Fort Dupont Delaware

Illegal Sale of Protected Open Space Land

Summary

This narrative includes multiple links as well as information from confidential sources.

In 2014, HB 310, sponsored by House Majority Leader Valerie Longhurst and then Senate Majority Leader Nicole Poore, created the Fort Dupont Redevelopment and Preservation Corporation (FDRPC). FDRPC was placed within DNREC and is essentially a state agency.

In October 2021, FDRPC sold the 128-acre Grassdale parcel of Fort Dupont State Park to the Blue Water Development Corporation for development as an RV Campground for 422 vehicles. The price was $3.5 million which will be paid in stages. The first stage requires FDRPC to make some infrastructure improvements which it has planned and budgeted. There has been no public announcement of this sale.

DNREC and FDRPC maintain that their grant of authority under the FDRP Act gives them the power to sell protected land. However, other provisions of the enabling legislation along with Title 7 and Title 30 provide 10 reasons why the Grassdale sale is illegal and should be reversed as presented on this webpage. 

Minutes of the March 2021 meeting include the FDRPC Board’s passage of a motion to amend the Bluewater Development Agreement with language that would indemnify Blue Water’s title company against legal fees with a cap not to exceed $100,000. This amendment demonstrates a lack of confidence in the FDRPC grant of authority.

A July 22, 2020 memorandum from Max Walton (FDRPC Counsel) to members of the FDRPC Board reveals that both Council and Board were unaware that Grassdale was purchased with Delaware Land and Water Conservation Funds.

This is an extraordinary admission. Max Walton authored an early draft of the FDRPC enabling legislation and had engaged in this project for many years. Protecting public land is the mission of DNREC staff, and they understand the extensive legislative protections of Grassdale. This page of the DNREC website shows Grassdale as currently Open Space Land.

Grassdale was not included in the original Master Plan for Fort Dupont. Based on a FOIA response, no due diligence was exercised in selecting Blue Water to develop the RV Campground. FDRPC sold 128 acres of State Park Land without getting a single competing bid.

I. Many Laws Ignored

DNREC Secretary Shawn Garvin and the FDRPC Board claim the power to sell public land citing one paragraph in the FDRPC Act which states:

(2) Act generally in a planning and development capacity, and in connection therewith, to hold, own, preserve, develop, improve, construct, rent, lease, sell, or otherwise acquire or dispose of any real property, including without limitation any real property comprising the Fort DuPont Complex or any portion thereof transferred to the Corporation.

Title 7 Chapter 47 Subchapter II § 4735 (2)

These are sweeping powers. However, other language in the Act provides significant limitations regarding the sale of public land. One provision states:

The Fort DuPont Complex will remain a public destination, with its historic, natural, and recreational resources maintained for public enjoyment.

Title 7 Chapter 47 Subchapter II § 4731 (3)a

Of course, Blue Water campgrounds are private. No one involved in this transaction claims that there would be “public enjoyment” of this RV Campgrounds.

Another provision requires that, on or before June 30, 2015:

Perform or have performed such tests, studies, examinations, and evaluations upon the lands of the Fort DuPont Complex as may be desirable or necessary to permit such property to be transferred to the Corporation…

Title 7 Chapter 47 Subchapter II § 4737 (2)

This language clarifies that the legislation did not automatically transfer Fort Dupont to the FDRPC pending this requirement. There is no documentation that this “Duty” of FDRPC was ever undertaken or completed. 

Perhaps one of the attorneys in the Markell administration did some review and concluded that the legal protections could not be removed. In any case, the FDRPC Board has continued to forge ahead with the Grassdale sale while ignoring the extensive protections of the Open Space program.

Activists in Delaware City, led by Erica Lindsey, gathered 3,926 signatures to save Fort Dupont State Park. There were 45,759 visits to their webpage. These advocates maintain that this public land is protected by multiple statutes and cannot be converted to private use without a specific act of the Delaware General Assembly. Delaware State Park Land has never been converted without a specific bill passed by the General Assembly. 

II. History of Grassdale

John Finnegan’s plan was to build a horse training/exercise track  on his Grassdale property. He started construction of this facility, but some filling of wetlands was required, and DNREC prevented him from continuing. With few options, John Finnegan sold Grassdale to the State.

The State purchased Grassdale in 1994 from Mr. Finnegan for $860,000. The Deed stated:

The said lands and premises are being acquired through the Delaware Land Protection Act, Title 7 Del. Chapter 75, and any conversion of use is subject to this statute as well as to the regulation and manual of the Delaware Land and Water Conservation Trust Fund. 

John Finnegan Deed

The legislative intent expressed in Delaware Land Protection Act seems very clear. This Act uses the word “permanent” 34 times and “conservation” 13 times. There is no provision for “conversion” to private unprotected status. Grassdale has been Protected Open Space land for almost 30 years.

In March 2016, the State sold Grassdale to FDRPC for $10.00. The deed stated, “ALL SUBJECT, however, to all enforceable covenants, conditions, easements, reservations, restrictions and limitations of record…” This webpage documents that Grassdale remains protected under DNREC’s Open Space program. Grassdale is the purple triangle west of Route 9 and north of the canal.

DNREC’s latest five-year (2016-2020) report on Delaware’s Open Space Program includes Grassdale in the map on page 4. Ironically, on page 2 the report defines the state’s role in the Open Space program as follows:

The state’s role is to make sure that the restrictions described in the easement are actually carried out through annual monitoring and if necessary, to take legal action to enforce the easement.

DNREC’s mission is to protect Open Space land—not to sell protected land to a private developer.

III. FDRPC and Blue Water

In the fall of 2012, DNREC, in cooperation with Delaware City, initiated an ambitious master planning process for the reuse and redevelopment of Fort DuPont. Sasaki Associates was retained by DNREC as lead consultant for the Master Plan.

The 2013 Master Plan published by DNREC focused “on reuse and redevelopment strategies for the portion of the Fort DuPont Complex located northeast of Route 9.”  The Grassdale parcel was not included in the Sasaki Master Plan. On page 7, the Master Plan area is outlined in orange. Grassdale is the triangular area outlined in green west of Route 9. You can still see the outline of John Finnegan’s exercise track on this map.It was five years later that the Grassdale parcel emerged as a business opportunity for FDRPC. A FOIA dated 10/22/2021 requested:

All documents related to the RFP and any and all bids/proposals received which resulted in FDRPC’s selection of Blue Water Development Corporation to own and operate an RV Campground in the Grassdale area of the former Fort Dupont State Park.

The response to this FOIA stated that, “Note that there was no RFP; rather, the process began with an unsolicited offer. With this letter, on behalf of the FDRPC, I enclose the responsive document.”  However, the “responsive document” is not “an unsolicited offer” but a four-page Letter of Intent dated 10/22/2018 between FDRPC and Blue Water. The introduction states:

The purpose of this Letter of Intent (“Letter”) is to set forth the most important terms and conditions (see below) of a proposed transaction concerning the Lease of certain real estate (the “Property”) as described herein. The parties acknowledge and agree the proposed transaction shall not be binding on either Lessor or Lessee until a more detailed mutually acceptable “Ground Lease” containing the terms set forth in this Letter is negotiated and executed by the parties.  This Letter and the terms thereof are confidential and shall not be disclosed by either party to any person other than their attorney or agents engaged in this transaction.

The origins of this Letter of Intent were clarified through another FOIA requesting:

Any and all documents which led to the selection of Christopher J. Castagno as a real estate agent for the Fort Dupont Redevelopment and Preservation Corporation. These documents could include an RFP, proposals and bids submitted, reports of interviews with real estate agents and any documents presenting the rational for selecting Mr. Castagno.

The response to this FOIA stated, “Note that there was no RFP or other request. Rather, Mr. Castagno’s firm has been retained on a non-exclusive basis. With this letter, on behalf of the FDRCP, I enclose the only responsive document.”

The “responsive document” is a Memorandum of Understanding (MOU) between FDRCP and Mr. Castagno which includes the following commission schedule for “Sale of Land for Development”.

5% of the first million dollars
4% of the second million dollars
3% of the third million dollars
2% of the fourth million dollars
1% of everything thereafter (above $4 million)

“Notwithstanding the foregoing, FDRPC recognizes Chris Castagno as a representative of FDRPC, reporting to Jeffery D. Randol, Executive Director of FDRPC, for purposes of the activities contemplated hereunder.”

These documents clarify that the Blue Water Letter of Intent was not an “unsolicited offer”. One of the primary “activities contemplated’ between Mr. Randol and Mr. Castagno was negotiation of the Letter of Intent with Blue Water.  A purchase price of $3.5 million would yield a $130,000 commission for Mr. Castagno.

So, the Blue Water agreement started with the hiring of Mr. Castagno in March 2018, which resulted in the October 2018 Letter of Intent. Three years later, in October 2021, the sales agreement was finalized with Blue Water.

Based on the FOIA responses, no due diligence was exercised either in hiring Mr. Castagno or in negotiating with Blue Water. Title 7 Chapter 45 §4506 states:

Any public land sold shall be sold only at public auction after at least 10 days prior public notice. Such public notice shall be given in all 3 counties of this State. Notice in each county shall be given in the same manner required for county tax sales in each respective county, including publication and posting of handbills. Any land so sold shall be sold only to the highest bidder at the sale for the amount of that highest bid.

None of this was done. FDRPC sold 128 acres of State Park Land without getting a single competing bid.

As an aside, FightDECorruption.com, has filed complaints against Mr. Castagno with both the Public Integrity Commission and DOJ for a Conflict of Interest. He was representing the Trustees of the New Castle Common as a real estate agent while serving as a Trustee.

IV. Max Walton Memo

This raises the question of how so many people could ignore so many laws for so long. A July 22, 2020 memorandum from Max Walton (FDRPC Counsel) to members of the FDRPC Board sheds some light on this issue.  Mr. Walton states that protesters at a Delaware City Council meeting prompted a News Journal reporter to write a story about Grassdale:

In the course of writing that story, the reporter forwarded to Jeff (Jeffrey Randol, Executive Director of FDRPC) some previously unknown information yesterday indicating that the Grassdale property was purchased with funds under the Delaware Land Preservation Act, Title 7, Chapter 75, and questioned how this parcel can be developed. Upon receipt of this information, we performed some preliminary investigation yesterday afternoon, and the reporter seems to be correct in her assertion that the property was purchased with Land Preservation Act funds.

The memo indicates that the FDRPC Counsel and Board were unaware that Grassdale was protected as Open Space land as late as July 2020. This is six years following passage of the FDRP Act and more than three years after Shawn Garvin’s appointment as Secretary of DNREC.

This represents an extraordinary level of unawareness. Grassdale has been protected since acquisition in 1994. In his memo, Max Walton states that this was missed because these protections were not “carried forward into the current deed when the property was transferred to the Corporation.”  However, all these protections were strongly reinforced in the 2016 Deed which is linked above.

Anyone curious about this protected land could consult either the DNREC website or the DNREC five year 2016-2020 report on Delaware’s Open Space Program both of which show that the Grassdale parcel remains protected under the Open Space program.

Mr. Walton’s memo states, “there is an argument to be made that the Corporation’s grant of authority supersedes the Land Preservation Act.”  However, the memo continues, when Jeff Randol consulted with DNREC’s award winning Director of Parks, Raymond Bivins, he learned that protected public land had never been privatized except by a specific act of the General Assembly as required by Titles 7 and 30 which are cited in points 5 and 6 of  this webpage.

The Walton memo quotes extensively “pertinent provisions of the Blue Water agreement of sale regarding title state” concluding “if the Blue Water deal does not move forward, depending on the mechanism, the Corporation may face claims of liability and there may be downstream consequences.”

Instead of openly confronting these legal hurdles, the FDRPC Board has continued to stonewall during the 16 months since Mr. Walton sent his memo. His memo concludes with a plea for confidentiality and instructions on how to avoid FOIA. Following the distribution of this memo, the FDRPC Board started meeting in Executive Session to discuss Grassdale.

Minutes of the March 2021 meeting include the FDRPC Board’s passage of a motion to amend the Bluewater Development Agreement with language that would indemnify Blue Water’s title company against legal fees with a cap not to exceed $100,000. This amendment demonstrates a lack of confidence in the FDRPC grant of authority.

One sign of major FDRPC loose ends is Majority Leader Longhurst’s decision to remove Delaware City from her District as part of the redistricting process. Normally, such large appropriations for a small town would be a political plus, but it hasn’t worked out that way for Longhurst and Delaware City.