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NEWPORT NEWS — More than 20 years year ago, the city began scooping up chunks of land in King William County with the plan of building a reservoir that would help provide drinking water for the region.
It was ambitious, costly and never should have happened — based on the flawed projection that the region didn’t have enough water for future growth. The $289 million project fell apart in 2009, but not until the city spent about $51 million and acquired nearly 1,500 acres of land. And now, Newport News has begun selling off the property, for a fraction of what it paid.
“The project was absolutely wrong,” Councilwoman Pat Woodbury said. “It was a completely made-up thing that said we needed all this extra water and because of that, we bought that land for a great deal more than we’re getting back.”
Newport News Waterworks, the city-owned regional supplier of drinking water, began campaigning to build the reservoir in 1984. The plan was to build a 12.2-billion-gallon reservoir in King William to hold as much water as the company’s existing five reservoirs.
Former Newport News Mayor Joe Frank, who was elected in 1996, championed the project when the city started buying land, though most of the city council was behind it, too.
The Sierra Club branded Frank as “Public Enemy No. 1″ and accused him of disregarding laws designed to protect the Chesapeake Bay, according to archives.
At the time, officials believed the project was necessary based on a 1984 U.S. Army Corps of Engineers forecast that anticipated that the area would use 68 million gallons of water daily in 2010 and 84.69 million gallons a day by 2040, according to Daily Press archives.
By the time the project ended in 2009, officials realized that the demand for water in the region was less than it had been in the late 1990s, according to waterworks director Yann Le Gouellec.
The region’s actual use — 34.87 million gallons a day — is about half of what the Army Corps projected it would be in 2010, according to the water provider’s most recent figure.
Le Gouellec attributed the change in water demand to a number of factors, including an increased awareness of water consumption, recycling water and water-saving devices such as low-flow toilets.
Frank often argued that the Peninsula needed the water the reservoir would provide, and accused opponents of the project of using emotional appeals and spreading misinformation, according to previous Daily Press reports.
Opponents, meanwhile, had their own studies that challenged claims that the Peninsula needed more water. They often cited a Sierra Club study that found the studies the project was based on wildly overestimated future demand for water, according to a 1997 Daily Press article.
Waterworks purchased the land — 1,462 acres — during the late 1990s and early 2000s, about 60 miles northwest of Newport News. The total price tag: $8.3 million.
The agency currently serves more than 400,000 people in Hampton, Newport News, Poquoson, York County and part of James City County.
The reservoir project fell apart after a federal judge ruled the Army Corps had acted “acted arbitrarily and capriciously” and shouldn’t have issued the permit because there wasn’t enough evidence that the proposed reservoir was the least damaging way to address water concerns, according to Daily Press archives.
Environmentalists said it would have destroyed 21 miles of free-flowing streams and 403 acres of wetlands, the most by any project in Virginia since the Clean Water Act was enacted in the 1970s, according to the archives.
The judge also cited changes to water need projections, which had decreased between 1997 and 2005.
“I want you — the citizens — to know that we really took a shellacking on this thing and it is really a shame it was ever even (a project),” Woodbury said. “It was just a few people who wanted it, but that’s why we need people active in our government — to keep things like this from happening.”
In the years that followed, the city has not used the bulk of the land for anything, according to city spokeswoman Kim Lee. Portions of two parcels were leased to local farmers but the rest has been vacant. Newport News also maintains some walking trails that existed before the city bought it.
For years, there was little to no interest in the land. Many of the parcels are landlocked, which means buyers would not have guaranteed access to them without arrangements with surrounding property owners, or have terrain unsuitable for development.
Waterworks and the city decided to try to sell it now because of the rising costs of maintaining the property — and hired a real estate company to help unload most of the land, Lee said. The hope was there would be more buyers with the boom in the real estate market.
“Not only are we avoiding thousands of dollars and thousands of miles a year to go up and maintain properties for which we have no use,” said Ron Harris, the city’s natural resources manager. “We’re eliminating that cost and we’re also using the funds generated from the land sales to pay for our other important infrastructure.”
So far this year, the city has sold 664 of the 1,462 acres — for $849,481. It spent about $3.1 million on the same land years ago.
“I’m not as concerned about whether we recuperate what we lost because I didn’t make the decision to buy it — it was before I got here,” Councilwoman Sharon Scott said. “They were buying it for a purpose, so they were doing land acquisition based on what they needed.”
Much of the land is steep and irregular with large ravines, which made it ideal for a reservoir but not much else, Le Gouellec said. Waterworks bought it with the intention to submerge the land under water to create the reservoir.
Waterworks needed to buy all of the land in the area to move forward with the reservoir, and it needed to purchase wetland mitigation sites to offset the environmental impacts, Le Gouellec said. Sellers knew waterworks needed the land, so they were able to charge top dollar.
Only one of 21 parcels has been sold for more than what the city paid for it.
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The council recently received an offer to sell a nearly 188-acre tract but was divided on whether to sell. The $756,870 offer was almost double what the city had paid for the land, but past appraisals left some of the council members believing they could get more. And they heard there were other interested buyers.
So two council members voted against it, meaning the deal couldn’t go through.
Most of the land that Newport News purchased for the reservoir project was owned by King William County. After the project ended, King William had the option to return money to Newport News in exchange for the land or leave the city to deal with the land.
It chose the latter. There was little market for the land, and the county made a lot of money selling it, Woodbury said.
“It was a huge loss,” Woodbury said. “What can we do with land up in King William County?”
More than two decades later, Newport News is still trying to answer to that question.
Jessica Nolte, 757-912-1675, jnolte@dailypress.com