The battle for Wheatland

Introduction

The Wheatland Manor House was built 35 years before the Revolutionary War. The farmland surrounding it served as a focal point of a small community during the Civil War and is today a symbol in a new land war, one that has spawned accusations of corruption, fraud, and deception, as developers, preservationists, and politicians wrestle over the future of historic Loudoun County, Virginia.

Set in a rural farming district of western Loudoun, the Wheatland Farms property — 549 acres in all — was, until very recently, untainted by the stunning rate of development to the east, where strip malls and tightly-clustered McMansions have overtaken tens of thousands of acres of farmland.

But now, following a bruising court battle, Wheatland is in the hands of Salvatore J. Cangiano, a colorful developer and New Jersey transplant. Cangiano negotiated a contract to sell a portion of the land to the Loudoun County Public Schools (LCPS) for what strikes many as an extraordinarily high price, given the current real estate market. The proposed sale marks the fourth time in recent years that the LCPS has undertaken a land purchase whose location and seemingly inflated price seemed curious. And like the previous three deals, the proposed Wheatland purchase has now been scuttled by the County Board of Supervisors. The board and an increasing number of local residents — including a prominent former Reagan Administration official — are wondering just what’s going on with the school system and its land purchases. And now the U.S. Department of Education’s inspector general and the FBI are investigating as well.

Controversial deals

The tale of Wheatland Farms is more than a bit bizarre, even measured against the hothouse atmospherics that have characterized Loudoun County land development. But Wheatland Farms is a signature property, there’s no doubt about that; it includes Wheatland Manor, consisting of the circa 1741 manor house and more than 20 meticulously restored outbuildings, on about 90 acres, and the surrounding farmland, about 459 acres worth.

Wheatland Manor House is at the center of a 549-acre farm, which includes a 10-acre lake. The proposed schools were slated for 160 acres of farm property, directly north, across John Wolford Road and to the east, across Berlin Turnpike.The owner of the Wheatland property, Cangiano, 75, made his first Loudoun County land deal in 1987, and has made many since, including several involving the county government. As Cangiano has said, time and again — probably with some hyperbole — he has made “thousands” of development deals all over the country, from New Jersey to Virginia, from Florida to Hawaii.

Cangiano firmly and finally obtained Wheatland Farms in 2007 in settlement of a two-year court battle, in which he was accused of fraud and conspiracy. The former owners of Wheatland claim Cangiano, along with a local realtor, duped them into selling him the land, by submitting “a contract offer under (a) fraudulent name,” in order to prevent them from learning that the buyer was, in fact, a developer — and not, as they allegedly had been told , interested in conserving the property.

But more recently, as the real estate market soured, Cangiano agreed to sell a portion of the land to the Loudoun County Public Schools. The LCPS planned to build three new schools accommodating grades K through 12, on 160 acres of Wheatland Farms.

The proposed deal attracted a variety of critics. The farmers and residents surrounding Wheatland organized a vigorous opposition to having their bucolic community upended by 4,000 students a day — as well as faculty and staff — rumbling in and out of the area in some 85 buses and hundreds of cars. They said the schools could cause the demise of area farming by drawing too much ground water. Some suggested that along with the 77 homes Cangiano planned to build on the remaining 389 acres, the schools represented the beginning of a new town.

Protecting the rural area and the farming community are among the goals laid out in the county’s comprehensive plan, argued Barbara Lamborne, who with her husband owns Greenstone Fields less than a mile from the proposed schools’ site. “So I see it as conflicting that the county would enter into a contract to place three big schools on top of us.”

Other critics argued that the deal appeared to be a raw deal for the school system. While Cangiano paid $20 million for the 549-acre farm property, an average $36,365 an acre, at the height of the real estate boom, the county schools contracted to purchase some of it from him for roughly $62,000 an acre, in today’s depressed real estate market. The total price the schools would pay for Cangiano’s 160 acres was to be $9.925 million .

In February 2006, before Cangiano obtained the property, LCPS offered the former owners $56,000 an acre for the same tract of land. A just-completed county assessment values the proposed schools site at $27,000 an acre. Earlier negotiations to build the schools at other locations in nearby towns — one of which was eager for the project — averaged $27,000 to $40,000 per acre. Those deals collapsed, however, soon after the LCPS appointed a new chief counsel, attorney William Chapman. Chapman previously worked at the Reed Smith law firm where, among his client list, he represented Cangiano. That has caused some local activists to charge that those failed land acquisition deals were scuttled to benefit Cangiano.

Even Chapman conceded in a Feb. 18, 2009 e-mail to Cangiano’s current attorney, obtained by the Center under Virginia’s Freedom of Information Act, that “Whether or not preferential treatment was or was not provided, few would argue with the appearance of a conflict of interest here.”

Weeks later, in late March, however, Chapman wrote a confidential memo to the school board — also obtained through the Freedom of Information Act — saying he was “satisfied that my conduct is consistent with the Virginia Rules of Professional Conduct” for attorneys. Legal ethics authorities concur that Chapman’s role is not, on its face, a conflict of interest. And no evidence of any illegal acts has been presented.

Nevertheless, the problems with the LCPS land acquisition process have stirred public outrage. That outrage has been building because this is not the first time the school system’s decisions have been questioned, and ultimately nixed, by the Loudoun County Board of Supervisors:

• In May 2004, the board blocked the purchase of a Cangiano tract — 144 acres for $2.88 million — because it would have required $13 million in infrastructure improvements even before construction could begin.
• Last year, supervisors blocked an $11.5 million purchase of 174 acres, or about $66,000 an acre, from developer Randolph Rouse, telling the school system the price was too high. In that case again, the negotiated price for the property, located west of Loudoun’s suburban area, far exceeded the assessed value.
• And, late last year, the board rejected the purchase of a 99-acre site from the county’s largest land developer, Greenvest, LC, in which the schools initially agreed to pay $200,000 an acre for land that Greenvest claimed in legal pleadings was worth no more than $35,000 an acre for assessment purposes.

Boiling over

The anger and suspicion all came to a head at an April 29th community meeting with county officials. Local resident Chris Gersten exploded in anger, expressing a sentiment many would only whisper: “It’s corruption, and we all know it,” Gersten said to the crowd of about 150 people, most of them activists opposing the schools’ plans for development. “Everyone in this room knows it.”

Days later, Gersten’s wife, Linda Chavez, a popular conservative media pundit and former Reagan administration official, whose property is nearby Wheatland, wrote an open letter to Board of Supervisors Chairman Scott York, calling for an inquiry.

“While I am sympathetic to LCPS’s need to acquire land in order to build schools for the future, this contract reflects gross incompetence on the part of both the LCPS staff and the elected members of the school board that approved the purchase — or, worse, malfeasance,” Chavez wrote.

Noting her years of service “at the highest levels of government, as the head of a federal agency from 1983-1985 [staff director of the U.S. Commission on Civil Rights] and senior member of the White House staff from 1985-1986” and “14 years on the boards of directors of four major U.S. corporations, including service on the audit committees … I have never seen so deeply flawed a process, one that at the very least, squanders limited government resources and invites corruption.”

In closing, she said, “I would like to see the (Board of Supervisors) either initiate its own investigation or refer this matter to the appropriate county, state, or federal legal authority to determine whether any improper influence was exerted on LCPS staff, school board members, or other elected officials in connection with this purchase; or whether conflicts of interest existed between any LCPS staff, school board members or other elected officials and any parties to this contract.”

In the weeks since, the Board of Supervisors has taken a more activist stance. Supervisor Jim Burton, a slow-growth advocate representing the rural western segment of the county, led the successful fight to block the Wheatland purchase. As grass-roots opposition and official condemnation of the Wheatland contract grew, Cangiano made an extraordinary offer on May 15, agreeing to reduce his sale price by nearly 25 percent — to $47,500 per acre. But it was too little too late: The supervisors’ vote on May 26 was 8-to-1 — with the lone dissent coming from an ally of Cangiano’s.

A few days later, Cangiano conceded that the board’s vote made sense. “To be honest with you, there would have been quite a bit of traffic. I have no axe to grind.” And, he noted, “I didn’t go to the school board, they came to me.”

Asked about those who criticize his business style and say that there is an appearance of corruption in the Wheatland school deal, Cangiano waxed philosophic, as he frequently does: “Anybody’s entitled to say anything derogatory about anyone, including me … if I say something derogatory about someone, that reflects on me. I was taught to deal in an honest way in business and that’s what I do. People can say what they want.”

Chavez, pleased with the supervisors’ action, said she remains concerned by the LCPS. “The thing I’m most concerned about is the perception, at least, of some corruption,” she said. “The way they handled this just doesn’t pass the smell test. It looks like these deals are greased already.”

And more action may be coming. Board Chairman York, an at-large Independent, says he’s prepared to see the school system stripped of its land acquisition authority.

“I think we should take over the process,” York said, lamenting the series of school acquisition attempts that irked supervisors. “Have the schools come to us and tell us what they need, and we’ll go get it.”

Several supervisors have made similar comments.

There have been developments on other fronts as well. Two years ago, the FBI announced that a federal task force had been formed to investigate allegations of corruption in land use and development by local officials in Loudoun County and northern Virginia. In recent weeks, several local residents and county employees have confirmed to the Center that they have been interviewed by FBI or Education Department investigators regarding the Wheatland matter and other LCPS land acquisitions. The U.S. Department of Education inspector general’s office has jurisdiction over federal funds spent by local school systems. Federal officials declined to comment about their on-going investigation.