Short Pump Community Center Members Lose State Corporation Commission Fight

Members of the Short Pump Community Center have failed in their attempt to convince the State Corporation Commission to stop dissolution of the SPCC by its board of directors, but they’re likely not done fighting to save the center. In a March 19 decision, the SCC’s three commissioners ruled in favor of the SPCC’s board […]

April 11, 2010; 4:29 PM • by Tom Lappas

Members of the Short Pump Community Center have failed in their attempt to convince the State Corporation Commission to stop dissolution of the SPCC by its board of directors, but they’re likely not done fighting to save the center.

In a March 19 decision, the SCC’s three commissioners ruled in favor of the SPCC’s board of directors, denying a petition filed last October by SPCC members that sought to have the dissolution overturned. The SPCC board of directors voted Sept. 6-3 last Sept. 10 to close the center and its pool, which annually serves about several hundred members and nearly 100 children who participate on the club’s swim team.

The case pitted the three SPCC board members who voted against the dissolution – Jeffrey Bailey, Richard Rice and Deborah Knott – against the other six board members who voted for it. Bailey, Rice Knott represented SPCC members on its board, while the other six board members represented either the Short Pump Ruritan Club or the Short Pump Civic Association, the two groups that created the center in 1993.

In their petition, and during a December hearing, the SPCC members argued that the board of directors didn’t consult with its overall membership prior to the dissolution vote. They also argued that the vote was unjust, since the six board members who voted in favor of it represented the two organizations that stood to split all proceeds from the dissolution, according to the SPCC’s articles of incorporation.

SCC Hearing Examiner Howard P. Anderson, Jr. heard arguments in the case Dec. 10, then issued a case report Jan. 22 in which he sided with the SPCC’s board of directors, recommending that the dissolution be affirmed. The SPCC members, he wrote, did not have the right to vote on the issue of dissolution. He also concluded that the SCC did not have the authority to determine whether the vote represented a conflict of interest by the board members who represented the Ruritan club and civic association.

Following a period of several weeks during which both sides and other parties were permitted to submit comments about Anderson’s findings, the SCC issued its final order March 19, affirming Anderson’s positions.

Attorney Johnson Kanady, who represents the SPCC, said he was pleased with the decision. He had argued during the hearing that the SPCC board had voted to dissolve the center because its initial objective – to become a recreational facility with a permanent building – had failed.

The two founding organizations specifically designed the SPCC’s articles of incorporation so that they would always retain a controlling interest in the center that they funded, Kanady had argued.

The SCC’s ruling left attorney Jim Wilson, who represents the SPCC members, upset and confused. Wilson had requested a second hearing before the three SCC commissioners and said he was shocked that it was denied.

“We think that the SCC did not fully analyze the issue that we put before them, which is exactly why we asked to go from the hearing examiner to a full hearing,” Wilson said. “I expected that we’d be back before the entire SCC and never anticipated that they would not have granted this hearing.”

Wilson also said he was miffed at the SCC’s claim that it didn’t have the authority to determine if the vote to dissolve the SPCC constituted a conflict of interest by some board members.

“The SCC has said they don’t have the authority, which I doubt and question,” he said.

The SPCC members could appeal the SCC’s decision to the Virginia Supreme Court, but Wilson said that such a process might prove too costly for his clients. He planned to meet with them this week to determine their next step.

It is likely, however, that the group will continue its fight to save the center in Henrico Circuit Court. Wilson filed for, and received, a temporary restraining order there in February to keep the center alive pending the SCC decision, and he now expects to take the case before that court in the coming months.

Though the SPCC’s articles of incorporation mandated that a majority of the SPCC’s board be composed of representatives from its two founding organizations, the SPCC members argued that such a set-up was unjust.

They argued that they had paid memberships fees and annual dues to the organization and, as a result, should have the ability to consider any vote to dissolve the organization as a group.

Wilson said he was frustrated by the fact that the two sides hadn’t yet sat down and discussed the topic outside of a courtroom.

“When you get down to the fundamental issue here, we’re talking about a community pool and kids,” he said. “Adults ought to be able to set aside all these other issues and find resolutions that don’t harm the families and these kids.”

April 11, 2010 4:29 PM 0