On Tuesday night, Wilmington City Council approved the second reading of a settlement with Peter Dane Koke, who has been the subject of litigation, code enforcement actions, and criminal charges due to his repeated alleged failure to keep his properties clean.
Koke has also been convicted of insurance fraud in New Hanover County, as well as felony grand theft and contracting without a license by the courts in California, where he is on the Contractors State License Board’s ‘most wanted list.’
But according to court documents, Koke claimed the city wasn’t blameless. Koke claimed that the city closed a portion of Willard Street off of South Front Street without realizing it was still actively serving his property. The closure appears to have been part of the sale of the adjoining lot — the former Optimist Park — by the city to the North Carolina State Ports Authority.
The city has not admitted wrongdoing, and a city spokesperson noted that “the dispute over the closure of Willard Street arises from a conflict in property records, which has not to date been resolved.”
Nevertheless, Koke alleged that the street closure negatively impacted him and, using the dispute as legal leverage, Koke’s attorney was able to negotiate a settlement.
Where the $2.1 million is coming from, and where it’s going
According to New Hanover County Superior Court filings, the settlement provides roughly $750,000 to purchase Koke’s property at 1536 S. Front Street — the parcel involved in the Willard Street closure debate — and an additional $250,000 to clean up the property and demolish the existing buildings.
Another $675,000 is going to purchase the property at 222 and 226 S. Front Street.
An additional property that had accrued thousands of dollars of code violations on Clover Road, initially included in negotiations, was eventually removed from negotiations and dealt with separately.
Nearly a half-million dollars will go towards paying off deeds of trust and back taxes owed by Koke so that the city can close on the properties, which it intends to do on Thursday according to interim City Attorney Meredith Everhart.
To pay for the settlement, the city is pulling $1.85 million from its economic development budget, which a city spokesperson said is appropriate for purchasing property.
The remainder of the settlement funds comes from the city’s legal budget.
Criminal charges
According to court filings, Koke was facing criminal charges from both the City of Wilmington and the Port Authority, both apparently related to code violations and nuisances.
The settlement includes language that the city would inform District Attorney Ben David’s office of its desire to drop the charges. Everhart noted in her communication with Koke’s attorney that while the city could not dismiss the charges itself, she had spoken to the prosecutor handling Koke’s case, who had agreed to dismiss the charges if the property was transferred to the city and other settlement requirements were met.
A stickier issue appeared to have been the charges filed by the Port. Again, Everhart noted that the city could not itself dismiss charges on behalf of the Port or the DA’s office, but that she believed the Port would agree to dismissal if the settlement went through and again said she’d spoken to the DA’s office about the issue.
Grady Richardson, Koke’s attorney, protested in an email to Everhart sent in early September last year.
“The language of the [Ports Authority] ‘considering’ dismissal is a non-starter. I have been very clear about this aspect of the parties’ contemplated settlement,” Richardson wrote.
While mediation did stall out at one point, it appears Koke did eventually agree to the conditional language.
“As part of the Settlement Agreement, the city agrees to confer with the District Attorney regarding two criminal violations for Illegal Dumping that pertain to these properties. A portion of the settlement would be held in trust by Mr. Koke’s attorney to clean up debris on adjacent properties, which relate to these criminal charges. While the fate of those charges is ultimately in the District Attorney’s hands, the city has agreed to use this Settlement Agreement as an opportunity to potentially remedy the situation for all parties and has spoken with the District Attorney’s office about the matter,” a city spokesperson said.
What’s next
While the city would not directly comment, paying over $2 million and helping Koke — who the city appears to believe had long flaunted the code enforcement efforts — to get out of criminal charges was likely an unpleasant pill to swallow.
But a spokesperson pointed out that the city may be able to ease that pain in the long run.
“While it is not possible to know how much the city will ultimately recoup from a future sale of these properties, it is reasonable to believe the city can realize a substantial portion of the $2.1 million settlement amount,” Jerod Patterson, the city’s communication director, told WHQR.
Patterson added that, “considering how long the city has been involved with various legal disputes with Mr. Koke, there is also value in resolving numerous legal and enforcement matters that might otherwise continue for a protracted period of time and incur their own set of costs.”
Taxpayers who are, at least for now, on the hook for settlement might ask, could this happen again? The city said that a “very specific” set of circumstances led to the negotiations, namely the disputed status of Willard Street, and that it “does not anticipate” encountering a similar situation again.
For his part, Koke was pleased with the settlement, according to his attorney.
In an email to WHQR, Richardson said the settlement “clearly holds the city accountable for their actions.” He added that he was satisfied with the proposed resolution of criminal charges, which — as he had written to the city during negotiations — he felt were unfounded.
“I am comfortable that the City attorneys previously received favorable feedback from the prosecutors and that they will exercise their best and good faith efforts. Mr. Koke has always maintained his innocence on the charges and continues to do so,” Richardson said.
