Legal wrangle over land leased to sports complex continues

MIDDLETOWN — Debate over who controls nearly 320 acres of Town of Middletown-owned land leased to private investors to develop a now-struggling sports complex continues Monday in Federal Bankruptcy Court.

Town representatives and Delaware Sports Complex LLC ownership appeared in bankruptcy court Friday to make their cases, and a second hearing was scheduled for next week. The initial session lasted approximately six hours before time ran out with more witnesses scheduled.

While DSC owner/manager Daniel Watson contends a Chapter 11 bankruptcy filing is designed to reorganize and move forward with a development plan, the town maintains it terminated a lease before that due to a lack of progress and financial woes.

In a separate lease agreement, Mr. Watson controls a town-owned tract near the proposed DSC in which construction on a golf course, clubhouse and swimming pool at the St. Annes development are ongoing. He bought out the interests of original DSC owners who planned to manage the facilities.

Middletown officials contend that the supposed eviction notice ended any ties the DSC had to the land on Levels Road near U.S. 301 and the Maryland border, which Mr. Watson disputes.

Scheduled to testify Monday in Wilmington are Middletown Mayor Kenneth L. Branner Jr,, Town Manager Morris Deputy and Director of Public Works Wayne Kersey.
Mayor Branner and Mr. Watson both declined comment Wednesday.

Mr. Watson testified at Friday’s hearing, and the town presented two Delaware Department of Transportation representatives to confirm a traffic study and other requirements for the project.

Attorney for the town and DSC are reportedly expected to meet before Monday’s meeting as negotiations continue.

The terms detailed

A 99-year-lease between the town and sports complex backers charging $1 annually was executed on Feb. 24, 2016, which followed municipal approval of a site plan in August 2015 and authorization of construction on Sept. 29, 2015, according to court papers.

The town declared ownership was in default of the lease on March 17, citing stalled construction and financial debts accrued. Mr. Watson declared the eviction as “groundless” and the matter was stayed upon the DSC filing for bankruptcy on May 23.

In its bankruptcy notice, the DSC listed nearly $1.6 million in debt claims to 13 creditors, including $195,000 supposedly owed to the Town of Middletown.

Nichols Nursery of Newark claims it is due $811,337 from the DSC, according to papers, while Van Cleef Engineers of Hillsborough, New Jersey has a claim for $205,483.

In the lease agreement, the town mistakenly included Charles M. Price Memorial Park in the tract to be developed by the DSC. According to the DSC in court documents, the land represents about 45 percent of the leased space.

Mr. Watson acquired the DSC interests on March 1 and “he became aware that various contractors and engineers were asserting that they held claims against the (DSC) for work done either fully or partially before” he took control, according to the bankruptcy filing.

Reach staff writer Craig Anderson at canderson@newszap.com

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