Why the delay in home building?
The Asheville Citizen-Times reported on February 18, 2007 that the North Carolina Department of Environment and Natural Resources had halted all construction in Grey Rock because of environmental degradation caused by road building. State inspectors documented erosion violations from September 21, 2005 to February 16 of 2006 and fined the developer, Land Resource, LLC approximately $94,000. In the article Janet Boyer, a regional engineer for the Land Quality section of NCDENR, stated:
They're still under a notice of violation on three sections--they're not in compliance. They're not allowed to proceed with any work until they comply with these notices. The company has not complied with ground cover requirements,re-seeding and some slope repair that needs to happen, and its work caused problems with stream sedimentation.Please see John Boyle's article "Grey Rock Development in Lake Lure Area May Finally Arrive."
On June 29, 2008, the Asheville Citizen-Times advised that a lawsuit had been filed against Land Resource, LLC. The plaintiffs, a group of 15 property owners, claim that streams on their property were damaged by Grey Rock construction practices. For additional information please refer to Nanci Bompey’s article “Grey Rock developers sued over runoff.”
Questions Not Asked
Why would a nationally known land development company repeatedly violate state erosion regulations and suffer costly shut downs? There are several possibilities.
Is liquidity an issue?
Land Resource LLC is a privately held company so most assets and liabilities are hidden. On August 2, 2007 the Orlando Business Journal reported that Land Resource, LLC obtained a $60 million revolving line of credit from KeyBank Real Estate Capital and Wachovia. The Land Resource, LLC Fact Sheet states that the company has 19 projects developed or under development.
Is Grey Rock on Stable Ground?
It is unknown whether Land Resource, LLC performed due diligence before acquiring the Grey Rock mountain tract. If their agents had checked the 1997 Rutherford County Soil Survey they would have found that the soil composition on most of the county's slopes were classified "unsuitable" or "poorly suited" for urban development.
Grey Rock and the Interstate Land Sales Full Disclosure Act
Grey Rock property owners have purchased both a private and common interest in land that is difficult and expensive to maintain. When the project is completed the Grey Rock Property Owners Association will assume financial responsibility for roads and all common areas. It should be noted that there have been recent landslides in Rutherford County, but this region is not included in the Western North Carolina "Is it Safe to Build Here?" landslide mapping program.
The North Carolina Real Estate Commission does not require land risk disclosure but federal law does for certain subdivision lot sales.
Grey Rock, HUD subdivision Id:31163, lot sales are covered under the Interstate Land Sales Full Disclosure Act and all purchasers must receive a detailed Property Report prior to signing a contract. The Property Report must include known land risks. If Land Resource, LLC neglected to provide Property Reports as required by ILSA, purchasers have two years to seek rescission of the purchase contract and three years to seek damages.
On July 10, 2008 Land Resource, LLC closed their Grey Rock sales office.