Fennell family won't sell: Cincinnati Enquirer — Northern Kentucky Edition, 5/28/06

Newport group faces threat of losing its land

By Mike Rutledge

For nine years, the family of William Fennell Sr. has lived with fear the Transit Authority of Northern Kentucky [TANK] might take its one-acre-plus of prime downtown property for a bus-transfer station at the northeast corner of Fourth and York streets.

Several years after TANK told the family eminent domain was being considered, TANK and Campbell County filed a lawsuit in early 2001 to take the property for the transit center.

"The overall idea is very similar to what we've done in Covington," TANK spokeswoman Gina Douthat said this week. "To create a place for people that are transferring routes, or collecting people from the entertainment district and from the downtown area of Newport so they can consolidate stops," and to allow "a safe and easy change of buses."

The family's lawyers long have argued the transit center was merely a ruse to capture the land for other development.

The land, directly across the street from the World Peace Bell, includes nine buildings on 15 parcels housing several businesses, including companies that rent space.

The family's Challenger Piping fabricates and installs industrial piping systems. Another firm, BIF Inc., is an equipment and real-estate holding company.

The land also includes the historic 1800s Dickerson-Fennell building at 7 E. Fourth St., listed on Preservation Kentucky's 2006 "Most Endangered" list.

" 'It's not for sale' is what my father typically states," said Bill Fennell Jr., a member of the family's fourth generation that owns the cluster of businesses. "And then, I don't think they can afford it."

In 2003, then-Campbell Circuit Judge William J. Wehr agreed that TANK couldn't afford it. He dismissed the case then, ruling that TANK lacked the money to afford the property - which the transit agency was shocked earlier that year to learn had tripled in value within two years, to $11.9 million, according to a court-ordered appraisal.

When Wehr made his ruling, TANK faced financial troubles. Those troubles are gone, its lawyers argued in March.

"There is no financial difficulty with TANK," they wrote. "TANK began the fiscal year of July 1, 2005, through June 30, 2006, with a $6.6 million reserve. Likewise, TANK has no long-term debt and the power to issue long-term bonds, if necessary, for capital expenditures."

Furthermore, "Campbell County has pledged $1 million towards the project in addition to its annual TANK subsidy," TANK attorneys had written.

The litigation is back in Campbell Circuit Court, before Judge Julie Reinhardt Ward, because the Kentucky Court of Appeals later decided 2-1 that Wehr should have conducted a hearing before his decision.

In 2002, lawyers for the family filed internal memos from the Millennium Monument Co., including a 1997 document in which company representative Ray Beil wrote that Newport's city manager would contact BIF Inc. about selling to the monument company.

If that didn't work, "then we would need to build a public park or something dedicated to the public so the property could be purchased through eminent domain," the memo stated.

In March 1999, Beil wrote a letter to Campbell County Judge-executive Steve Pendery, with copies to Newport and TANK. Because Campbell County Fiscal Court had shown willingness to work with TANK to use eminent domain a week earlier, Beil wrote, the Millennium Monument Co. would install the World Peace Bell nearby in the see-through structure that now houses it.

The transit center "seems like a ludicrous idea to me," said Bill Fennell Jr., brother of Newport City Commissioner Beth Fennell, who in recent years has not voted on eminent-domain issues to avoid perceived conflicts of interest because of her family's litigation.

But "the No. 1 reason" the family is not surrendering, Bill Fennell Jr. said, is: "It's been in our family for over 100 years and property rights are sacred to some, as well as us.... When and if the time comes, we would probably want to do something ourselves, if it would make sense. Why should the developers make all the money?"

The family has spent more than $400,000 in legal fees and lost a lot of sleep, he said. Douthat did not reveal how much TANK has spent on legal fees.

The Fennells aren't alone in opposing the location, which could require the moving or razing of the Dickerson-Fennell building.

The Newport Historic Preservation Commission and the city's Citizens Advisory Council both approved resolutions opposing the site in March.

"There are other possible locations ... that would not require the demolition of historic structures, or the dislocation of businesses," according to the advisory council resolution.

Meanwhile, "The Newport Historic Preservation Commission urges TANK to take measures that avoid such demolition, including exploration of other existing potential location alternatives," its resolution states.

Although TANK's board of directors in January 2001 announced it had agreed to move the building farther east along Fourth Street, several current and former board members testified in 2002 it might have to be razed for the project.

"I don't know how it won't fall apart (while being moved), then-board member Jack Kinsella testified.

Douthat in February said TANK still planned to move the building.

In August 2003, Federal Transit Administration Regional Administrator Joel Ettinger informed TANK it had failed to conduct a required federal review process for historic buildings before filing the eminent domain lawsuit.

For that reason, federal funds could not be used, he wrote.

"If TANK intends to use federal funds for the project, then it must have the lawsuit dismissed," Ettinger wrote. "Alternatively, the project can be fully funded with only local funds."

TANK has said it could not afford do the project using strictly local money.

Both sides have spent most of this year filing court documents, questioning each others' motives and truthfulness. After months of filings, the Fennells recently were granted permission to inspect new TANK documents and conduct new interviews of witnesses.

TANK lawyers have argued the family has merely been trying to increase the selling price.

Bill Fennell Jr. said TANK never tried to negotiate.

"The only contact we've really had from TANK, it was a single phone call, and they threatened eminent domain in that phone call," he said. "That's no way to treat a private, taxpaying entity or citizen. That was back in the early stages."

It's been tough on the family, he said. "You're not in control of your destiny. You can't make intelligent long-term decisions. Nine years, that's a long time."

Cincinnati Enquirer: http://news.nky.com

Note: The following are comments made to Eminent Domain Watch by Brian Fennell (rockstar1960@netzero.net), son of the owner of the property in question.
[The article in the Enquirer] attempts to represent both sides of the issue. The facts of the case are much more sinister. It involves some pretty heavy hitters (political and corporate) in the Greater Cincinnati area the paper is treading softly.

My father, William Fennell Sr., was approached by a fellow contractor who had become an investment player in the Newport, KY landscape. He had started a project called the Millennium Monument Project that was supposed to coincide with the turn of the century. The plan was/is to level the entire block where my father is the primary owner and then use the property to develop as he saw fit.

My father has several businesses and rents the property to others as well and said he was not interested in selling. This is when the investor then started the process of greasing the wheels of public entities to take it by eminent domain under the guise of public use.

We are victims of the process. We already won under summary judgment but the ruling was sent back by the KY Appeals court (2-1) in a ruling harshly worded against TANK that said they should have been provided "their day in court". Since that time the Judge has retired and we have spent tens of thousands of dollars getting a new judge up to speed.

Our lawyers tell us the case is a slam dunk. TANK's objective is to bleed us dry by dragging the case out as long as possible. We are receiving no support from our elected officials as the investor is a big contributor to both parties and TANK is a public entity that is supported by Campbell County.

The trial has crippled my father's business' and had an extremely negative effect on his health.

Any help would be greatly appreciated.