of the 17 breaches and access points for cattle watering and crossing, the Spears agreed to relinquish 10 of the breaches for the purchase price of:
  1. $290,000.00 for the breaches; and
  2. $7,650.00 for three water taps to be obtained by the Seller for areas where the cattle would be cut off; and
  3. $20,000.00 for the installation of a well in an area where the cattle are cut off and there is no city water available.
The Seller would be able to continue to use the crossings for a term of the lesser of thirty-six (36) months or until the mitigation activity is begun.
Paragraph 3, subparagraph 8, provides that:
“Newton County shall have one-hundred and twenty (120) days to file the Declaration of Restrictions and Covenants as approved by the United States Army Corps of Engineers on the Property what is subject to the 2007 (sic 2006) Contract, the 2009 Contract and contemplated herein from the date Newton County accepts the delivery of the Warranty deed from the Escrow Agent as set forth in the Escrow Agreement.”
The Warranty Deeds for the 2006 and the 2009 Transactions and the conveyance of the breaches have been delivered to Newton County, and in fact, recorded by Newton County.  The Spears family and me were assured that the Declaration of Restrictions and Covenants would be recorded and that we could then record the Quitclaim Deeds from Newton County reconveying all the Property to my clients within the 120 day period, but Newton County has failed to record the Declaration of Restrictions and Covenants.
The Sales Closing Statement for the Conveyance of Breaches into Mitigation Areas Previously Conveyed Spears Farm – Bear Creek Reservoir, dated July 15, 2014, provides at paragraph 2:
2) The Purchaser shall complete the application for the Section 404 Permit with priority emphasis and shall secure said Permit, record the Covenants restricting usage of the Mitigation Lands and instruct (sic) the Escrow Agent, Philip A. Johnson, to record the reconveyance deeds to the Seller within thirty-six (36) months of the date hereof.

Under the terms of the Contract for the 2014 Transaction, the County had 120 days from the delivery of the Warranty Deeds in which to record the Declaration of Restrictions and Covenants approved by the COE, which they have not done.
Then under the terms of the Closing Statement, the County had 36 months from July 15, 2014, to obtain the Section 404 permit, record the Declarations of Restrictions and provide instructions to the Escrow Agent to record the reconveyance deeds.
Thus the outside date for the authorization to me to record the Quitclaim Deeds is July 15, 2017.
It appears now that Newton County has elected not to pursue the construction of the Bear Creek Reservoir based upon action taken by the Newton County Board of Commissioners in the Fall of 2015.  Further, according to research by Larry McSwain, a former biologist with the Georgia Department of Natural Resources, the COE and other governmental bodies with review authority appear unlikely to accept the inclusion of the Mitigation land conveyed under the 2006 and 2009 Transactions.
Consequently, I would request that Newton County record such Declaration of Restrictions and Covenants in the format of the model United States Army Corps of Engineers Declarations of Restrictions and Covenants for wetland and stream mitigation properties within the next 120 days, and provide the recordation information to me with an acknowledgment of our stated intent to record the Quitclaim Deeds from Newton County to Leakton, LTD, JHS3, Inc. and Circle S Enterprises, Inc. reconveying the property in the 2006 and 2009 Transactions.
  1. REAL ESTATE SALES CONTRACT AMENDMENT dated July 15, 2014 (without attachments)
  2. CLOSING STATEMENT Dated July 15, 2014
  3. Quitclaim Deeds to Leakton, LTD, Circle S. Enterprises, Inc. and JHS3, Inc.
This is obviously pretty clear cut.

Also, this is quite interesting especially in light of the forensic audit performed by David Sawyer a few months back. We now know, in this writer's estimation, that William Thomas Craig knew full well by this point, 2014, that the Bear Creek Reservoir was never going to happen. I feel as if we know this to be a fact based upon the revelations of correspondence with Craig and the U.S. Corps and other federal and state agencies with the aforementioned audit. What was Craig thinking?

Regardless, it seems to be a done deal that this real estate, with an original investment of upwards of one and half million dollars, will be deeded back from Newton Co. to the original owners of this land in July of this year.

And my word - the financial hits just keep coming for Newton County, don't they?


This writer does not begrudge attorney Phil Johnson or any members of the Spears family one bit. Hell, it seems as if they really didn't want to sell this property. It only hurt the market value of the rest of their property, and the limbo they were in created a real ownership hardship in this writer's estimation. No, this was all Tommy Craig. Was this negligence? Or just old-fashioned stupidity on his part?

Either way, it is far past time for the Newton Co. BOC to start the process of filing a claim against Attorney Craig's Errors & Omissions Insurance policy. Between the Jones Co. property and this one, we are looking at major financial losses. And per the word on the street, we may be seeing more issues such as this going forward. 

That's the way we see it, folks.

Thanks for reading.