Saturday, March 29, 2008

Western North Carolina Mountain Real Estate and Landslide Insurance

Question: Does your homeowners insurance policy cover landslides? The answer is no. For a professional assessment of landslide risks please read
"Western North Carolina Landslides are an Expensive Reality."

In 2005, the North Carolina Rate Bureau approved new language to clarify the confusion over natural versus man-made landslides. North Carolina homeowner policies now specify that any earth movement “caused by or resulting from human or animal forces or any act of nature” is not covered. Please see the following letters.

Edward B. Rust Jr., CEO
State Farm Insurance
1 State Farm Plaza
Bloomington, Illinois 61710

Dear Mr. Rust:

I hope that my letter and the enclosed information will persuade State Farm to advise their home insurance policyholders in Western North Carolina of the risks of buying mountain slope property.

Most people think of California when you mention landslides. They don’t associate these disasters with Western North Carolina. In September 2004, 130 landslides caused 5 deaths and destroyed 27 homes in these mountains.

In February 2005 the North Carolina General Assembly passed the Hurricane Recovery Act. Part of the bill provided funding for the North Carolina Geological Survey to begin a landslide hazard map for nineteen counties. The state has recognized the risk of slope development and the North Carolina geological staff has published extensive reports warning about the dangers of unregulated mountain development.

Currently there is little or no state supervision of mountain development. Safety ordinances and guidelines are left to local municipalities. Most local governments are not requiring geologic hazard mapping as a requirement for building permits. This lack of safety protocol poses serious personal and financial risks.

Buyers of mountain property should ask the developer for a copy of the hazard report certifying that their home is constructed on stable ground. Owners and buyers of mountain property should be advised that homeowner policies will not cover damage caused by earth movement and ground water flooding.

According to Marc Pruett, Haywood County soil and erosion control officer, “anyone with a bulldozer and backhoe can carve out homesites and roads into the mountainside. This lack of engineering is causing homes and roads to slide down the mountain throughout the county.” Mr. Pruett’s description of the effects of on going mountain slope development is true for much of Western North Carolina.

Thank you for your interest in this serious matter.


Lynne Vogel

State Farm Insurance Companies reply June 21, 2006.

Re: Your letter of May 17, 2006 to State Farm Ed Rust, Jr.

Dear Ms. Vogel:

I am a member of State Farm's corporate property & casualty insurance underwriting staff. Mr. Rust has asked me to review your letter and the information you sent with it. I commend you for your proactive work to bring a serious issue to the parties in your area and in North Carolina state government. I see among the items you sent Mr. Rust the letter from state geologist James Simons detailing the landslide mapping program now underway in western North Carolina.

State Farm is committed to doing everything we can to help the public understand hazardous conditions, the sources of damage to property, and what can be done to prevent it. In fact, we have a staff dedicated to helping people understand and know what to do to prevent damage, and I am going to share the information you provided with them. It will be helpful as we make decisions on those issues most critically needing public education and how to best allocate our resources to accomplish that education.

I encourage you to continue your efforts to bring the serious consequences of inadequate land use policy to the attention of your local and state government officials and legislators. While State Farm is committed to public education on causes of damage, your government officials are in the best position to shape land use policy to minimize the loss of life and damage to property you have highlighted.


John Shearin
Consultant, Property and Casualty Underwriting
State Farm Fire & Casualty Company

Thursday, March 27, 2008

Some Slope Problems in Laurelmor

The following is from Soil Nail Launcher, Inc.

Mr. Bob Oelberg, VP for Planning for the distinctive Ginn-Laurelmor development along the Blue Ridge Parkway near Boone, North Carolina contacted Soil Nail Launcher, Inc. with some problems. A consultant had advised that geologic conditions would not allow construction of a critical access road.

This is just what Soil Nail Launcher, Inc. likes to hear! Of course we can do it. What's the next question?

Well the next question was that Mr. Oelberg explained that traditional shotcrete facings on Super Nailed slopes were not esthetically compatible with the theme at Ginn-Laurelmor. So Al Ruckman put his creative mind to the task and developed Soil Nail Launcher, Inc.'s latest innovation, the BioWall™. The look and feel of our BioWall™ is a dramatic improvement over shotcrete on this project.

Monday, March 24, 2008

Laurelmor and Safe Slope Building Sites

Landslide Map of Watauga County compliments of the North Carolina Geological Survey

Is it safe to build in Laurelmor?

This Ginn Resort Property, a 6000 plus acre mountain residential community, was approved in 2006 before its location could be mapped for landslide hazards. The federal Western North Carolina mapping program was mandated after the region was devastated by landslides in September 2004.

Watauga County, the primary location of Laurelmor, was identified in 2006 to be at extreme risk for future landslides. Please see "Watauga Tops Landslide List."

Considering the evidence of slope failures throughout the county, Laurelmor should have been inventoried for landslides and other slope instability factors before the developer received his permit. But since the state has no regulations regarding the development of hazardous land, this project was approved.

The Laurelmor web-site provides a site plan but it does not show the resort's location on the Watauga County landslide maps. Finalized hazard maps were released in January 2008.

Laurelmor/Ginn provides a list of featured home builders for their clients. These individuals are not qualified to assess the safety and stability of the building sites. Anyone buying mountain slope property in Laurelmor should visit the North Carolina Geological Survey and take a serious look at the Watauga County landslide maps. North Carolina geologists warn that all slope property should be investigated for landslide probability. The costs for a professional site specific study are reasonable, generally less than $2,000. Caveat: Slope stability tests should only be performed by independent state licensed geologists and engineers.

Laurelmor investors should note that they will be self-insuring for all landslide property loss. Homeowner policies will not cover this peril, regardless of the cause.

Saturday, March 15, 2008

Western North Carolina Developers Permitted to Build on Hazardous Land

After experiencing decades of land development disasters, California acted in 1998 to stop the construction of homes and residential communities in identified hazardous regions. The state notified regulators and Realtors that all permits for geologically suspect land would require risk analysis: site specific proof that the proposed project would not be a danger to lives and property.

California lawmakers also established a special "buyer beware" classification for all real property sold in designated hazard areas. For the first time, interested buyers were advised of natural hazard property risks with a pre-sale "show and tell" disclosure statement. This statement provides clear warning that the purchase of land in natural hazard zones... "May limit owner's ability to develop property, obtain insurance, or to receive assistance after a disaster."

Most people are aware that California landslides are frequent, sometimes deadly, and always financially devastating. But what the public doesn't know is that Western North Carolina landslides are also common, sometimes lethal, and always financially ruinous.

North Carolina is a build anywhere state. Even though the 21 counties that comprise Western North Carolina were designated a high risk landslide region in 1998, and 15 counties were declared federal disaster areas in 2004, there are no state regulations governing hazardous land development and risk disclosure is not required.

Nationally recognized real estate development companies are taking advantage of North Carolina's industry friendly environment and are currently constructing expansive resorts on ancient landslide terrain. The following are some of the largest residential projects underway in Western North Carolina:

The Cliffs at High Carolina: 2500 acres (The Cliffs Communities)
Laurelmor: 6000 acres (Ginn Resort Property)
Balsam Mountain Preserve: 4400 acres (A Chaffin/Light Community)
Grey Rock at Lake Lure: 4000 acres (Land Resource Companies)
Bear Lake Reserve: 2100 acres (Centex Destination Properties)

By coincidence or by design these five residential/resort developments were approved before the federally mandated "Is It Safe to Build Here?" landslide mapping program could be initiated.
How many of these mountain slope communities are sitting on ancient landslide sites? This serious question can only be answered by the North Carolina Geological Survey and they were not invited to investigate the safety of these projects.

The reason for regulations.

In 1998 a massive, artificially created slope collapsed in Laguna Niguel, California. This landslide crumpled homes and caused more than $23 million in property loss. Post disaster investigation proved that construction on what should have been a "no build site" had reactivated an ancient landslide. For photographs please visit Laguna Niguel landslide.

Kite Hill is another residential neighborhood in the area that has suffered extensive landslide damage.

Slope failures continue to threaten property owners. The latest landslide damage in Laguna Niguel occurred in October 2007.

"Kite Hill residents picket builder"

Dispute: The Laguna Niguel homeowners, upset that they were not warned about unstable soil, protest at a new tract nearby.

June 14, 1998

By Joseph J. Nelson

The Orange County Register

Laguna Niguel- A portion of a new hillside housing tract opened Saturday as sign-carrying, chanting protesters issued a warning to prospective homebuyers: Check the soil reports and grading records before opening escrow.

Five Kite Hill homeowners who are suing their developer alleging defective construction and fraud picketed before the entry gates of the builder's nearby Hillcrest Estate project. They complained of cracked walls and shifting earth that have plagued them for years.

"I really wish someone had warned us about soils conditions at Kite Hill before we bought our homes," said protester Joan Leeb.

Leeb, along with her four Chat Drive neighbors, says they found out too late that the hillside on which their homes were built was unstable and reinforced in 1985 before the homes were built.

Now, they say, the hillside isn't holding up. Walls and swimming pools are cracking, concrete pylons are ripping away from divider walls, and back yards have dropped up to a foot in some places over the past two years.

The same developer, S&S Construction, is building the Hillcrest homes, priced at $500,000 and up, on land that geotechnical reports indicate is an ancient landslide deposit.

Christine Herdman, an attorney for S&S Construction, said the developer has responded to the Kite Hill homeowners' complaints and has made several repairs to each of the homes.

"It is not our practice to get into lawsuits with our customers, and we have a history of where we have gone out and (performed) repairs on homes after the 10 year statute of limitations ran out," Herdman said.

Herdman added that the developer had offered to install caissons under Roy and Ann Brown's home, which had suffered the most cracking, and to buy the house at fair market value.

The Browns said they declined the offer by S&S to install caissons after they were told by the developer that a report on the geological inspection done by an S&S contractor wasn't available. Herdman said reports can't always be provided immediately upon request.

"How are you supposed to make a decision of that magnitude when they don't have a report to provide you?" Roy Brown said.

On the advice of their attorney, Serge Tomassian, the five homeowners hired their own
geotechnical expert, David Lee, who drilled a hole 75 feet deep into the back yard of Steve and Sue Guenther's home. Lee concluded that a clay seam 40 feet below the surface was contributing to the slope's instability.

"I'm not saying the hillside could or might slide," Lee said. "I'm saying that there will be a landslide at some point in time in that area."

Herdman disagrees.

"There is agreement that movement exists on the slope," she said, "but there is a fundamental disagreement between our geotechnical experts and the homebuyers' geotechnical experts over the severity of the movement."

Geotechnical experts for S&S Construction were unavailable for comment.

Two years ago, the homeowners sued S&S Construction, alleging construction defects. In April, they amended their case to include fraud, contending the developer was aware of the slope problems and should have warned them.

"My clients want a complete repair that will last." Tomassian said. "We don't want to be reading on the front pages about this hillside collapsing a year from now."

Herdman said all slope instability problems on Chat Drive were corrected by graders before the homes were built. The company had no legal obligation to disclose the area's geological history to homeowners.

"I think it is far-reaching at this point to say that these homes are imperiled," she said. "The conditions of distress vary in each home, and we believe the matter requires further investigation."

The five homes sit side by side on an area of hillside that was determined to be unstable in a 1984 report by Leighton & Associates, a geotechnical consultant hired by the builder. The firm also was the consultant on the Hillcrest Estates project.

The hillside was buttressed, which entails cutting away a portion of the hillside and then recompacting the soil back into the cut for reinforcement.

As drivers stopped to ask protesters questions and received fliers, others shopped the new homes into the development.

Hillcrest Estates is showcasing 18 homes this week. A lottery will be conducted, and the winners who are approved for the homes will be announced Saturday. The development ultimately will have 185 homes.

Scott and Samantha Spearman, who came to Hillcrest to shop for homes with their infant daughter, said that they were surprised by the picketing.

"Honestly, it wasn't even on my mind today until I drove in here," Scott Spearman said, referring to the soils reports and ancient landslide areas within the development. "Seeing these picketers at a new development raises a red flag with me, and I'll look more carefully into buying a house up there."

Monday, March 10, 2008

Mountain Development and Safe Slope Standards

Watch where you build! Western North Carolina's mountainous terrain is hazardous: the region's mountain slopes are subject to frequent and dangerous landslides. The North Carolina Department of Emergency Management issued this prescient forecast in 1998, six years before the catastrophic slope failures of 2004.

For the past ten years developers have been gathering in Western North Carolina. Leaders of that industry came to buy a mountain or two before the federally mandated "Is it safe to build here?" landslide mapping program could be initiated and publicized.

The North Carolina General Assembly has not passed a Geologic Hazard Ordinance. The state does not provide for regulation over the development and sale of hazardous land and equally important, the state does not require landslide risk disclosure. Plainly put, mountain real estate development companies have permission to build any where they please: on unstable soils, in the path of debris flows and on existing landslides.

The following is a short list of some of the residential/resort mountain projects in Western North Carolina. All of these mountain slope communities were approved without the safeguards of mapping and site specific investigation. Mountain real estate development companies have profitable "vested" interests in their properties and even when county landslide maps show unsafe "no build" areas, they are permitted to continue construction of homes and roads in these locations.

The Cliffs at High Carolina : 2500 acres ( The Cliffs Communities)
Laurelmor: 6000 acres (Ginn Resort Property)
Balsam Mountain Preserve : 4400 acres (A Chaffin/Light Community)
Grey Rock at Lake Lure: 4000 acres (Land Resource Companies)
Bear Lake Reserve: 2100 acres (Centex Destination Properties)

It is unknown whether these 5 companies have performed due diligence for their mountain slope communities. Informational material for these resorts provide site maps but do not include landslide hazard maps. Considering the high probability of slope failures, these properties should be investigated for landslide hazards. Landslide mapping costs are reasonable, the Town of Boone was professionally mapped for $20,000.

Landslide maps are simple and easy to understand. They are colored coded to show areas of potential slope failures. Red and orange indicate questionable building sites that need to be investigated before construction begins. It should be noted that industry standards require state licensed geologists and engineers for these studies.

Even though the state has declined to provide regulation for mountain slope residential construction, this does not relieve real estate development companies from following safe slope building standards.

Wednesday, March 5, 2008

Laurelmor and Landslides

Laurelmor is one of the largest mountain slope communities ever planned for Western North Carolina. Laurelmor, a Ginn Resort Property, is located in the Blue Ridge Mountains and land for the project encompasses 6000 + acres in Watauga and Wilkes counties. The majority of the resort is situated in Watauga County. Advertising and promotional material for the project detail a golf course, 50 miles of roads, plans for 1500 ridge top and mountain slope homes and 400 condos. The Laurelmor web-site opens with music and a panoramic mountain vista. The script says "The Mountains are Forever"...

Western North Carolina mountains are not forever. In fact these ancient formations have proven to be extremely unstable building locations. Watauga County was declared a federal landslide disaster area in September 2004 and the North Carolina Geological Survey has determined that the county is at severe risk of future landslides. The January 2008 landslide probability maps show that 20% of the county is rated as high hazard and 41% of the land lies in the track of previous debris flows.

Here is a look back at landslides in Watauga County by the North Carolina Geological Survey:

Life, Death and Landslides: The August Storm Event in Watauga County, North Carolina

In August 1940, the southeastern United States experienced two major flood events. The larger of these events, the remnants of an unnamed Atlantic hurricane, affected portions of northwestern North Carolina and eastern Tennessee between August 13th and 14th. Aerial photography interpretation and fieldwork completed by the North Carolina Geological Survey documents at least 600 debris flows and slides occurring in the southeastern portion of Watauga County during this storm. Newly acquired 1940 aerial photography indicates that approximately 100 to 200 more debris flows occurred in central and southern Watauga County. The greatest concentration of debris flows occurred along the Blue Ridge Escarpment; primarily the Elk Creek reentrant in southeastern Watauga County.
Landslides claimed twelve lives, nine of those in the Stony Fork Township near Deep Gap in eastern Watauga County. Rainfall amounts were high in the area, generally ranging from 12 to 13 inches for the week, with the highest intensity rainfall occurring on the evening of August 13th. Flooding and mass movements effectively cut off major portions of the county for over two weeks. Debris flows and flooding severed a 6-mile section of U.S. 421 in 21 places between Deep Gap and Maple Springs in Wilkes County. Washouts and landslides also dissected the nascent Blue Ridge Parkway. In neighboring Caldwell County, flooding destroyed 90% of the bridges and mass movements closed many of the roads leading into Watauga County. Rescue, recovery, and relief operations for victims of the debris flows and flooding in the region were stymied and rescuers resorted to crossing difficult terrain on foot and by horse.
At that time, Watauga County was sparsely populated and largely agricultural; the U.S. Census Bureau reports 18,114 people living in the county in 1940. By 2000, the population had more than doubled (42,695), with most of the growth occurring in the last 30 years. Many areas shown on the 1940 aerial photography inundated by mass movements have since been developed due to the rapid increase in urban (~13%) and rural populations (~30%) since the 1970's. Another storm of similar magnitude would likely cause significant damage to lives, property and transportation corridors without careful land use evaluation and planning.

Rick Wooten, senior geologist with the North Carolina Geological Survey, provided the following data to Watauga County Commissioners and concerned citizens in an October 27, 2007 meeting.

Based on aerial photographs, 84 percent of the slopes [ in Watauga County] that gave way were covered by pasture or crops instead of trees. More than 130 homes have since been built in the paths of 1940 landslides and Wooten said those places would likely end up being “high hazard areas” on the state geologic map.

Additionally, 15 of the landslides that occurred during hurricanes Ivan and Frances in 2004 were at locations that also gave way in 1940. Regionally, major landslides occur about every nine years, with damaging landslides an annual occurrence. Since 2004, the number of landslides and erosion deposits in the statewide slope movement database increased from 400 to 4,500. This information was excerpted from Scott Nicholson's article, "Forum ignites interest in county plan," The Watauga Democrat, October 31, 2007.

The Ginn Company is developing and selling real estate in a clearly identified high risk landslide region. Plans for Laurelmor were approved prior to the completion of the Watauga landslide probability maps. It is unknown whether soil analyses and site specific studies are being performed for construction sites within the resort. If Laurelmor were being developed in California and in other jurisdictions, permits would be granted only after these safety investigations had been completed.

Considering the personal and financial risks, Laurelmor buyers should receive the following Natural Hazard Disclosure Statement:

Please be advised that you are buying property in a high risk hazard area and this will affect your ability to obtain insurance. Watauga County, location of Laurelmor, is in a state designated landslide district. The slope stability information provided by the federally mandated landslide mapping program was not available at the time this residential project was approved. Laurelmor is being developed under regulations that do not require site specific stability investigation.

Tuesday, March 4, 2008

"A Whopper of a Slide" — Maggie Valley, North Carolina

Copy of the Wilder Landslide Report

"A Whopper of a Slide"

by Jeff Schmerker, staff writer, The Mountaineer
September 12, 2006
Breathtaking.That's the word Marc Pruett, the county's erosion control supervisor, is using to describe a landslide which occurred late last Thursday on a steep mountainside high above Maggie Valley.

Several orders of magnitude larger than anything in recent memory, the slide, in an under-construction 700 acre subdivision tentatively called The Cascades, might be one of the largest slides ever to occur in the county as a result of development activity.

The slide measures 125 across and runs for about 1,300 linear feet, or about 650 vertical feet.

The development is owned by Maurice Wilder of Clearwater, Fla. Wilder, who flew over the site on Friday, may have been the first to actually find it, said James Guy, the project manager. Though the slide was not witnessed, workers at the site say it occurred after very heavy rain on Thursday which dumped more than 6 inches in about 12 hours. The slide occurred at the temporary end of Summit Road and took out soil, rocks, tons of mud, leaving a massive debris pile far down the mountain where the slope lessens a bit.

"If people could come around with me for a week they'd be surprised to see what's going on in these mountains," Pruett said on a tour of the slide. "This one is a stunner."

Though unusual for its size, the slide is also unusual for another reason, Pruett said: the crews blasting the rock and digging into the hillsides here, led by contractor Dennis Franklin, followed all the rules when it comes to slope development. Franklin holds a license for doing excavation work.

"Dennis is the finest grading contractor I've run across," Pruett said.

Despite that, the slide sheds light on the issues behind the county's ongoing effort to enact a landslide development ordinance.

Though it might not have prevented the slide, measures in the ordinance would have offered an extra level of protection on the mountainside. An on-site engineer or soil tester might have alerted workers that the slope was susceptible to failure, Pruett said.

"It might not have prevented it," Pruett said. "The slope development ordinance is not a fix-all, but it does offer a higher level of standards."

Normally, said Franklin, the development's roads are resting on bedrock, but this particular piece of road was constructed wider than normal to serve as a temporary parking spot for equipment. It was this area that began tumbling down the hillside, gathering momentum and ended up taking out hundreds of trees plus tons of dirt. Franklin, who brought the matter to the attention of county officials, have already seeded the slope with grass seed and erected silt barrier fences. Pruett said he might not have found out about the slide otherwise since there were no houses in its path and no residents in the area being developed.

An engineer who analyzed the slide for one of the development's property owners said the construction of the road bed at the starting zone was the cause of the disaster.

Maggie Valley engineer Kevin Alford said the road bed in that areas was made from crushed rock which was formed from blasting.

"The upper road was built out of shot material (from) where they had to blast the roadway in there," he said. "It got too much water in it and got too heavy." The sliding material acted like a bulldozer, said Alford, scouring the slope of almost all vegetation. "It wiped out a path down to the bedrock," he said. "It was like an elliptical-shaped bulldozer. It's an amazing thing when you see that kind of material go down the mountain."

The material that came to a rest at the foot of the slope was a "molten mess glob of liquefied soil, rock, trees, brush, everything."

Alford said better planning when it came to building roads might have prevented the problem.

"When you get up in the mountains and start building roads, there are good ways to build roads and bad ways to build roads," he said. "In a situation like that I think it would have been reasonable to do subterranean work to find out what was there. When you have a large amount of uncompacted rock fill that gets a lot of water in it, you have the potential for slope failures. There is still more material up there, so it could happen again."

Monday, March 3, 2008

The Cliffs at High Carolina...Are Safe Slopes a Concern?

The Cliffs' eighth master planned community, The Cliffs at High Carolina has been controversial since the project was announced in June of 2006. In John Boyle's article for the Asheville Citizen Times "Builders rush to beat stricter slope rules," Cliffs President Jim Anthony acknowledged that his company submitted the application to beat the deadline. The Cliffs at High Carolina
is a 2500+ acre residential/resort enclave located on steep mountain slopes in Buncombe County.

In December 2007, The Cliffs Communities won a lawsuit they had filed against Buncombe County. At issue was the county regulation restricting the density of condominium or apartment complexes on steep mountain slopes. Buncombe County Superior Court Judge Ronald Payne ruled that The Cliffs Communities did not have to comply with the county rules. For more information please see "Cliffs can dodge building limits" by Mark Barrett in the Asheville Citizen-Times January 12, 2008.

The real estate web-site for The Cliffs Communities provides the following description:The Cliffs at High Carolina is nestled in the high mountain meadows of the Blue Ride Mountains at an elevation of nearly 4,000 feet and with views reaching 50 miles.

In 1998 the North Carolina Department of Emergency Management found that the mountain slopes of Buncombe County were at high risk for landslides.

The Buncombe County Hazard Mitigation Plan (August 23, 2004) stated that the steep slopes and fragile soils of Western North Carolina place Buncombe County at a high risk of landslides. This report was issued just weeks before the 15 county catastrophic slope failures of September 2004.

What are the plans for The Cliffs at High Carolina?

According to Mr. Anthony, "The final decision has not been made, as to how many homes and what kind will be built on the land." Mr. Anthony said his company hopes to make an announcement related to the golf course being designed by Tiger Woods, in the coming months. Later in the year it will announce details of of the first offering for sale of lots in the development. Please see Mr. Barrett's article.

Should prospective buyers of property in The Cliffs at High Carolina be apprised of the identified landslide risks with a Natural Hazards Disclosure Statement?

Please be advised that you are buying property in a high risk hazard area and this will affect your ability to obtain insurance. Buncombe County, location of The Cliffs at High Carolina, is in a state designated landslide district. The slope stability information provided by the federally mandated landslide mapping program was not available at the time this residential project was approved. The Cliffs at High Carolina is being developed under regulations that do not require site specific stability investigation.

It is unknown whether Mr. Anthony will provide due diligence for The Cliffs at High Carolina. Safety concerns for this project should dictate soil analyses and site specific studies for all roads and building sites.

If The Cliffs at High Carolina were being developed in California, state law would require site specific investigation and disclosure of landslide risks.