Monday, April 28, 2008

A Five Million Dollar Landslide Loss

Mountain Air Resort property owners have experienced significant and potentially irreparable landslide damage. According to court documents:
…in 2003 the foundations of two buildings of the five unit Austin View Villas began cracking and in late 2004 the foundations of the Units began and/or continued moving and “sliding” on the side of the mountain upon which the Units had been constructed, causing the foundations, wall structures, floors, and other components of the Units to crack and to deteriorate substantially. As a consequence, the Units became-and remain-completely uninhabitable and the Intervenor Plaintiffs have been deprived entirely of the use and enjoyment of their Units since January 2005.
Current tax records show the value of each unit to be $640,000. For a copy of the lawsuit ( 07 CvS 19), please visit wncsos.com.

During the summer of 2004, the Hemlock Bluffs units which are adjacent to the Austin View Villas, began shifting on their slope sites. According to court documents:
During the construction of the Golf Course adjacent to and below the units in Hemlock Bluffs, the Hemlock Bluffs units began moving and sliding. As a result of this moving and sliding, the foundations, wall structures, floors, and other components of the Hemlock Bluffs units cracked and deteriorated, causing substantial damages.
This complaint was settled out of court. (06 CvS 51)

On June 20, 2007 the Mountain Air Development Corporation placed a half page advertisement in the real estate section of The Wall Street Journal introducing the sale of their newest mountain slope properties:
Settlers Edge offers unbelievable views... the Settlers Edge opportunity is very limited... just 16 spectacular homesites... 11 mountaintop estate homes, and 38 condominium homes.
Readers of the Mountain Air promotion will find no mention that the land being marketed is in a hazardous area and that property owners in the resort have suffered extensive landslide property damage.

Mountain slope property is Western North Carolina’s most important salable asset. Unfortunately all of this real estate is located in a state designated high risk landslide hazard district. (1998 Report/North Carolina Department of Emergency Management)

Developers know that old landslide deposits and unstable soils are inherent property threats yet they are allowed to profit on their ability to site and sell homes in these locations without state regulation and without risk disclosure.

Landslides are costly. There is no coverage available to protect homes and property. Insurance companies know from experience that slope failures are predictable and expensive and they will not insure these losses.

The Mountain Air Resort slope failures are not unique or unusual. Landslides cause frequent unreported financial distress to property owners throughout the region. It is remarkable however, that the news media has chosen not to report on landslides in a nationally known mountain resort. ( Editors at both the Charlotte Observer and The News & Observer were provided with copies of the complaint in the summer of 2007.)

The filings show Austin View Villas condominium property losses in excess of $5 million. This amount does not include the diminished property value of the Hemlock Bluffs condominiums.

This lawsuit is newsworthy. How can investors make informed decisions about buying mountain real estate if landslides are hidden from public view?

Friday, April 25, 2008

An Open Letter to Roy Cooper, Attorney General of North Carolina

By Lynne Vogel

For more than a year the North Carolina General Assembly has been debating whether to amend the North Carolina real estate contract. At issue: should buyers receive fair warning that landslides pose serious threats to property values?

There is no reason to wait for legislative action. After the federal disaster declarations of September 2004 your office had the authority to require landslide disclosure statements for all Western North Carolina real estate transactions.

Why the delay?

Precedent indicates that the Office of the Attorney General can act quickly and responsibly to inform the public of property risks. In April 1996 your legal staff responded to inspection reports of the moisture retention problems of stucco clad homes (EIFS). Your office notified builders, developers, and real estate agents that disclosure statements would be required for all EIFS affected properties.

It is not fair that the real estate industry is allowed to conceal material facts. All buyers deserve the right to be informed of substantive and uninsurable property hazards.
Landslide Advisory Statement

Please be advised that you are buying property in a high risk hazard area and this will affect your ability to obtain insurance. _________ County, location of _________ is in a state designated landslide district. The slope stability risk factors of the federally mandated landslide mapping program were not available at the time this residential project was completed. ___________ was developed under regulations that did not require North Carolina licensed geologic site specific safety stability studies. You may wish to seek professional advice about this property.

Wednesday, April 23, 2008

Asheville Mountain Real Estate

What are the financial risks of buying Asheville mountain real estate?

Recent evidence indicates that much of the Asheville/Buncombe County development sites are unstable and subject to landslides.

The Buncombe County landslide probability map shows cautionary areas that must be investigated for stability as unsupervised construction activities will likely trigger landslides. A significant number of landslides and their deposits are pinpointed on the map: these areas are considered dangerous "no build" locations.

The Buncombe County Hazard Mitigation Plan (August 23, 2004) determined that the steep slopes and fragile soils of Western North Carolina put the county at high risk for landslides. This report was issued just weeks before the catastrophic 15 county slope failures of 2004. (Western North Carolina received 2 federal disaster declarations in September 2004.)

Geologic hazard occurrences are defined as events which are so adverse to past, current, or foreseeable construction or land use as to constitute an extreme threat to public health, safety and property. When natural hazard ordinances are enacted they provide real estate risk disclosure and require strict regulation and control over the development and sale of suspect land. Buyer beware: there are no hazard ordinances in Western North Carolina.

State geologists warn that 75% of the developable land in Western North Carolina is located on more than a 15 degree slope: this is the flash point for landslide activity. Tyler Clark, former chief geologist with the North Carolina Geological Survey, stated in an interview, "You can build in many places in North Carolina, but you have to do it right. You need good planning, design, and construction anytime you develop, and part of that is knowing what hazards to look for." NCDENR UPCLOSE

Buncombe County's mountain acreage is currently under extensive development. Some of the largest residential/resort projects are: Versant, Reynolds Mountain, Bartram's Walk, The Settings, The Cliffs at High Carolina, Crest Mountain, and Southcliff. Their approximate locations are indicated on the hazard map. These mountain slope communities were approved without landslide investigation.

The federally mandated 2005 Western North Carolina mapping program, "Is it Safe to Build Here?" was intended to prevent the development and sale of unstable land but planning boards and developers in the 21 county region refused to wait for these risk studies. The Macon, Buncombe, and Watauga county hazard maps show that hundreds of homes and private roads have been built in precarious areas.

The public should be aware that Western North Carolina mountain real estate is a definable risky asset regardless of whether this information is disclosed on current sales contracts. Deaths from landslides are uncommon, 6 recorded fatalities since 2003, but property damage is frequent, expensive, and uninsurable. Landslide probability maps will impair the future value of many Western North Carolina mountain homes. Properties that are located on or near landslides and landslide deposits will be classified unsafe "high risk" real estate.

Investors should not rely on the actions of Western North Carolina planning boards, Realtors, or developers to protect their safety or financial interests. When buying mountain real estate, become informed and choose wisely. Slope stability can only be ascertained by state licensed engineers and geologists: sellers are not qualified to make these assessments. Complete site specific analyses are affordable, generally less than $2,000.

Attorney General Roy Cooper recently counseled, "It's tragic when people lose their homes, especially when it could be prevented."

Tuesday, April 22, 2008

Pinnacle Falls and the Pinnacle Mountain Landslide

Is it safe to build or buy property in Pinnacle Falls? This is a serious question and one that should be asked by all prospective buyers.

It is critical to know whether the Pinnacle Falls building sites are safe from landslides and soil erosion as homeowners policies will not cover this expense, regardless of the cause. The geologic costs for ascertaining slope stability are affordable, generally less than $2,000.

The Pinnacle Falls website does not disclose that the development is located on landslide prone ground and that the flank side of Pinnacle Mountain collapsed in September 2004.

The Pinnacle Falls project was approved in advance of the Henderson County “Is it safe to build here” hazard mapping program so landslide risks were known but undetermined. In September 2004, Henderson County along with 14 other Western North Carolina counties were devastated by landslides. This region received 2 federal disaster declarations.

For additional information about Western North Carolina landslides and the North Carolina Geological Survey mapping program please visit their website.

The following documents show that both the developer and the Henderson County Planning Board were well aware of the potential risks of this project.

This is an excerpt from the Henderson County Planning Board Minutes November 16, 2004, Karen C. Smith Planning Director:

Pinnacle Falls (File # 04-M18) – Master Plan Review (110 Lots) – Located off Pinnacle Mountain Road – A.J. Ball, Agent for Range Ranger, FLP, Owner. Ms. Smith said that this application is for a Master Plan for Pinnacle Falls. A.J. Ball is the agent for Range Ranger, FLP, the owner, and Luther E. Smith is the land planner for the project. She said that there were two versions of the Master Plan in the packet, one with contours and one without. The subdivision is proposed on a parcel containing approximately 290 acres of land and located on the south side of Pinnacle Mountain Road, between Pinnacle Mountain Road and Cabin Creek Road. The site encompasses much of the upper drainage basin for Cabin Creek and there are several waterfalls on the property. The property has steep slopes and has a significant change in elevation between the northern and southern portions of the property…. She said that private roads are proposed and the principal access to the project will be from Pinnacle Mountain Road and a secondary access may be available from Cabin Creek Road….

Hazard Mitigation: Ms. Smith said that this concerns the hazard issues of developing on steep slopes. She said that the County has no specific standards for addressing these issues, but it may be worthwhile for the developer to take potential natural hazards into account during the development of the project. She asked that the developer might possibly talk about stabilization and erosion control with regard to the construction of the roads and any potential areas that could be susceptible to landslides. ( Please see pages 8-10 of the minutes.)

Harrison Metzger's article “Repairs”, Hendersonville Time-News, April 11, 2006 provides a graphic description of the Pinnacle Mountain landslide:
Folks in Bear Rock Estates won't forget the night the hurricane-saturated mountainside tore loose, sending a torrent of mud, trees and rocks hurdling more than 1,000 feet down.

The landslide happened Sept. 8, 2004, as Hurricane Francis pummeled the mountains with rain. But it has only been the last few months that a sense of normalcy has returned with the completion of repairs here. The 1,200-foot landslide is among about 130 sites across Henderson County repaired with $2.3 million in federal and state money....

The Bear Rock Mountain slide occurred in a private development and tore out parts of two private roads. It was eligible for federal and state money because the yawning chasm left after the slide continued to threaten homes until it was stabilized. The slide happened when topsoil on the steep slopes gave way where Bear Rock Road climbs the flank of Pinnacle Mountain. The road was closed for more than a year, forcing residents in the upper part of the development to drive miles out of their way on Pinnacle Mountain Road to get to town.

Sunday, April 20, 2008

Southcliff, an Asheville Mountain Slope Development

Is it safe to build or buy property in Southcliff? This is a serious question and one that can only be answered by state licensed professionals.

The Southcliff project was approved in advance of the Asheville/ Buncombe County "Is it safe to build here?" hazard mapping program, so landslide risks were undetermined. The preliminary landslide map for the county shows mountain ridges and slopes at certain risk of slope failures. Red Zones (High Geologic Hazard) are identified as cautionary, must be investigated, building sites. A significant number of landslides and their deposits are displayed on the map; these areas are classified "no build" locations. The approximate location of Southcliff is indicated on the map.

For additional information about the Western North Carolina landslide mapping program please visit the North Carolina Geological Survey website.

The Buncombe County Hazard Mitigation Plan (August 23, 2004) determined that the steep slopes and fragile soils of Western North Carolina put the county at high risk for landslides. This report was issued just weeks before the catastrophic 15 county slope failures of 2004. (Western North Carolina received 2 federal disaster declarations in September 2004.)

It is critical to know whether the Southcliff home building sites are safe: costs for ascertaining slope stability are affordable, generally less than $2,000. Investors should note that they will be self-insuring for all landslide property loss. Homeowners policies will not cover this expense, regardless of the cause.

The Settings of Black Mountain and the Asheville/Buncombe County Landslide Hazard Map

Is it safe to build or buy property in The Settings of Black Mountain? This is a serious question and one that can only be answered by state licensed professionals.

The Settings of Black Mountain project was approved in advance of the Buncombe County "Is it safe to build here?" hazard mapping program, so landslide risks were undetermined. The preliminary landslide map for the county shows mountain ridges and slopes at certain risk of slope failures.

Red Zones
(High Geologic Hazard) are identified as cautionary, must be investigated, building sites. A significant number of landslides and their deposits are displayed on the map; these areas are classified "no build" locations. The approximate location of The Settings of Black Mountain is indicated on the map.

For additional information about the Western North Carolina landslide mapping program please visit the North Carolina Geological Survey website.

The Buncombe County Hazard Mitigation Plan (August 23, 2004) determined that the steep slopes and fragile soils of Western North Carolina put the county at high risk for landslides. This report was issued just weeks before the catastrophic 15 county slope failures of 2004. (Western North Carolina received 2 federal disaster declarations in September 2004)

It is critical to know whether The Settings of Black Mountain building sites are safe: geologic costs for ascertaining slope stability are affordable, generally less than $2,000. Investors should note that they will be self-insuring for all landslide property loss. Homeowners policies will not cover this expense, regardless of the cause.

Bartram's Walk and the Asheville/Buncombe County Landslide Hazard Map

Is it safe to build or buy property in Bartram's Walk? This is a serious question and one that can only be answered by state licensed professionals.

The Bartram's Walk project was approved in advance of the Asheville/ Buncombe County "Is it safe to build here?" hazard mapping program, so landslide risks were undetermined. The preliminary landslide map for the county shows mountain ridges and slopes at certain risk of slope failures.

Red Zones (High Geologic Hazard) are identified as cautionary, must be investigated building sites. A significant number of landslides and their deposits are displayed on the map: these areas are classified "no build" locations. The approximate location of Bartram's Walk is indicated on the map.

For additional information about the Western North Carolina landslide mapping program please visit the North Carolina Geological Survey website.

The Buncombe County Hazard Mitigation Plan (August 23, 2004) determined that the steep slopes and fragile soils of Western North Carolina put the county at high risk for landslides. This report was issued just weeks before the catastrophic 15 county slope failures of 2004. (Western North Carolina received 2 federal disaster declarations in September 2004)

Two independent surveys have been conducted for the 130 acre steep slope Bartram's Walk subdivision. Both engineering reports found "rock-slope instability" issues with the proposed development plan. For more information please see "All downhill from here," by Cecil Bothwell, Mountain Xpress, December 13, 2006 and The Friends of Town Mountain website.

It is critical to know whether the Bartram's Walk building sites are safe: geologic costs for ascertaining slope stability are affordable, generally less than $2,000. Investors should note that they will be self-insuring for all landslide property loss. Homeowners policies will not cover this expense, regardless of the cause.

Friday, April 18, 2008

The Cliffs at High Carolina...Is this development on stable ground?

Is it safe to build or buy property in The Cliffs at High Carolina? This is a serious question and one that can only be answered by state licensed professionals.

The Cliffs at High Carolina project was approved in advance of the Asheville/Buncombe County "Is it safe to build here?" hazard mapping program so landslide risks were undetermined. It is important to know whether The Cliffs at High Carolina building sites are safe: geologic costs for ascertaining slope stability are affordable, generally less than $2,000. Investors should be aware that they will be self-insuring for all landslide property loss. Homeowners policies will not cover this expense, regardless of the cause.

The preliminary landslide hazard map for Buncombe County, North Carolina shows mountain slopes and ridges at certain risk of slope failures. Red zones (High Geologic Hazard) are identified as cautionary, must be investigated, building sites. A significant number of landslides and landslide deposits are displayed on the map. These areas are considered "no build" locations. The approximate location of The Cliffs at High Carolina is shown on the map.

For additional information about the Western North Carolina landslide mapping program, please visit the North Carolina Geological Survey website.

The Buncombe County Hazard Mitigation Plan (August 23, 2004) determined that the steep slopes and fragile soils of Western North Carolina put the county at high risk for landslides. This report was issued just weeks before the catastrophic 15 county slope failures of 2004. (Western North Carolina received 2 federal disaster declarations in September 2004)

Versant and the Asheville/Buncombe County Landslide Hazard Map

Is it safe to build or buy property in Versant? This is a serious question and one that can only be answered by state licensed professionals.

Versant was approved in advance of the Asheville/Buncombe County "Is it safe to build here?" hazard mapping program so landslide risks were undetermined. It is important to know whether the Versant building sites are safe: geologic costs for ascertaining slope stability are affordable, generally less than $2,000. Investors should note that they will be self-insuring for all landslide property loss. Homeowners policies will not cover this expense, regardless of the cause.

The preliminary landslide hazard map for Buncombe County shows mountain slopes and ridges at certain risk of slope failures. Red Zones (High Geologic Hazard) are identified as cautionary, must be investigated, building sites. A significant number of landslides and landslide deposits are displayed on the map. These areas are considered "no build" locations. The approximate location of Versant is shown on the map.

For additional information about the Western North Carolina landslide hazard mapping program, please visit the North Carolina Geological Survey website.

The Buncombe County Hazard Mitigation Plan (August 23, 2004) determined that the steep slopes and fragile soils of Western North Carolina put the county at high risk for landslides. This report was issued just weeks before the catastrophic 15 county slope failures of 2004. (Western North Carolina received 2 federal disaster declarations in September 2004)

Thursday, April 17, 2008

Landslide Studies Will Impact Western North Carolina Real Estate Values

Would property owners and prospective buyers prefer to know now, or in the future, that real estate values will be adversely affected by landslide probability maps?

The Western North Carolina federally mandated 2005 landslide mapping program “Is it safe to build here? was intended to stop the development and sale of hazardous land. But these non-regulatory studies have been ignored by developers and planning boards throughout the 21 county area. As a result thousands of homes have been built and are being constructed in unstable areas. There have been 6 recorded landslide fatalities since 2003.

Three landslide maps are now in the public domain. The hazard maps for Macon, Buncombe, and Watauga Counties show that hundreds of homes and private roads have been built on landslides, their deposits and unstable soils. Available soil surveys warn that the majority of slopes in Western North Carolina are “unsuitable” or “poorly suitable” for urban development.

In December 2007 the District of Northern Vancouver issued a geologic report disclosing the location of homes at risk of lethal landslides. The study identified 41 homes at high probability of slope failures. There are 29 other locations in the district yet to be investigated.

Sam Cooper’s article “Homeowners cry foul over DVN landslide risk report” Northshoreoutlook.com, December 20, 2007 cannot be linked. The following is a copy of Mr. Cooper's report:

There’s plenty of discontent among 41 property owners labelled at-risk of landslides in a just-released DNV-commissioned study, says North Vancouver lawyer Jay Straith, who is still engaged in legal battles with the district in the aftermath of the January 2005 Seymour landslide tragedy.

In early December the district released a preliminary hazard study of Pemberton and Westlynn escarpments that pinpoints 12 areas with potential for lethal landslides, all of which have properties at the base of slopes, as was the case in Eliza Kuttner’s death in the Seymour slide. The remaining 29 possible risk areas have similar geotechnical concerns, but no residences at the base of slopes.

In response to the study district council asked staff to tackle similar preliminary hazard assessments for the Deep Cove/Cove Cliff, Riverside West, Mosquito Creek West, Capilano River East and Mount Fromme East areas, in 2008.

Since the Pemberton/Westlynn report was released Straith says he taken more than a few calls from affected homeowners interested in exploring legal options because of fears their properties are now devalued.

One of the property owners, who asked to withhold his name as he gets legal advice told The Outlook he thinks the district prematurely classed the 41 homes at risk and has unfairly left onus on the owners to address potential geotechnical issues, likely at high costs. He said the district should have approached individual homeowners with information before publishing the report. He added the district granted building permits in the first place, arguing they should chip in to address geotechnical issues.

In an interview DNV Mayor Richard Walton said he doesn’t doubt that real estate values will be affected by the report and others likely to follow across the district, but he maintained public safety trumps all other concerns.

Straith agreed, saying immediate disclosure of study information is the best policy.

Furthermore, he asserted if previous councils would have been as “proactive” with risk assessment policy as the current one, the Kuttner tragedy never would have happened.

Straith represents the Perrault family-whose home smashed down into two homes below it in the Seymour slide-and four other affected families in ongoing litigation including insurers and the District of North Vancouver.

Straith has argued the district knew the Seymour slide area had geotechnical issues, but didn’t take adequate steps to warn property owners. Now, he says it appears the district has “learned the lesson.”

“There’s a lot of unhappy campers out there (among the 41 homeowners affected in recent study),” Straith said. “They’re saying, What do we do now?”

“It’s a tough situation for people to be in, but the district is fulfilling its obligation… I know it’s politically tough but it’s the right thing to do legally and morally.”

Straith reiterated that he believes the provincial government should legislate for all available geotechnical risk information be tagged to land titles across the province, as is done in disaster-prone California.

“People are buying and selling properties with no disclosure of geotechnical issues,” he said. “(Landslide and other risk issues experienced in North Vancouver) is the tip of a very large iceberg going across the whole province.”

Wednesday, April 16, 2008

Western North Carolina Mountain Resorts and Landslides, "A really dangerous situation"

Western North Carolina mountains are being deforested to accommodate multi-thousand acre resorts. Are these treeless slopes safe?

Clear-cutting leads to landslides in Washington State

In early December 2007, storms hit Southwest Washington. Barren mountain slopes collapsed, triggering massive landslides in the Stillman Creek area of the state. A little more than three years earlier the Weyerhaeuser Company had received state permission to clear-cut 106 acres on a slope facing the creek that was the site of the catastrophic mudslides.

In January 2008, John Dodge reported on the likely cause of the landslide:
During a state Senate committee meeting January 10, 2008, University of Washington professor David Montgomery told the members of the Senate Natural Resources Committee, "As a geologist I see no surprises here. When you clear-cut potentially unstable slopes, you increase the risk of landslides up to tenfold." Timber industry officials defended logging practices in the Willapa and Chehalis river basins, blaming the mass wasting of soil and trees on a freakish amount of snow, rain, and wind over a three-day period.
Please see John Dodge's article "Logging officials defend practices" in The Olympian, January 11, 2008. For additional information about clear-cutting on unstable slopes please see Hal Bernton’s article "Mudslide photo spurs look at logging practices," Seattle Times, December 17, 2007.

Landslide Studies in Western North Carolina

Tyler Clark, the former chief geologist with the North Carolina Geological Survey, stated in an interview:

There have been landslides in the North Carolina mountains since prehistoric times, but now more people are vulnerable because more people are choosing to live in areas that may be prone to landslides. When you add to that hurricanes or other storms that could start a landslide you have a really dangerous situation.

Our studies of landslides across North Carolina over the last year and a half indicate that a large number of them occurred because of things that people have done to alter the landscape. These activities have included construction of roads, house building, and the cutting of trees. When you try to develop land on a steep slope, you can change a stable condition to an unstable one
.

Laurelmor and The Ginn Company Lawsuit

Laurelmor, a Ginn Resort Property, is one of the largest mountain slope communities ever planned for Western North Carolina. Laurelmor, is located in the Blue Ridge Mountains and land for the project encompasses 6000 plus acres in Watauga and Wilkes Counties. The Ginn Company advertises 1500 home sites for sale in the resort.

History of the Ginn Company Lawsuit

A class action lawsuit was filed against The Ginn Company on May 29, 2007. This nine-count lawsuit was filed in U.S. District Court in Michigan. The $60 million Federal lawsuit has been moved to the Middle District of Florida in Jacksonville. The following article from LawyersandSettlements.com provides a summary of the legal complaints:

A class action lawsuit has been filed against the real estate venture for allegedly misleading and defrauding consumers in property purchases. The lawsuit was filed in the United States District Court for the Eastern District of Michigan on behalf of all those who purchased land an homes from The Ginn Company and alleges the company has breached agreements and violated several laws, including the Interstate Land Sales Full Disclosure Act and the Securities and Exchange Act of 1934. The suit claims Ginn solicited plaintiffs to purchase vacant residential lots in Florida by sending brochures and marketing materials advertising the lots. Purchasers were allegedly promised large returns for their investment and claim initial purchasers were actually paid the promised returns which attracted additional purchasers. The lawsuit alleges Ginn created a complicated web of companies to be used in marketing, soliciting, and promoting properties to potential purchasers in order to avoid scrutiny of US regulators. The case also claims Ginn perpetuated a ponzi scheme where returns to investors were not financed through the success of the underlying business venture, but were taken from principle sums of newly attracted purchasers. In all, the suit is alleging nine counts, namely violation of Interstate Land Sales Act failure to provide property report; violation of the interstate Land Sales Act Fraud and Deceit upon purchasers; violation of securities and exchange rules registration, reporting and disclosure requirement; false representation under Securities Exchange Act of 1934; "Ponzi Scheme" and violation of section 10(b) of the Securities and Exchange Act; violation of State Securities laws; fraudulent misrepresentation; innocent representation; and violation of Racketeer Influenced and Corrupt Organizations Act.

For additional information please see the following articles:

“The Ginn Co.’s federal suit moves to Fla.” Orlando Business Journal March 14, 2008
“Ginn fights lawsuits and other woes” Orlando Sentinel.com October 5, 2007

Will this lawsuit affect the financial well being of The Ginn Company and their plans for Laurelmor? Should this lawsuit be disclosed to current and future Laurelmor investors?

For additional information please visit ginnlawsuit.com

In response to the article "Ginn fights lawsuits, other woes" a Realtor wrote the following to the Orlando Sentinel on January 11, 2008:
These deals should never have happened, how can Ginn sell lots for $1.2m and then 2 years later these same lots will not sell for $300,000 these deals would not have gone through if the Appraisers done their jobs and the Banks had looked at the prices of these lots, how can they triple in months. The Investors have been taken to the cleaners by the Ginn Company, Ginn Salesman and Appraisers and certain Mortgage Brokers working for Crown Bank, Suntrust and Fifth Third Bank, who between them have lost millions and millions. It is one of the biggest land fraud scams I have ever witnessed and there is another law suit in the pipeline with up to 200 plaintiffs. There isn't a Bank out there now who will fund a Ginn Property.

Saturday, April 12, 2008

Reynolds Mountain...Is this development on stable ground?

Is is safe to build or buy property in Reynolds Mountain? This is a serious question and one that can only be answered by state licensed professionals.

The Reynolds Mountain project was approved in advance of the Asheville/Buncombe County "Is it safe to build here?" hazard mapping program so landslide risks were undetermined. It is important to know whether the Reynolds Mountain building sites are safe: geologic costs for ascertaining slope stability are affordable, generally less than $2,000. Investors should note that they will be self-insuring for all landslide property loss. Homeowners policies will not cover this expense, regardless of the cause.

The preliminary landslide hazard map for Asheville/Buncombe County shows mountain slopes and ridges at certain risk of slope failures. Red Zones (High Geologic Hazard) are identified as cautionary, must be investigated, building sites. A significant number of landslides and landslide deposits are displayed on the map. These areas are considered "no build" locations. The approximate location of Reynolds Mountain is shown on the map.

For additional information about the Western North Carolina landslide mapping program please visit the North Carolina Geological Survey website.

The Buncombe County Hazard Mitigation Plan (August 23, 2004) determined that the steep slopes and fragile soils of Western North Carolina put the county at high risk for landslides. This report was issued just weeks before the catastrophic 15 county slope failures of 2004. (Western North Carolina received 2 federal disaster declarations in September 2004)

Reynolds Mountain and Landslides

Cecil Bothwell 's article "Steep canyon rearrangers" in the March 29, 2006 issue of Mountain Xpress provides the following information about Reynolds Mountain:


During a March 21, 2006 Buncombe County formal session, Buncombe County commissioners discussed safety regulations for expansive slope side developments. During the public hearing Gary Higgins, Director of the Soil and Water Conservation District, told the group "We are not opposed to development in Buncombe County, but what we are concerned about is that as you move up steeper slopes you cannot apply the same rules of construction that you do lower down. They are more likely to erode and cause downstream problems." Building homes and roads on steep slopes results in extreme rates of soil erosion Higgins said, and erosion-control measures are not as effective on these settings. In addition, it's "very difficult to establish ground cover on such areas because excavation goes down into subsoil and such soils are shallow and poor, often with a high mica content." Higgins also said that excavation cuts going down to bedrock create slowly permeable surfaces where runoff is greatly increased.

Higgins displayed a group of slides illustrating these problems in an "unnamed development." Higgins said these photos show that "there is tremendous sloughing and slipping of impacted slopes." The slides also included pictures of early construction sites on Reynolds Mountain. Higgins predicted that "the likely effect of such high-density development is to cause landslides."



Asheville/Buncombe County Landslide Map Shows High Risk Residential Development Locations

The preliminary Buncombe County, North Carolina landslide hazard map shows mountainous terrain at serious risk of potential slope failures. Red zones (High Geologic Hazard) pinpoint hazardous construction locations: high probability that slope modifications will trigger landslides.

A significant number of landslides and landslide deposits are displayed on the map. These areas are considered unsuitable and unsafe building locations.

The Buncombe County Hazard Mitigation Plan (August 23, 2004) determined that the steep slopes and fragile soils of Western North Carolina put the county at high risk for landslides. This report was issued just weeks before the catastrophic 15 county slope failures of 2004.
(Western North Carolina received 2 federal disaster declarations in September 2004)

Buncombe County's mountain real estate is currently under extensive development. Some of the largest residential/resort projects are: Versant, Reynolds Mountain, Bartram's Walk, The Settings, The Cliffs at High Carolina, Crest Mountain, and Southcliff. Their approximate locations are indicated on the hazard map. These mountain slope communities were approved without landslide investigation.

Geologic Hazards are defined as geologic events which are so adverse to past, current, or foreseeable construction or land use as to constitute an extreme hazard to public health, safety and property. When geologic hazard ordinances are enacted they provide real estate risk disclosure and require strict regulation and control over the development and sale of hazardous land. Buyer Beware: There are no geologic hazard ordinances in Western North Carolina.

The 2005 Western North Carolina landslide hazard mapping program, Is it Safe to Build Here? was intended to prevent the development and sale of hazardous real estate but planning boards and developers in the 21 county region refused to wait for these critical safety studies.

The hazard maps for Macon, Buncombe, and Watauga counties show that hundreds of homes and residential roads have been built in precarious areas. It should be noted that 75% of the developable land in Western North Carolina is located on more than a 15 degree slope and state geologists warn that this is the threshold for landslide activity.

Tyler Clark, former chief geologist with the North Carolina Geological Survey, stated in an interview, "You can build in many places in North Carolina, but you have to do it right. You need good planning, design, and construction anytime you develop, and part of that is knowing what hazards to look for." NCDENR UPCLOSE

The public should be aware that Western North Carolina mountain real estate is a definable risky asset regardless of whether this information is disclosed on current sales contracts. Deaths from landslides are uncommon, 6 recorded fatalities since 2003, but property damage is frequent, expensive, and uninsurable. The landslide hazard maps will affect the future value of many Western North Carolina mountain homes. Properties that are located on or near landslides and landslide deposits will be classified high risk real estate.

Prospective buyers should not rely on the actions of Western North Carolina planning boards, Realtors, or developers to protect their safety or financial interests.

When buying mountain real estate, become informed and choose wisely. Slope stability can only be determined by state licensed engineers and geologists: Sellers are not qualified to make these assessments. Complete site specific analyses are affordable, generally less than $2,000.

Attorney General Roy Cooper recently counseled, "It's tragic when people lose their homes, especially when it could be prevented"

Saturday, April 5, 2008

Grey Rock at Lake Lure...Is this Development on Stable Ground?

What is happening in Grey Rock, location of the HGTV Dream Home giveaway?

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 Companies, approximately $94,000.

In the same 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."

The minutes of the Rutherford County Commissioners' Meeting of January 8, 2006 provide the following information concerning construction issues in Grey Rock:

Danny Searcy of the Planning Department presented a recommendation from the Planning Commission for an extension of the completion dates for road construction in Phases 1 and 2 of the Greyrock development in Lake Lure. He explained that there is new leadership in the the development corporation and that the bond values have been revised. The Planning Commission has scrutinized these plans carefully. The developer will present quarterly reports to the Planning Commission. A work plan to meet requirements of the NC Department of Environment and Natural Resources is being implemented.

Mr. Mark Rogers of Land Resource Companies stated that his company is committed to completing the work at Grey Rock. He explained the difficulties they were up against, citing problems with the original design, which has been based on faulty topographic maps; the narrowness of the road right of way, which did not provide adequate space for grading and filling; and the inexperience of the contractor in working in this kind of terrain. He said that in phases 3 and 4, ground level surveys would be conducted with an experienced crew. Also, a contractor is on board who understands how to build in this environment.

Commissioner Helton noted that they had been cited not to do any more work until erosion problems had been addressed. Mr. Rogers said that they would not proceed until they had clearance from DENR.

Commissioner Hill asked whether Mr. Rogers would be willing to return in six months with an updated report. Mr. Rogers agreed to do so. Manager Condrey suggested that the Commissioners also receive the quarterly reports that will be prepared for the Planning Commission.

Commissioner Washburn made a motion to accept the recommendations of the Planning Commission in regard to the construction deadline extensions for Phase 1 and Phase 2 for Greyrock and to authorize the County Attorney, Danny Searcy and John Condrey to finalize the necessary addendums to the existing Performance Agreements with Buffalo Creek L.L.C. Commissioner Hill seconded the motion. The motion was passed unanimously.

Topix opened a discussion on Grey Rock in February 2007. Steven Zide offered the following comment after reading the Asheville Citizen-Times article on their website. "I own a lot in Gray Rock phase II. I am very concerned about the article that I just read. I had no idea of the problems that Grey Rock is causing. As lot owners, we should be informed. The roads were supposed to be done a year ago and I can not even get to my property to see it. Very disturbed..." March 1, 2007.

The Grey Rock website does not warn that slopes within the resort have experienced serious erosion, nor does it reveal the findings of the 1997 Rutherford County Soil Survey. This 450 page document states that the majority of slope construction sites in the county are unsuitable or poorly suitable for urban development. "As the slope increases the hazard of erosion and the difficulty in controlling erosion increases." Please see page 192 of the report.

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.

Land Resource, LLC is obligated to provide full disclosure of all material risks to current and prospective property owners. The erosion problems within the resort could diminish property values and might present a serious long term financial responsibility for the Grey Rock Property Owners Association.