Thursday, July 24, 2008

Slowing Sales and Environmental Issues Force Closure of Grey Rock

It has been more than three years since Land Resource, LLC began selling land in Grey Rock, the company's Western North Carolina mountain slope development. Grey Rock at Lake Lure received national publicity through the 2006 HGTV home giveaway promotion. Today the Dream Home is the only structure completed on the 3,917 acre site although more than 400 lots have been sold. Grey Rock lots were priced from $200-700 thousand.

John Boyle reported in his July 11, 2008 Asheville Citizen-Times article “Dream Home developer closes” that the Grey Rock operation has been closed indefinitely. Mike Flaskey, chief executive officer for Land Resource, LLC stated in the interview with Mr. Boyle that the company had “well in excess of $50 million” invested in Grey Rock alone, and would reopen sales when the economy picks back up. “We’ve been left with no choice but to shut down several of our communities. We’ve shut down five of our communities including two in Western North Carolina.”

Location and History of Grey Rock

Grey Rock at Lake Lure is located in the mountainous region of Rutherford County. This area shares the same geologic hazards as the rest of Western North Carolina. The North Carolina Geological Survey has reported landslides in the county and the 1997 Rutherford County Soil Survey determined that the soil composition on the majority of the mountain slopes was “unsuitable” or “poorly suited” for urban development.

Land Resource, LLC hosted Grey Rock’s grand opening on April 28, 2005. On September 21, 2005 the North Carolina Department of Environment and Natural Resources found that the developer had repeatedly violated erosion control regulations. The state halted all construction from September 21, 2005 through February 16, 2006 and fined the company approximately $94,000.

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.”

Land Resource, LLC

Land Resource, LLC, currently headquartered in Orlando, Florida was founded by J. Robert Ward in 1997. The company was based in Atlanta until mid 2007. 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. Projects under development are:

Bridge Pointe at Jekyll Sound-Waverly, Georgia
Cumberland Harbour-St. Mary’s Georgia
The Docks at Caney Creek-Kingston, Tennessee
Grey Rock at Lake Lure-Lake Lure, North Carolina
Laird Pointe-Panama City Florida
Roaring River-Fayetteville, West Virginia
Still Water Coves-Lincolnton, Georgia
The Villages at Norris Lake-LaFollette, Tennessee
Wild Ridges-Marion, North Carolina
The websites for these projects are currently inoperable.

Grey Rock and the Interstate Land Sales Full Disclosure Act

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 their purchase contracts and three years to seek damages. For additional information concerning consumer rights and protections please contact the United States Department of Housing and Urban Development.


jblank said...

I purchased a lot in Stillwater cove, and received my property report nearly 1 month after closing. In addition to that, the property report was nearly 2 years old. However, since Land Resource Group went into Bankruptcy only 6-7 months after I closed on my lot, I have not been able to do anything. The 2 years were up this past Feb. Who would I contact to seek damages since the developer is no longer in business?

R&L said...

Only a lawyer can answer your