AG says he can’t probe alleged Smithfield Town Council ‘conflicts’ on Luter project

Published 12:39 pm Wednesday, April 6, 2022

Editor’s note: This story has been updated to clarify Attorney General Jason Miyares’ position that his office has no authority to investigate alleged conflicts of interest among Smithfield’s Town Council and staff.

Virginia Attorney General Jason Miyares has no authority to probe into the controversy over a proposed mixed-use development at the western edge of Smithfield’s historic district, a letter from his office contends.

Isle of Wight Commonwealth’s Attorney Georgette Phillips, however, hasn’t said whether she’ll begin her own investigation.

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Smithfield resident Mark Gay, representing a preservation group, wrote to Miyares on Feb. 21 requesting an “immediate investigation” into alleged conflicts of interest among Smithfield Town Council members and Town Attorney William Riddick III concerning the “Grange at 10Main” development former Smithfield Foods Chairman Joseph W. Luter III and his son, Joseph W. Luter IV, plan to build on 50-plus acres at Route 10 and Main Street.

Gay then wrote to Phillips on March 9 asking that she “work with the citizens of Smithfield to remove conflicted Council members and/or Town Staff.”

The elder Luter acquired the land in 2020 before razing the former Little’s Supermarket and a 1730s farmhouse known as Pierceville. Riddick represented Luter in both sales.

In his letter to Miyares, Gay stated he was writing “on behalf of several hundred local residents.” He signed it as executive director of Preserve Smithfield Inc., a nonprofit organization formed from community opposition in 2015 to a previous developer’s plans for Pierceville.

The Luters’ proposed $100 million development would consist of a 13,300-square-foot permanent farmers market, three- and four-story apartment buildings with a total of 225 units, 45 single-family homes and duplexes, a hotel, 33,350 square feet of commercial space and more than 1,000 parking spaces.

Smithfield Town Councilman Randy Pack disclosed in January that he planned to become involved in running the restaurant and possibly the hotel, and said he’d recuse himself from voting on the matter in his capacity as a councilman or as the council’s liaison to the town’s Planning Commission. Riddick, however, denied having any continued relationship with either Luter.

“I have no relationship with them at all — none,” Riddick had said during a Jan. 27 Town Council meeting with the Isle of Wight County Board of Supervisors.

The special meeting had been called to discuss Luter III’s offer of land and $1 million toward the farmers market building if the town and county could jointly raise another $2.7 million.

According to State Corporation Commission records, Riddick filed paperwork as recently as Dec. 27 to change the address of ROSF LLC, a company he’d created in 2006, to Luter IV at 19259 Farm Road.

The Farm Road address was listed as the address for LSMP LLC, the company Riddick created for Luter III to purchase the Little’s and Pierceville properties, on a Virginia Department of Elections report showing LSMP had made a $1 million contribution to Gov. Glenn Youngkin’s campaign in October. Luter IV, speaking to the Times in January, denied making the $1 million donation and confirmed he knew the identity of the donor but was “not at liberty” to disclose that person’s name, nor comment on the donation.

“We request an advisory opinion, if not restraining action,” Gay wrote in his letter to Miyares.

Stephanie Hamlett, special counsel to Miyares, replied to Gay’s letter on Feb. 25, denying both requests.

The attorney general may issue opinions “only when requested to do so by certain state and local officials,” she writes, while local government conflicts of interest would be “within the purview of the Commonwealth’s Attorney” for Isle of Wight County.

Gay’s letter to Miyares had specifically accused Town Council members and Riddick of violating the Hobbs Act of 1946, a federal anti-extortion statute.

According to the U.S. Justice Department’s website, the Hobbs Act was created to combat racketeering — the act of creating a problem for the purpose of solving it for a price — but the statute is also frequently used in connection with cases involving public corruption. To prove a violation of the Hobbs Act, the government must show a public official has obtained a payment to which he or she was not entitled, knowing that the payment was made in return for official acts.

“A violation of the Hobbs Act of 1946, if any, would be a matter for the Federal Bureau of Investigation as it is a federal crime,” Hamlett writes.

Gay then wrote to Phillips that Riddick’s “demonstrated behavior and declarative statements show he is behaving less an advisor to Town Council, giving legal counsel where necessary and requested, and more like someone who works for the project developer.”

When Riddick and Tammie Clary, the town’s director of planning and community development, had proposed an ordinance change in December to replace Smithfield’s unused “planned corporate office and research” zoning option with “planned mixed-use development,” or PMUD, the town’s Planning Commission had initially voted to table the matter indefinitely so that it could not be used to advance Luter’s development plans.

According to Pack, it was Riddick and Clary who’d pushed for the matter to come back on the Planning Commission’s Feb. 8 meeting agenda.

Riddick and Clary had initially presented the PMUD option as a means of creating a denser, more walkable South Church Street corridor, a goal the commissioners are considering in their ongoing process of revising the town’s comprehensive plan. At the Feb. 8 meeting, Pack and Riddick acknowledged the Luters would likely use it to move their project forward.

“Now, we have a property owner who wants and needs this,” Riddick had said, “and so the question is, does that make it the wrong thing to do?”

Without a PMUD zoning option, Riddick argued, the Luters would likely never be able to make a formal application for their proposed development.

The Planning Commission has yet to take any vote on the proposed PMUD zoning, and the Luters have yet to apply for rezoning or permits for their “Grange” development.

Riddick, after receiving copies of Gay’s letters, said the town would “welcome any investigation that might be forthcoming.”

“All discussions about this proposed development to date have been held in open meetings and in accordance with state law,” Riddick said. “I am confident that no member of the Town Council or Town Staff, including myself, has acted inappropriately or illegally.”