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Oct 09, 2023

Oatlands Sues National Trust Over Financial Support

Oatlands Inc. CEO Caleb M. Schutz stands on the porch of the Oatlands mansion. A

Oatlands Inc. CEO Caleb M. Schutz stands on the porch of the Oatlands mansion.

A four-decade-old partnership governing the stewardship of the historic Oatlands property south of Leesburg is in jeopardy after the nonprofit that manages the former plantation filed suit against the National Trust for Historic Preservation, which owns the real estate and controls the endowment established to ensure its upkeep.

Oatlands Inc. last month filed a seven-count breach of contract lawsuit in Loudoun County Circuit Court alleging the Trust has improperly restricted the nonprofit from accessing funds intended for its use and obstructed other initiatives that could generate income for the property. The case this week was transferred to Federal District Court.

The Trust issued a statement saying it has concerns that the local organization "is not fully meeting its responsibility to properly support and manage" the property.

Oatlands was established in 1798 by George Carter, who operated a farm, mills, and vineyard on nearly 2,000 acres. By the 1860s, the operations were supported by more than 100 enslaved people. After the Civil War, in 1903, the property was acquired by William Corcoran Eustis. His heirs donated Oatlands—400 acres including a Greek Revival mansion—to the National Trust in 1965, along with a $500,000 endowment for its upkeep.

Since 1979, locally controlled Oatlands, Inc. has managed the property under a co-stewardship agreement with the Trust.

The lawsuit cites frictions between the two partners starting four years ago. Oatlands Inc. in 2014 purchased the adjacent Oatlands Hamlet property with the goal of protecting the viewshed from development. By 2019, Oatlands was struggling to pay the mortgage on the purchase and agreed to deed the land to the Trust. According to the lawsuit, the Trust then used part of the Oatlands endowment—$1.35 million from a fund established by a gift of A.V. Symington in 2004—to pay off the note.

Oatlands Inc. CEO Caleb M. Schutz points to water and mold damage in the basement of the Oatlands mansion, resulting from a leaking roof.

As part of that transaction, according to the suit, the Trust agreed to place a conservation easement over the Oatlands property, a transaction expected to generate about $2 million in revenue from the sale of tax credits to add to the endowment. However, it was later discovered that because the Trust was an easement holder on other properties, it was ineligible to sell the tax credits.

Oatland Inc. also claims that the Trust "wrongfully and arbitrarily" reduced the nonprofit's annual draw from the endowment, which typically had been 5% of the balance but has fallen as low as 3.5%, according to the lawsuit.

The nonprofit claims it has suffered approximately $3 million in damages as a result of those actions, while investing $175,000 of its own funds on maintenance and restoration and drawing down its own reserves by up to $200,000 per year.

Caleb M. Schutz, who took over as Oatlands' CEO in 2018, said the Trust's actions, the impacts of the pandemic closures, and costly maintenance projects have stressed the nonprofit's operations. The historic tourism site is down to one staff member other than himself. Also, he said unreasonable Trust restrictions have made it more difficult to complete important repairs, including that a donor's offer to replace the mansion's leaking roof fell through when the Trust required a substantially more expensive copper roof. Today, the nonprofit said $2.5 million is needed for repairs on the property, including $1.5 million for the roof replacement, mold remediation, and repair to the wooden balustrades that provide a safety guardrail on the mansion's front lawn, according to the lawsuit.

Schutz said his efforts to resolve the concerns over the past several years have been met with inaction by Trust leaders. He said he hopes that the lawsuit will lead to more constructive talks or result in a court order that forces a more equitable treatment.

The statement published by the Trust cites concerns about the local organization's stewardship of the National Historic Landmark Property and its fundraising capabilities.

Oatlands Inc. CEO Caleb M. Schutz said repairs to the balustrades on the front lawn of the manor house remain undone because of disputes with the National Trust for Historic Preservation of the materials that may be used.

"Over the past year, the National Trust has become concerned that Oatlands, Inc. is not fully meeting its responsibility to properly support and manage this National Historic Landmark. We have communicated these concerns to the leadership of Oatlands, Inc. consistently and provided specific steps to address these issues collaboratively. However, Oatlands, Inc. has chosen to file a lawsuit rather than work with us in the best interests of this important historic place," according to the statement.

Specifically, the Trust denies it owes additional funding or property rights to Oatlands Inc. and stated it has worked to resolve the concerns through and open and productive relationship with the nonprofit. "The National Trust has engaged in consistent good faith efforts to find a path forward with Oatlands, Inc. on disputed issues and has told Oatlands, Inc. that it would like to focus attention on resolution, with the assistance of a qualified mediator if needed. Unfortunately, Oatlands, Inc. has not agreed to this path forward, choosing litigation instead," it stated.

"The National Trust's highest and greatest concern is for the perpetual protection of Oatlands, which serves the Loudoun County community in a number of ways and is an important part of the history of the United States and Virginia. … We remain devoted to its preservation and interpretation for the benefit of the public, and we are deeply saddened that Oatlands, Inc. has chosen this course of action. We urge Oatlands, Inc. to work with us as partners, not opposing litigants, for the benefit of this wonderful historic property," according to the statement.

It appears Oatlands Inc. could be on the chopping block by the National Trust. The owns Oatlands and can sell it or hire another historic property management firm.

Agreed. Else why would they refuse to give Oatlands the customary 5% and then fault them for not making repairs? Really, this is unbelievable.

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