Winery, Borough Settlement Draws Thirty Residents to Public Hearing

WEST CAPE MAY – Calling “distasteful” a $550,000 settlement between the borough and owner of Willow Creek Winery may have been the only thing about 30 at a June 22 hearing may have agreed upon. The reasons varied as more than a dozen spoke out to consider the borough’s borrowing of $300,000 to pay the settlement. 
About 30 attended, causing the commissioners to move it from the caucus room to a larger venue. “We usually have one reporter or no one in the audience,” Mayor Pam Kaithern said at the beginning of the meeting.
The hearing was required because the borough needs to pass a $300,000 bond to pay for its portion of the settlement reached with winery owner Barbara Wilde in a federal civil rights lawsuit she brought against the borough. The settlement resolves all claims between them without admission of fault or liability.
The ordinance was approved by Commissioners Peter Burke and Carol Sabo. Kaithern abstained from voting.
She was named in the lawsuit with the borough, according to borough Solicitor Frank Corrado.
Wilde filed a complaint against Kaithern with the New Jersey State Ethics Commission, noting that Kaithern lives within 200 feet of the winery and should have recused herself from any proceeding or actions against the winery.
The lawsuit also alleged that Kaithern routinely performs marriage ceremonies throughout West Cape May and Cape May on properties owned by the winery’s competitor, and attempted to thwart Wilde’s efforts to open the business by insisting on an inordinate number of inspections before opening.
Wilde believed her rights to due process and equal protection under the law were violated by the borough; both are protected under the 14th Amendment to the U.S. Constitution.
Kaithern said the borough’s insurance company paid $275,000 of the settlement, and the borough needed to cover $280,000. Half of the settlement was to be paid within 30 days from the time of the agreement, and the remainder by the end of July.
The insurance company also provided and paid for the borough’s defense attorney. Kaithern and Corrado both claimed they did not know how much that amount was. Burke said the insurance carrier “demanded” the borough settle.
“It will be difficult for the borough to absorb the entire cost,” Kaithern noted, “so we are asking to spread repayment over five years.” The borough’s annual budget is about $2.3 million.
Based on an average home assessment of $438,000, the bond could cost West Cape May taxpayers an additional $61.78 annually for the next five years, according to the mayor.
“We’ll go through the budget process and see if we can offset it with savings or other funding in some areas,” she said.”We are trying to make it as easy a pill to swallow as possible.”
Corrado explained at the hearing’s onset that mediation was an alternate dispute resolution. The borough faced the risk of a jury trial on a portion of the lawsuit.
The borough was faced with a decision whether to litigate the case or try to settle it through mediation. “If we went to trial and lost even on one factor, we would have been found liable and would have had to pay for legal fees,” he said. “They could easily have cost half a million dollars. The borough had to decide which was more prudent.”
The lawsuit was filed in October 2012 for $1.9 million. It was scheduled for trial Sept. 27. The parties agreed to mediation by retired New Jersey Superior Court Judge Michael Winkelstein.
Settlement also included an additional $10,000 the borough had to pay Wilde to settle an Open Public Records Act (OPRA) case.
“It is a lot of money,” Sabo said, “sadly, not to the people who were litigating.” Sabo was not on the board when the suit was filed. “I was one of the last ones to agree to mediation because I thought we did absolutely nothing wrong. It is an absolutely distasteful outcome.”
One speaker during the hearing, Gary Hawthorn, questioned whether the “denial of due process” alleged by Wilde in her lawsuit was the mayor’s decision.
“The fact that you settled for that amount of money indicated you denied due process. The size of the settlement seems to indicate the borough was very wrong. Is there any way to stop this from happening in the future? Can the public be involved before the decision is made to litigate?” he said.
Kaithern referred responses to Corrado, who stressed the settlement did not include any admission of fault or liability.
She noted, however, that the “democratic process allows for people to sue” so there was not any way to prevent it.
Another speaker, Dave Cicchitti, said while the “borough claims to be pro-farm,” he claimed he was facing “similar problems” to those by Wilde with his farm.
“To be in this position with a farm, to have to settle like this, shouldn’t something have been done at the beginning to prevent this and encourage farms here?” he said.
Corrado said the case “was not about the farm, but about how the winery was using the land under the Right-to-Farm Act. The dispute was whether as a farm, they could conduct weddings and special events there. That wasn’t clarified until legislation was amended that it was allowed under certain conditions.”
Cicchitti also asked if instead of agreeing to a settlement, the borough could have dropped the winery’s property taxes for a period of time. “We discussed this, and it was rejected,” Sabo said, “but not by us. I thought it was a great idea and very community-minded. But they already get the farmland tax rate which is very low.”
Another speaker, Jim Malley, asked the board if the winery was one of the top ten employers and taxpayers in West Cape May.
“According to the winery they are,” Burke said. None of the commissioners said they knew without checking.
“There are eight vineyards in the county now, and one day, the farmlands here in West Cape May could be another vineyard,” Malley said. “I would think the board would want business to come to West Cape May and be successful. It doesn’t appear to be the case when the winery applied for its permits. Will the board also review its code enforcement procedures and make adjustments in light of what’s happened?”
Corrado said the borough received code enforcement services from Lower Township. “We’ve been reviewing processes since the borough was sued and will continue to do so.”
When asked if building permit delays were going to be reviewed because of the claims in the lawsuit, Corrado said, “Those were allegations in the lawsuit, not fact. The borough denies it happens.”
When asked what projects might not happen because of the settlement, Kaithern said many of the borough’s projects are funded through grants, without tax dollars, and they would continue to seek grants and other funding sources for needed projects. “Roughly 25 percent of our taxes stay in West Cape May, the rest go to the county and the schools,” she noted.
“We are always looking for ways to reduce our property taxes,” the mayor said. “We don’t have to spend all of the bond if we don’t need it all.”
Kaithern said the interest rate, while “very small,” would be set in the fall.
John Francis, another speaker, “applauded the commissioners for settling. We all know a good mediation means both parties walk away unhappy. I wish we could have (fore)seen that it would cost so much. I’m glad it is done, but I won’t pretend to be happy to pay more taxes.”
Another speaker, Hilary Pritchard, said she was “sad” that Kaithern and the board had to go through this litigation process.
“You have been so frugal,” she said addressing Kaithern. “For 15 years you have protected this borough and have done what we have put you in office to do. She (Wilde) didn’t have to sue; she could have sat down with her neighbors to try and resolve this.”
Two others who addressed the hearing said they “shared” in the commissioners’ frustration. “I challenge anyone in this room to do a better job than Pam (Kaithern),” Christina Isenhart said about the mayor.
“I’ve lived in this town since 1988 when it was a wild town, and just about anything went,” said Barbara Hoepp. “You’ve cleaned it up. I trust you and know you. I’m 62 years old and don’t want an increase in my taxes, but you did the right thing. I’m sorry that we have a neighbor who did not want to work it out with the other neighbors.”
Kaithern said she tried “not to take the lawsuit personally, but it was difficult. For 15 or 16 years, I’ve been on this board and tried to do the right things. We are striving to have everyone play by the same rules. If the rules change, then things change, but we are trying to keep an equal-level field.
“We were recommended to protect the borough by staying quiet and not feed into the press or social media,” she continued. “Just remember there are two sides to all stories.”
Winery Farm Director Kevin Celli said he was “So glad to see so many people in the audience. We are happy this is over, and we are moving to a new chapter. It’s been difficult for us to be slammed in the papers, accused of stealing taxpayer money, hearing the payment (called) distasteful.
“We tried to sit down to discuss the issues, but then we found out you were on a mission,” he continued. “Have any of you been to the winery? So many people are against the farm and winery because of all the rumors that have been spread. We’ve had more harassment than anyone I know. And interestingly, a farm went up next door to us in six weeks without any problems.
“We have been so upset by this,” Celli noted. “This could be a great year-round destination to benefit the community if we all work together. We pay a lot of taxes, we employ a lot of people, we bring tourism to the area. We run a beautiful operation. I hope we can move forward and clear the chapter and have a better tomorrow.
“I extend my hand, and my doors are open,” he told the commissioners. “I hope we have your support.”
None of the commissioners indicated they had been to the winery. Burke said once the lawsuit was filed, he didn’t think it was right to go to the winery.
To contact Karen Knight, email kknight@cmcherald.com.