Court records show the town of Iron Gate in Alleghany County had to mortgage its town hall in order to help pay off debt resulting from a legal settlement.
James Martin sued the town after it used eminent domain to take a portion of his property back in 2009, according to court papers.
The town used $700,000 to build a new 250,000 gallon water tank on the property.
Iron Gate mayor Alan Williams said the town council voted to take Martin's property using eminent domain because it was up against a hard deadline to use that $700K in stimulus money or lose it to Harrisonburg.
Williams explained that the council didn't know enough about the legalities involved with eminent domain when it took the vote.
Court records show the town paid Williams a total of $115,000 to settle the case.
The town mortgaged its town hall in order to help pay off some of that debt.
It also had to give back a portion of the land it took from Williams, including a road that was Williams's only access point to the property.
The town still owns the land where the water tank stands.
Martin said he was pleased with the settlement but thought it was a "waste" of taxpayer money to fight him in court.