Mathews supervisors plan to seek advice from the county attorney on ways to help the Islander Restaurant on Gwynn’s Island become operational once again.
The board held a special work session after Tuesday’s monthly meeting. County Building Official Jamie Wilks has been criticized by contractor Dave Jones for not issuing a permit to allow Debbie Gibson and Preston Jenkins, who own the Islander along with other family members, to proceed with renovations there.
According to Wilks, the permit request was denied because of conflicts with the National Flood Plain Insurance Program, so floodplain program manager Charley Banks and floodplain program planner Gina DiCicco of the Virginia Department of Conservation and Recreation were present to share information and answer questions about the permitting process.
County Administrator Mindy Conner said that supervisors held the meeting so they could work through issues in a transparent manner.
The county’s position
Wilks said that it’s always been the county’s position that it wants to see the Islander reopen, but that requirements of the state building code and the floodplain ordinance have to be met. He said that the county goes through the same process for everyone who seeks a permit. He also said it’s important to abide by the floodplain ordinance so that Mathews homeowners can continue to have flood insurance under the National Flood Insurance Program.
The Islander is three feet below base flood elevation, said Wilks, and the value of the work proposed exceeds 50 percent of the Mathews Commissioner of the Revenue’s assessed value of the property. This triggers a requirement that the structure must come in compliance with the state building code and the flood ordinance, he said, and the structure would have to be elevated.
Mathews has the bare minimum flood ordinance in order to be approved by FEMA to have flood insurance, said Wilks, and if a building doesn’t meet those requirements, the building code and ordinance prevent him from issuing a permit.
Property owners’ arguments
Speaking on behalf of the building’s owners, Jones argued that the county is basing its decision on the current assessed value of the Islander, which he said is $9,000, rather than the $1.5 million assessed on the structure in 2003, before storms damaged it. This makes repairs impossible without elevation of the structure, he said, because the 50 percent threshold is reached at just $4,500. He said it would cost nearly $1 million to elevate the building. Because the floodplain ordinance defines “substantial damage” as damage whereby the cost of restoring the structure to its before-damaged condition would equal or exceed 50 percent of the value of the building before the damage occurred, Jones argued the county should use the 2003 assessment of the property as its basis for value. He claimed that using the 2003 assessment would mean that the owners could do nearly $750,000 worth of repairs before the 50 percent rule would be triggered.
Jones also argued that the county had established a value for the Islander by establishing a value in a contract with Mac Casale for the building that now houses the Hole in the Wall restaurant. That restaurant is also on Gwynn’s Island, close to the Islander, he said, which makes it comparable to the Islander in value.
The contract places the value of Hole in the Wall at $126,100, he said, arguing that, at 1,260 square feet, its value would be around $100 a square foot at a time when the building was in a state of disrepair. Applying that value to the 17,699-square-foot Islander, he suggested, would make the structure worth $1.77 million. Using that value would enable the owners to perform up to $865,781 in repairs, he said, adding that he is seeking a permit for just $291,000 worth of repairs. He said that an appraisal shouldn’t be needed for the property because the Hole in the Wall contract substantiated the Islander’s market value. In addition, he said, the Islander has a $600,000 insurance policy on it based on 17,000 square feet and he was baffled at why the assessment was just $9,000. Jones asked the board to allow him to proceed with repairs.
Discussion of the issues
Banks, the NFPIP floodplain program manager, told the board that market value is used to determine substantial damage or substantial improvement under FEMA. Since most localities find it hard to determine market value, he said, they use the county’s assessment instead. FEMA allows that as long as every structure is evaluated the same way, he said. Therefore, using market value or appraisal for one structure and assessed value for another “won’t stand up.” He said he didn’t think that an insurance policy could be used to determine the value of the building.
Supervisor Pepper Love read from the Mathews ordinance, which states that market value should be determined by the most current appraisal available and, if that’s not available, by the most current county tax assessment.
Wilks said that the owners submitted the commissioner of the revenue’s assessment to be used, but if they could submit an appraisal that showed something different, “we could use that.”
Banks explained further that once substantial damage has been determined to have occurred to a building, the repairs to the structure automatically fall into “substantial improvement,” which means that the repairs must comply with current codes.
Conner asked if the county could do as Jones asked and use either the value of the Islander before it was damaged or the value of another property—the Hole in the Wall—to determine the Islander’s market value.
“We’re trying to find a path for writing this permit,” said Conner, “so the question of the value is kind of the first thing we need to answer.”
DiCicco said that, because the ordinance doesn’t provide a time limit, the substantial damage definition could possibly be used, but it would still trigger the substantial improvement component, and the building would still have to be brought up to current code.
Banks said that if the application were for improvements that were less than market value, there would be no requirement for the structure to come up to current code and a third-party appraisal could be used. But Conner said the county can’t compel an appraisal.
Love said he had asked two contractors, the Phoenix Corporation and W.M. Jordan Company, to determine the value of the Islander, and he had been given values of $1.83 million and $1.17 million, respectively. He said an engineer had certified that the building is sound and that he trusted the assessments and would feel comfortable approving the permit immediately based on them.
Dubois suggested that there seemed to be some flexibility in determining the value of the building. Other options discussed included asking the commissioner of the revenue to request that the court allow him to give the property a different value, having the county hire its own appraiser or having the board itself place a value on the building, or using the insurance policy coverage as an appraisal, but none was deemed viable. One suggestion that Banks said was possible, but frowned upon by FEMA, was having the owner pursue a number of smaller jobs and incrementally completing the renovations.
The board also discussed whether the building would be exempt if it were an historic structure, but Conner said the county still had to deal with the value question. Banks said if it were an historic structure and elevating it would destroy its historic significance, the owners could apply for a variance.
Accepting a value that is not an appropriate appraisal could cause the county to lose its NFPIP insurance status, said DiCicco, or it could open up the county to a lawsuit down the road. Love still said he thought the board should issue a permit for the project, but Conner said the board has a responsibility to every citizen in the county.
“We cannot go down a path where we could potentially jeopardize our participation in the flood plain program,” she said. “We have to be able to have flood insurance.”
Conner said that the board should talk with an attorney for legal advice and that she would schedule a meeting soon. With that, the board adjourned.