Friday, November 18, 2011

Blue Ridge Mountain Club: A Watauga County, NC Hazardous-Land Subdivision

Western North Carolina landslide photo — SouthWings flyover 2010
Twenty-three Western North Carolina counties, including Watauga, are on the Federal Emergency Management Agency Landslide Watch List.

It has been observed that mountain-view real estate can cause blindness.

Blue Ridge Mountain Club aka Reynolds Blue Ridge aka Laurelmor

The Blue Ridge Mountain Club real estate development project was originally called Laurelmor. During the priced-per-view marketing period 2006-2007, Laurelmor lots were appraised for $500,000 to $1,000,000. In 2008, the Laurelmor name was replaced with Reynolds Blue Ridge. Today the former Laurelmor site is known as the Blue Ridge Mountain Club. Names can be changed but Watauga County unstable land conditions are constant.

Findings of fact: The Blue Ridge Mountain Club tract, along with all other Watauga County steep slope development subdivision sites are exposed to debris flows, underground landslides and slope failures.

Watauga County, NC Landslide Hazard Maps

These federally-required (FEMA) hazard maps show that significant portions of Watauga County are unstable. The North Carolina Geological Survey has determined that 70% of the region is moderately stable to unstable, with landslides occurring in designated low risk areas.

Rock Instability, Debris Flow Pathways, Stability
Index, Slope Movement/Deposits Hazard Maps

Watauga County Real Estate: Hazardous-Land Disclosure

Since landslides and slope failures are expected events, the North Carolina Real Estate Commission determined in 2010 that landslide/soil hazard maps are material facts.

Watauga County Planning and Inspections provides a link to the hazard maps but Realtors and developers are presently not sharing this data with their clients. This is the case for Lubert-Adler Partners, the financier for the Laurelmor/Reynolds Blue Ridge/Blue
Ridge Mountain Club endeavor.

Blue Ridge Mountain Club Remains a Lubert-Adler Investment

At 5,400-acres, the Blue Ridge Mountain Club residential development tract is one of the largest planned communities in Watauga County. Approximately 800-acres of the 6,200-acre subdivision are located in Wilkes County.

When Lubert-Adler and partner Bobby Ginn initiated land sales (November 2006) the Ginn-LA joint venture was officially recorded as Laurelmor.

Plaintiffs in a number of lawsuits allege that the business partners sold questionably-appraised lots and did not disclose that Laurelmor and four other jointly-owned properties were encumbered by $675 million cross-collateralized Credit Suisse liens. Please see Lubert-Adler, The Ginn Development Company et al Charged with Fraud.

In June 2008 Lubert-Adler and the Ginn Development Company defaulted on its obligations. A restructure agreement with the Credit-Suisse lien holders allowed Lubert-Adler Partners to retain control over the Laurelmor project.

Reynolds Capitol Group settled the approximately $30 million Ginn-LA Laurel Creek LTD., LLLP liens in December 2008. New owners were recorded as BR Development Group LLC and Blowing Rock Resort Venture LLC: management is currently provided by Reynolds Signature Communities. The Laurelmor name was retired in September 2009.

Legal Questions re Blue Ridge Mountain Club Real Estate Sales

A review of the Blue Ridge Mountain Club real estate website finds that the developer is not apprising prospective clients of adverse building site conditions.

As a condition of contract, experts recommend that all mountain home sites be independently evaluated for slope stability.

Rendering of a Blue Ridge Mountain Club Cottage

Other than taking legal action against a developer for failing to disclose material risk information, those who suffer property damage have no recompense. Homeowners'  insurance policies will not cover landslide losses.

Blue Ridge Mountain Club property owners face another unaddressed financial risk. It is joint ownership of the planned community’s private roads.

This legal obligation emanates from the Subdivision Street Disclosure Statement which all initial North Carolina HOA property owners are obliged to sign. In essence this legal document states that neither the state nor the county shall be responsible for maintenance and repair of any streets within the subdivision. Developers' use of this standardized conveyance document for hazardous-land subdivision roads is disputable.

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 ____________ Subdivision are private. It is the obligation of _____________ Homeowners' Association, Inc. (hereinafter "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 in ___________ Subdivision in accordance with the recorded Declaration for Planned Community. The Declarant specifically states that streets have not been constructed in such a manner to allow inclusion on the State highway system for maintenance.

Western North Carolina Landslide Hazard Maps

Federal legislation under Robert T. Stafford Disaster Relief and Emergency Assistance Act requires states and counties to comply with hazard identification/mitigation/disclosure protocol or risk losing access to disaster emergency funds.

Western North Carolina landslide hazards became a federal concern after September 2004 rain events precipitated slope failures throughout the region. The cost: five lives, widespread property damage and $72 million in federal aid. The benefit: initiation of the Western North Carolina Landslide Hazard Mapping Program in 2005.

Western North Carolina Landslide Hazard Mapping Program
These maps will show which areas are prone to landslides and that will help developers, county officials and residents decide where to safely build homes, roads and other structures.  Governor Mike Easley Press Release October 2006
For suspect reasons, the General Assembly defunded the once-considered critical Western North Carolina Landslide Mapping Program in June 2011 with the passage of the Appropriations Act.  Two years prior to this action, May 2009, the North Carolina Association of Realtors advised members and other interested parties, that its lobbying efforts to stay the Safe Artificial Slope Construction Act had been successful. The bill's intent: hazardous-land disclosure and control over Western North
Carolina development practices.

The North Carolina Geological Survey has released visual-aid hazard maps for Macon, '06, Watauga '08, Buncombe '09 and Henderson '11. Maps for other landslide-risk counties will not be forthcoming.

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