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THE NONCOMPLIANT JUDGE

by Jordan Green

For more than two decades, a politically-connected judge has held two vacant lots on a busy stretch of Martin Luther King Jr. Drive in Winston-Salem that were supposed to be developed within two years of him purchasing them from the city under an urban renewal program.

The city sold the two properties on MLK — one at Lawrence Street within view of the Winston-Salem State University campus and the other at the busy intersection of East Fifth Street — to Logan Todd Burke, with the sales approved by city council in 1988 and finalized in 1990. The buyer, whose mother Vivian Burke has served on city council continuously since 1977, paid $20,000 for the two lots, which have since more than doubled in value to $44,300, according to local tax records.

As a superior court judge, Burke has gained minor notoriety in his judicial career by handing down a suspended sentence to a woman who starved her pit bull to death and ordering a drunk driver convicted of manslaughter to wear a sign stating that she had killed someone while under the influence. A judicial performance evaluation report released by the NC Bar Association in 2012 ranked Burke second to last among 13 superior court judges across the state, based on criteria that included integrity, legal ability and professionalism.

The city’s senior real estate agent in the late 1980s and early 1990s characterized the circumstances of the sales as “rather unusual.” Two decades later, an assistant city manager speculated that a staff member working on the matter was reluctant to sign his name to an enforcement letter drafted for Judge Burke because he was afraid of retaliation.

Under urban renewal, the city sold properties to investors under the condition that they build on the land within two years of sale and not speculate by banking it and selling it later at a higher price. Yet City Manager Lee Garrity contends the city has only two options for handling the Burke properties — both of which would enable speculation: Release the deeds so that the conditions no longer apply or attempt to repurchase the properties at current fair-market value.

The official position of city staff is based on a questionable reading of the law by the city attorney holding that the expiration of a redevelopment plan throws up a challenge to the city’s efforts to enforce compliance. That analysis ignores the fact that neither the contract nor the deeds reference the urban renewal plan as a basis for Burke’s contractual obligations to improve the vacant lots in a timely fashion. The redevelopment plan for East Winston Urban Renewal Area Project No. 3 expired in 1989, subsequent to city council’s approval of the sale, but prior to Burke closing by making full payment.

“That was 25, 26 years ago,” said East Ward Councilman Derwin Montgomery, who represents the area where the properties are located, noting that he was a year old at the time. “We let 26 years pass, and we didn’t follow through.”

Urban renewal was launched by the city in the late 1950s as a slum-clearance program. Primarily using federal funds, the city acquired about 1,400 properties across a 441-acre swath of East Winston through condemnation, relocated residents and businesses, demolished housing and commercial buildings and then put the properties back on the market.

East Winston Urban Renewal Area Project No. 3 was adopted by the city of Winston-Salem in 1969. Characterizing it as “blighted,” the plan called for removing “conditions which have created or contributed to the substandard character of the project area” and for restoring “the vitality of the area through rehabilitation and redevelopment.”

Both the conditions and the hopes for East Winston articulated 40 years ago sound familiar today. But some of the objectives were different. In the wake of a 1967 race riot and slum-clearance initiatives that worked in tandem with efforts to obtain land for what is now US Highway 52, the city sought to impose a suburban development pattern on East Winston. Objectives of the redevelopment plans included realigning streets to discourage through traffic on residential streets and making room for the expansion of parks, schools, churches and public agencies, while also improving housing conditions, according to a 1972 report by the Winston-Salem Redevelopment Commission.

The city officially reversed course in October 2011 when city council approved the Martin Luther King Overlay District standards, amending the city’s development ordinance “to encourage an urban form (buildings near the street with parking to side and rear) and prevent new suburban-style development along the corridor,” as a planning document put it.

By the time Logan Todd Burke placed bids on the two properties on Martin Luther King Jr. Drive in 1988, the city had been trying without success to find capable developers for almost a decade. Developer Michael Pearsall had purchased the property at the southeast corner of East Fifth Street and Claremont Avenue (now Martin Luther King Jr. Drive) in September 1979, but found that amid the 1982 recession he was unable to build a house on the lot, as planned, and asked the city to take the properties back.

The city bought back the property for the amount Pearsall had originally paid, and pocketed $335 from a performance bond for failure to fulfill the terms of the contract. By then Vivian Burke, who now serves as mayor pro tem on council, had been reelected to her second term.

Meanwhile, interest in the vacant lot at the northwest corner of Lawrence Street and Claremont Avenue percolated in the middle of the decade. Jimmie Lee Bonham — well known today as a community leader — expressed interest in building a barbershop at the site.

In January 1986, local businessman Sam C. Ogburn asked the city to advertise the property for bids so that he could develop a self-serve car wash. But entrepreneurs Chris Moutos and Harvey Kotsionis outbid Ogburn and signed a contract on April 1 to build a take-out seafood restaurant with an eye towards serving students from Winston-Salem State University. That plan was effectively scuttled by an opinion issued by planning staff that the lot was too small to accommodate drive-thru traffic. The city refunded Moutos’ bid deposit in October 1986.

In May 1988, Logan Todd Burke placed bids on the Lawrence Street and East Fifth Street properties, expressing the intention to build an office building and a house for owner occupancy on the respective tracts. The Winston-Salem Board of Aldermen (now city council) voted unanimously to approve the sale in June, with Vivian Burke recusing herself. In September, Mayor Wayne Corpening signed the contract to approve the sale.

By early 1990, the redevelopment plan for East Winston Urban Renewal Area No. 3 had expired and Burke had not made full payment for the two properties on Martin Luther King Jr. Drive, as well as two other parcels purchased under a separate urban renewal project, to complete the sales.

John Butner, the senior real estate agent for the city at the time, noted in a letter to Burke on March 7: “It is rather unusual for the city to permit a buyer to control land in this manner without completing the purchase.”

Butner warned Burke that unless he responded, the city would be forced to terminate the sales and reclaim the properties. Two months later, Burke signed a document agreeing to not speculate on the land, and to improve it according to the plans he had previously he had filed with the city, and made full payment for the properties.

Fast-forward two decades to 2010, when the SG Atkins Community Development Corp. approached the City-County Planning Board about drawing up new development standards for the Martin Luther King Jr. Drive corridor. The community development corporation has undertaken an effort to revitalize the corridor from Waughtown Street in the south to New Walkertown Road in the north, including areas around Winston-Salem State University and a business incubator called the Enterprise Center. The new standards would soon be approved by city council as the Martin Luther King Overlay District.

Derwin Montgomery, who was first elected to city council in 2009, became interested in vacant lots that were acquired under the city’s urban renewal program when a company expressed interest in a lot owned by St. Stephen’s Episcopal Church. A member of the church explained to Montgomery that the property had been purchased from the city. City Real Estate Administrator Kirk Bjorling eventually concluded that the conditions had been met. But the episode piqued Montgomery’s interest as to whether there were any other vacant lots that had been sold under urban renewal and not redeveloped.

“What it is we’re looking at is a holistic approach for the area bordered by MLK and 52,” Montgomery said last week. “Looking at how we work, to do that you have to have possession of property to create something that you can market. If [the city doesn’t] have ownership, you can help an organization like SG Atkins that’s doing community work.”

Montgomery added that SG Atkins is among the most successful community development corporations in the city, with a track record of leveraging 10 private dollars for every public dollar it receives.

Over a nine-month period, from October 2010 through July 2011, city staff researched hundreds of files in storage covering about four decades. Bjorling told Montgomery that they found numerous instances in which the buyers duly improved properties purchased from the city under urban renewal, but only one other instance in which the buyer failed to comply with the conditions of the sale. That was William and Martha Carpenter, who bought a vacant lot from the city on West 27th Street across from Goodwill Industries in 1993. Bjorling told Assistant City Manager Derwick Paige that the city had lost the contract with the Carpenters, making it difficult to enforce the conditions.

With renewed attention on the languishing Burke properties in 2010, staff renewed long-dormant efforts to enforce the terms of the contract.

Bjorling wrote to Judge Burke in October 2010, warning that there would be consequences for his failure to redevelop the properties and asking him to state his intentions for fulfilling the terms of the contract.

Judge Burke responded by mail on Dec. 20, reiterating his plans to construct an office building on the Lawrence Street site, adding that the property at the Fifth Street site were too small to build a house. “Therefore,” he concluded, “the contract’s conditions propose an impossibility.”

City staff disagreed. Inspections Director Charles Norton stated in an e-mail to Bjorling that “the property could be developed as a single-family dwelling and probably some of the other uses given the amount of buildable area that exists for the property.”

In February 2011, Bjorling drafted a follow-up letter to Judge Burke.

“Due to your failure to abide by the conditions of the contract in a timely manner, you are now in default and violation of the obligations of the contract,” the draft letter read. The letter set a new deadline in early 2012 for Burke to break ground, concluding, “If at the end of this extension the default has not been cured, the city may choose to exercise its rights to re-enter and take possession of the properties described above and terminate the estate previously conveyed.”

City Manager Lee Garrity gave Bjorling approval to send out the letter on Feb. 25, but at 4:59 p.m. at the culmination of a round of e-mails for the day Bjorling said he wanted to wait a couple weeks until staff had identified the other property owner who had failed to meet the requirements of improving an urban renewal property.

“We will definitely send out the other letter before we send the letter to Todd Burke so that there is at least one other person being notified along with him,” Bjorling told Assistant City Manager Derwick Paige.

In fact, it would be another five months before staff finished researching the other property, which turned out to be owned by the Carpenters, and Bjorling again asked if it was okay to send the letter to Judge Burke.

“He has asked me several times about sending this letter,” Paige told Garrity in an e-mail. “I’ve said yes each time. I think he fears retaliation but has no choice. Do you want it sent?”

Asked why he thought the city’s real estate administrator might fear retaliation, Paige told YES! Weekly: “You know what it was. There was political concern.”

Garrity volunteered to sign his name to the letter, which was eventually sent to Burke.

“If I had a preference, I would prefer that this letter not go out under my name for obvious reasons,” Bjorling told Paige. “I appreciate your and Lee’s sensitivity.”

Garrity said political favoritism played absolutely no role in the delay.

“We did not have any conversation with the mayor pro tem whatsoever,” he said.

Garrity added, “I’ll treat everybody the same, whether it’s a council member or judge or the first person we talk to. That’s my job to make sure that we do that. Down the line, employees get concerned about shutting off a water account if a council member doesn’t pay their bill. I have no problem doing it.”

Mayor Pro Tem Vivian Burke, who owns a handful of rental properties in East Winston, said last week that her son’s failure to redevelop the properties “has nothing to do with me.” She brushed aside questions by saying, “If you were intelligent, you would know that that happened years ago.”

The new Feb. 28, 2012 deadline for Judge Burke to break ground came and went without notice from the city. Since then, the city has vacillated between attempting the release the deed and trying to enforce the contract.

Garrity deferred questions about the city’s position on the matter to City Attorney Angela Carmon.

“The property owner is an attorney,” Garrity said, “so the attorney is having conversations with the city attorney.”

Garrity added, “She said that because the redevelopment plan has expired, it’s likely that we don’t have the authority to enforce the contract. If we were to take the property back we would still have to pay fair-market value for it.”

Carmon said she spoke to Judge Burke two or three times, and that the most recent conversation occurred more than 18 months ago, which would have been prior to July 2012.

Judge Burke declined to comment for this story.

In August 2012, Bjorling and Housing Development Administrator Mellin Parker prepared a request for council action to release the restrictions against urban renewal properties.

“The land use and other restrictive provisions for certain urban renewal projects which were adopted by the city council have now expired,” the action request form read. “It is appropriate that city council now officially release these redevelopment restrictions since they are no longer in effect.”

The request didn’t go anywhere, but a similar initiative surfaced in August 2013.

Assistant City Attorney Deron K. Henry requested a meeting with Bjorling and Paige to discuss a request by William Carpenter to lift the requirement that he redevelop the West 27th Street urban renewal property. Henry identified Carmon as the author of the proposal in his e-mail, writing, “Ideally what Angela envisions is having a resolution brought before city council whereby authority is granted so that staff may act on these and provide releases required as they pop up.”

A meeting was scheduled for Aug. 27 in the city manager’s small conference room. Carmon, Henry, Paige, Bjorling and Parker were asked to attend.

Carmon downplayed the apparent contradiction between, on one hand, attempting through correspondence to compel Burke to meet the conditions of his redevelopment contract, and, on the other, pursuing legislative action through city council to release the judge from the conditions.

“I have discussed with staff various options, the challenges associated with each and the likelihood of success/failure,” she said in an e-mail to YES! Weekly. “Again such conversations are based on an attorney-client relationship and are not appropriate for public discussion. Without revealing the content of the aforementioned discussion and waiving the attorney-client privilege, I think it is clear that the expired redevelopment plan is one of those associated challenges.

“Regardless of whether one attempts to ‘reclaim’ the subject properties through a negotiated purchase/repurchase or some other method,” she added, “I am certain compensation for the properties will be the primary focus [of] any discussion regarding such.”

Montgomery said he doesn’t buy the argument that the expiration of the redevelopment plan handcuffs the city’s effort to enforce compliance.

“If truly at the expiration of the plan that the contract expired too, then there shouldn’t be a need for the city to release the contract,” he told YES! Weekly. “The restrictions would have terminated automatically. That’s not the case. That would lead one to say that’s not the original intent of the program itself.”

A close reading of the deed confirms that the sale is subject to restrictions outlined in the redevelopment plan, which expired in 1989. Similar to a zoning document, the redevelopment plan outlines permitted uses, minimum lot sizes for different building types, regulation of signs, paving of driveways and other matters such as the keeping of livestock. The deed goes on to say that the sale is also subject to the terms of the contract with respect to the nature of improvements agreed upon and the timeframe for their completion. In other words, the requirement to redevelop stands apart from the land-use regulations set forth in the redevelopment plan.

The Martin Luther King Overlay District standards, which replaced the East Winston Urban Renewal Project No. 3 redevelopment plan two decades later, impose new regulations on the location of buildings, setbacks, entrances, signage and parking — geared towards promoting pedestrian orientation.

City council considered a request submitted by staff to release Judge Burke and the Carpenters from their deed restrictions, and authorizing the city manager to release the deed restrictions of any other derelict urban renewal properties that might surface in late October 2013. The resolution prepared for council stated that the action had been recommended by the general government and finance committees.

Councilman Dan Besse, who chaired the general government committee at the time, said he didn’t remember seeing the item on the committee’s agenda. Assistant City Manager Greg Turner said the inclusion of the reference must have been an error on staff’s part.

And the finance committee didn’t even meet in advance of the full council meeting that month because now-retired Councilwoman Wanda Merschel, then the chair of committee, had canceled it for health reasons. The action request form indicated that the item was “forwarded to council” based on “committee action” by finance on Oct. 21, while noting that the meeting had been canceled.

“The practice of our council members is they can cancel their committee meetings,” City Manager Lee Garrity said. “The committee members can still get their committee book and review the items, and it can be sent on to the full council.”

On a motion by Councilman Montgomery, the council voted unanimously to remand the request back to the finance committee. Mayor Pro Tem Vivian Burke was recused from the vote.

On Jan. 13, the finance committee heard a request to release the Carpenters, who are reportedly entertaining an offer from a prospective buyer, from the conditions of their contract to improve the vacant on West 27th Street. The request to release Judge Burke from his obligations had been stripped out of the item. City Attorney Carmon advised the committee members that the action on behalf of the Carpenters would not set a precedent for other property owners.

The Carpenters paid $2,500 for the property in 1993. Today it is valued at $30,700 on the county tax rolls – appreciating 12-fold.

For the most part, council members appear to be pleased about the impending sale. After all, the whole point of the conditions on the contract was to ensure that something would be built on the vacant lot, and now something finally is.

“Way back when I was a child that lot has basically been vacant across the street,” said North Ward Councilwoman Denise D. Adams, who represents the area, during the committee meeting. “And over the past few years we’ve used it for parking for the fair or other bigger events, and I’m just happy to see something go on that lot at that intersection.”

Montgomery said he reluctantly supported the motion to release the property from the redevelopment requirements. He said the Carpenters’ situation is somewhat different because there’s currently not a redevelopment plan in place for the area where their property is located. That’s arguably not the case for the Burke properties, which are covered by the MLK Overlay District.

Meanwhile, the city changed course yet again on the Burke properties.

A letter from Kirk Bjorling dated Jan. 10 reminded Judge Burke that he had committed to constructing an office building on the Lawrence Street site and that the inspections department had rejected his assertion that he could not build a residence on the Fifth Street site. The letter excised language about “violation” and “default,” but Bjorling reminded Burke that “the city may choose to exercise its right to re-enter and take possession of the properties.” He added, “The determination has now been made by the city that it would like to reclaim the above property, but we would like to discuss with you how this can be accomplished in a manner agreeable to both you and the city.”

There’s a political truism that nothing gets done in Washington. But prior to Councilman Montgomery’s involvement, the last time there was documented correspondence between city of Winston-Salem staff and Logan Todd Burke about the redevelopment properties was during President Clinton’s first term.

Senior Real Estate Agent John Butner informed Burke in a March 1994 letter that another developer had indicated interest in buying the properties.

“Please advise your plans and schedule for developing the properties,” Butner wrote. “Your response will be considered as we move to resolve this matter.”

Butner’s letter was carbon-copied to future Winston-Salem Mayor Allen Joines, then an assistant city manager.

Burke responded the following month that plans to redevelop the tracts were “still moving forward,” with a local bank and “food chain” interested in the Fifth Street property. He added that he wasn’t ruling out an office building at the Lawrence Street site — a plan that he had already committed to through plans filed with the city. Ignoring the timetable for improvements spelled out in the contract, Judge Burke closed, “At this time, I am not able to advise you of a schedule for developing the properties, but will remain in contact.”

Joines said if the city had received active overtures from developers, staff would have taken action to reclaim the properties.

“Because the city didn’t have a particular use [for the properties], the city didn’t move forward,” Joines said. “I know I can say I never received any political pressure.”

At least one person took an interest in the Lawrence Street property. Ed McCarter had operated Special Occasions bookstore on the southwest corner of Lawrence Street and Martin Luther King Jr. Drive since 1989. He recently sold it to Forsyth Seafood so the restaurant and fish market could expand its parking lot. McCarter moved across the street to a building he rents from Vivian Burke.

In the early 1990s, he entertained the idea of expanding his investments on Martin Luther King Jr. Drive.

“I inquired about it because I thought it might be good to own other properties in the area,” he said. “I figured it would be a good area to develop retail. And I would be close by so I could keep an eye on it.”

McCarter said he recalls placing a phone call to City Hall to inquire about the property, adding, “And then I just didn’t hear anything about it.”

McCarter, who sells African-American books and memorabilia, raised a question: “When was it supposed to be developed?”

Followed by, “When was the property purchased?”

Carefully considering the answers, he concluded, “It looks like somebody laid down on the job, doesn’t it?”

Councilman Derwin Montgomery takes a similar view.

“We dropped the ball,” he said. “I don’t blame the property owners. They didn’t comply with the terms of the contract, but it was the city’s responsibility to enforce it.”

Timeline

1969 East Winston Urban Renewal Project No. 3 is adopted by the Winston-Salem Board of Aldermen.

1988 The Winston-Salem Board of Aldermen authorizes the sale of two properties on Martin Luther King Jr. Drive to Logan Todd Burke.

1990 Burke finalizes the purchase of the properties.

1994 The city notifies Burke that another developer is interested in the properties and asks him to outline his plans. Burke responds that he can’t provide a schedule for construction.

2010 Councilman Derwin Montgomery inquires about the Burke properties. The city warns Burke that there will be consequences if he fails to follow through on his committments. Burke responds that one of the lots is too small to build a house, as he had previously committed.

2011 The city insists to Burke that the property is big enough to build a house, informs him that he is “in default and violation of the oblgigations of the contract,” and warns that the city will take possession of the properties if he does not cure the default.

2013 A proposal by city staff to release the properties owned by Burke from deed restrictions is remanded by city council to the finance committee for further review.

2014 The city tells Burke it would like to reclaim the properties, while dropping language about a “default” and “violation,” adding, “We would like to discuss with you how this can be accomplished in a manner agreeable to both you and the city.”

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