Tuesday, December 22, 2009

Wildflower Development Franklin, NC Threatened by Landslides

Wildflower Subdivision—Thompson Road Landslide—November 17, 2009

Macon County Digitized Soil Hazards Map—
Additional Macon County landslide hazard maps are available through
the NCGS. On September 16, 2004 the Macon County Peeks Creek debris

flow killed five people and destroyed 15 homes.

“Road failures cast uncertainty on Wildflower’s future” The Smoky Mountain News-December 16, 2009 —Staff Reporter Giles Morris

As reported by The Smoky Mountain News, a section of the Wildflower subdivision road failed in mid-November. The half-acre debris flow covered the neighboring down slope home site and according to the North Carolina Geological Survey, potentially endangers property owners outside the subdivision.

Warren Cabe, Director of the Macon County Emergency Services, said
After we noticed there was a slide there, we notified property owners in the valley just so they could know what was going on above them. We wanted them to hear it from us instead of reading it in the newspaper.
State geologists have identified 20 other potential road-construction landside areas within the subdivision.

The County has notified Robert Ullmann, the developer, that his company Ultima Carolina, LLC is responsible for repairing and stabilizing the Thompson Road landslide and is also liable for all other road endangerment issues. Ultima Carolina has indicated that they will hire a geo-technical engineer to assess the at-risk areas and will address future erosion (landslide) issues.

Wildflower’s 30-mile private road system was built on colluvial soils, a highly unstable, difficult to control base. The costs to repair these types of road failures are expensive and pose substantial financial risks to homeowners' associations. For example: In 2003, rain set off landslides on several miles of roads in the Maggie Valley, North Carolina Horseshoe Cove subdivision. McGill Engineers, an Asheville-based firm, provided property owners with the following estimates: $307,021 for road and drainage repairs; $2,868,750-5,230,000 for slope repairs. Horseshoe Cove roads were built on colluvial soils.

Who’s Responsible Should Ultima Carolina, LLC Declare Bankruptcy?

There are concerns regarding Ultima Carolina’s financial well-being. Of the planned 250-Wildflower lots, 151 have been sold. As of November 4, 2009, more than 30 property owners were in default and Macon Bank, a major mortgage underwriter, expects more.

Stacy Guffey, a former Macon County planning director, has raised an relevant question: Who will pay for Wildflower's landslide road damage should the developer become insolvent?

The North Carolina Real Estate Commission advises that Wildflower property owners are responsible for the subdivision’s private roads should Ultima Carolina declare bankruptcy. Road ownership is transferred from the developer to property owners via a document titled the Subdivision Street Disclosure Statement. When Mr. Ullmann sold Wildflower lots, his clients were obligated to sign the following road conveyance document.
Sample Subdivision Street Disclosure Statement

Pursuant to N. C. G. S. Section 136-102.6 _______, as the Declarant of _______, issues this statement indicating that all of the roads within_______ are private. It is the obligation of _______ Homeowners' Association, Inc. (hereafter "Association") to maintain and keep in good repairs all of the private roads in _______Subdivision. It is mandatory for all property owners in _______ to be a member of the Association and the property owners, with the exception of the Declarant, have an obligation to pay assessments to maintain the private roads. The Declarant specifically states that the streets have not been constructed in such a manner to allow inclusion on the State highway system for maintenance.
The standardized Subdivision Street Disclosure Statement which was authorized on October 1, 1975 was not intended as a disclosure document for hazardous-land subdivisions. The statute reads in part
If the street is designated by the developer and seller as a private street, the developer and seller shall include in the disclosure statement an explanation of the consequences and responsibility as to the maintenance of a private street, and shall fully and accurately disclose the party or parties upon whom such street or streets shall rest....
Stakeholders should take notice that there is no explanation of the financial commitment required on the part of property owners for the maintenance of roads built on landslide-hazardous soils.

Mr. Ullmann could have fulfilled his obligation by giving his clients factual information. Wildflower property owners should have received the following full disclosure statement:
Wildflower Steep Slope Subdivision Street Disclosure Statement

Wildflower's private mountain roads were built on unstable soils. Landslides and erosion are recognized chronic hazards above a 15% slope. Soil assessments for the Wildflower subdivision can be found at the Macon County Soil & Conservation Office. Ultima Carolina, the developer, was not required to conduct geotechnical, hydrologic or soil suitability studies for this subdivision. Should this subdivision’s roads be damaged by predictable natural occurrences, the members of the homeowners’ association will be liable for all repairs.
It is unlikely that property owners will be given copies of the Wildflower Roads Evaluation Report commissioned by the developer. In the absence of that Report, property owners can read the Horseshoe Cove Roads Evaluation Report to understand the cost and complexity of repairing and stabilizing failed slopes. McGill engineers advised the property owners that
...due to the nature of the colluvial soil found within the failure areas and the unknown depth to rock or a solid bearing surface, additional geotechnical exploration and testing will be needed during project design to verify the subsurface conditions and more clearly define the extent and cost of the repairs. Therefore, we have estimated a range of repair costs for slope failures. These vary from $25 to $50 per SF for repairs 1, 2, 3, 9, and 10 on the Creekside, Saddle, Stirrup, and Bridle Drives, and from $40 to $60 per SF for the repairs 4-8 on Bridle Drive.
It is clear that Wildflower property owners were disadvantaged by the absence of material information on their road conveyance documents. The question is, will they challenge Ultima Carolina's actions in this matter?

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