Family squabble delays Scarlet Oaks annexation

The possible annexation of a 50-acre parcel into Milton has been delayed after a lawsuit has surfaced over the property’s ownership.

The pending case in Delaware Court of Chancery led Milton Town Council to table a vote on recommendations to annex the Harbeson Road parcel, which is eyed for a 163-unit development known as Scarlet Oaks.

Council was supposed to discuss the parcel at its July 11 meeting, but Town Solicitor Seth Thompson advised officials to postpone that discussion until Monday, Aug. 1, due to the litigation. He said he was made aware of the case July 8, three days before the July 11 meeting.

The lawsuit in question was filed by Karla Draper in June 2021 against her sister, Shauna Thompson, who controls The Company Store LLC, the company that has been on town documents as the owner of the property. 

The Company Store application was recommended for annexation by the special review committee June 16, with the committee saying the parcel would provide increased revenues through taxes and fees, additional services that would sustain public works, and town control over future development. The committee also noted the annexation is within the town’s future growth area, and it can be served by existing water, fire, wastewater and police services. The only disadvantages are that the proposal has no connecting bicycle or pedestrian paths to the town center and no provision for affordable housing within the proposed design. 

But that is all on hold for the moment as ownership of the property plays out in court.

In her court filings, Draper claims she has a right of first refusal over the sale of the Scarlet Oaks property and should be allowed to negotiate the sale of the parcel. According to the correspondence from Draper’s attorney to town officials, the Company Store would sell the parcel to Maryland-based Ribera Development for the project to be developed. Should Draper prevail in court, she would purchase the property and develop it through Convergence Investments, the group that successfully annexed a 450-acre parcel on Sand Hill Road that is planned for development as The Granary at Draper Farm. Both Convergence Investments founder Colby Cox and Draper’s attorney, Katharine Mowery, said they could not publicly comment on the suit because it is pending litigation.

Draper’s lawsuit is complicated, but the basics are this: her parents, Harry and Patricia Draper Bonk, had myriad business and property holdings in Sussex County, including two parcels in Milton, one on Chestnut Street and the Scarlet Oaks property on Harbeson Road. In September 2011, Harry Bonk died, and his interests were divided up through trusts to his four children, which include Karla, Shauna and their sister, Patricia, who managed the trusts until her passing in January 2021. 

According to her court filings, not long after Patricia’s death, Draper became aware that the Company Store was seeking to sell the Scarlet Oaks property, and had exercised a partial termination of her right of first refusal to any sale. Draper alleges that when she sought documentation as to her right of first refusal and to confirm her ownership status, it was denied by the Company Store. 

In their filings, attorneys for Shauna Thompson have sought to dismiss Draper’s claims, saying the Court of Chancery lacks subject matter jurisdiction and Draper has not alleged facts that would support a judgment in her favor. 

There are no dates yet for when the litigation will be heard, as the case had been assigned to Vice Chancellor Joseph Slights, who announced his decision to retire in January, with the case to be handed down to his successor. Gov. John Carney nominated Nathan Cook to fill Slights’ seat, and he was confirmed by the state Senate June 22.