The Hills of Rivermist: A Centex Hazardous-Land Subdivision

Rodolfo Gonzalez/AMERICAN-STATESMAN

Views of The Hills of Rivermist Subdivision Landslide— January 25, 2010

Landside in The Hills of Rivermist Subdivision Endangers Homes

Twenty-seven homes in Rivermist and The Hills of Rivermist Subdivisions have been red-tagged because sections of a landside-prevention retaining wall failed. Centex, the developer of Rivermist and The Hills of Rivermist, has offered to compensate property owners above and below the slide area with buybacks.



The Hills of Rivermist Landslide-Prevention Retaining Wall

On February 4, 2010 Roderick Sanchez, director of the Planning and Development Services Department for the City of San Antonio, stated in his findings memorandum that Centex violated the International Residential Code and the International Building Code by neglecting to obtain a permit for the Hills of Rivermist retaining wall.

Mr. Sanchez noted that there were several factors that likely contributed to the wall's instability:

—Design failure in that wall was never properly designed in the first place.

—Construction failure in that wall was not built in accordance with the engineered plans and specifications (this determination has been made in the portions observed).

—Slip failure of the soil strata below the wall.

The city is holding Centex responsible for creating a public hazard. As a result, Centex has agreed to assume liability for its actions and will build a new safety wall. Plans for the landslide-prevention wall have been approved at a cost of four to five million dollars.

The Hills of Rivermist Homes

Property owners outside the landslide hazard area have told the media that their Rivermist homes are exhibiting signs of earth movement damage such as cracks and pop-out nails. This type of structural distress is caused by unstable soils.

Homeowners Insurance

The Hills of Rivermist property owners who have experienced structural damage have to depend on Centex for repairs because they have no insurance protection: Homeowners' policies nationwide exclude losses caused by earth movement.

The Hills of Rivermist Soil Survey

Thanks to the efforts of Wayne Caswell, a member of the advocacy group Homeowners of Texas, soils in The Hills of Rivermist Subdivision have been identified.

The three predominate soils in The Hills of Rivermist building site are Anhalt clay (map symbol Ca), Crawford and Bexar stony soils (Cb) and Brandon clay (HtA). These soil compositions are classified "expansive" and are not recommended as a support for home construction.



United States Department of Agriculture—The Hills of Rivermist Soil Survey Map

Mr. Caswell notes that according to the USDA's Web Soil Survey, 94.6% of the selected Area of Interest representing Hills of Rivermist is “Very Limited” for residential construction.

Hazardous-Soil Findings

Bexar County, Texas Soil Survey 1966

The Bexar County Soil Survey, a cooperative endeavor by the U. S. Department of Agriculture, the Texas Agricultural Experiment Station, and the City of San Antonio was undertaken to prevent costly mistakes in land use planning for agriculture and residential development.

Soil identification serves two purposes:

Suburban residential development and the accompanying extension of public utilities and establishment of business and recreational facilities create a need for soils information somewhat different from the information needed for purposes of agriculture. Land appraisers, realtors, city planners, builders, and others need to have facts that will help them to know what sites are suitable for homes or other buildings and what areas should be reserved for other uses.

Sites for houses, industrial buildings, and public utilities need to be carefully studied before construction is begun.

Some of the soils in Bexar County shrink and swell enough to crack foundations and walls.

FHA: Building on Expansive Soils will Result in Severe Structural Damage

In 1974 the Federal Housing Authority warned that buyers should be made aware of the consequences of building homes and other structures on expansive soils:

Severe damage to building foundations can result from "swelling" or "expansive" soils. These soils, usually cohesive clays, can swell or shrink as they go from the dry to the wet state or vice versa. This alteration in moisture can cause a volume change which creates large differential movements within the structure and thus causes excessive cracking of floors, walls, and foundations. Soils with expansive characteristics must be recognized in order to evaluate properly their stability as foundation material.

Studies commissioned by the FHA in the 70s determined that expansive soils were common in Bexar County, Texas.

“Department of the Army USA, Technical Manual TM 5-818-7, Foundations in Expansive Soils, 1 September 1983.”

For the reasons cited below government buildings are not constructed on expansive soils:

b. Occurrence of damages. Damages can occur within a few months following construction, may develop slowly over a period of about 5 years, or may not appear for many years until some activity occurs to disturb the soil moisture.

c. Structures susceptible to damages. Types of structures most often damaged from swelling soil include foundations and walls of residential and light (one-or two-story) buildings, highways, canal and reservoir linings, and retaining walls. Lightly loaded one- or two-story buildings, warehouses, residences, and pavements are especially vulnerable to damage because these structures are less able to suppress the differential heave of the swelling foundation soil than heavy, multistory structures.

Fraudulent Concealment of Hazardous-Soil Conditions

It is clear from the referenced documents that the San Antonio Planning and Development Services Department and the developer Centex knew that home sites throughout The Hills of Rivermist Subdivision were threatened by hazardous-soil conditions.

The San Antonio Planning and Development Services Department has received queries about soil conditions in The Hills of Rivermist Subdivision. The city's response:

The department does not require a builder to submit soil information. Instead, at the time a builder submits its application for a residential building permit, the Code allows the builder the option to hire a licensed professional engineer to design the foundation system for your home in accordance with the Residential Building Code.

Complicity

Because Planning and Development does not require soil analysis as a prerequisite for building permits, hazardous-land data is not recorded on plats. If this pertinent information is not disclosed on plats, it does not appear on real estate sales contracts.

Hazardous-Land Real Estate Disclosure Statement

Centex failed to reveal a material fact—unstable soil conditions—on their Hills of Rivermist sales contracts. If purchasers had received the following risk disclosure statement, it is unlikely that they would bought homes in this subdivision.

The Hills of Rivermist Hazardous-Land Disclosure Statement

Please be advised that you are buying a home that has been built on unstable soils. The Federal Housing Authority advises that homes built on expansive soils are likely to experience severe structural damage.

Hutto Parke Hazardous-Land Conditions

The Hills of Rivermist Subdivision is not the only Texas residential community to be affected by hazardous-land conditions. Lennar, the developer of Hutto Parke, exposed their clients to two significant undisclosed risks: arsenic-contaminated land and expansive soils. For additional information please visit the Hutto Parke Web site.

Binding Arbitration

Those purchasing new homes in Texas and numerous other states are denied judicial review of builder-caused defects because of binding arbitration clauses in new home real estate sales contracts. Questions of real estate fraud remain under court purview.

Federal Action

Texas lawmakers have failed to force disclosure of hazardous-land conditions for the usual reasons. Contractual disclosure would have a disastrous impact on real estate development and sales.

Earth movement events: landslides and unstable soils affect property owners in all states. A conservative estimate of the uninsurable losses caused annually by hazardous soils is several billion dollars. Comprehensive, indisputable risk data is available through various state and federal agencies but this information is not communicated to purchasers.

The only solution to the industry's country-wide practice of selling high risk real estate is passage of a federal Hazardous-Land Disclosure Law.

Rich Cove Road Landslide: Is the Town of Maggie Valley Guilty of Reckless Endangerment?

Photos of the February 5, 2010 Rich Cove Road landslide—Asheville Citizen-Times
Flyover video provided by WSPA News


The Case for Reckless Endangerment

The February 5, 2010 Ghost Town in the Sky landslide is the latest example of harm caused by government negligence. Haywood County commissioners, the Town of Maggie Valley aldermen and their respective planning boards were dutifully notified twelve years ago that land under their jurisdiction was highly unstable.

Western North Carolina Hazardous-Land Warnings

The Federal Emergency Management Agency issued Western North Carolina landslide advisories in 1998. The FEMA hazardous-land bulletins warned that homes and roads throughout 23-mountain counties were likely to experience disastrous landslide events.

Significant Western North Carolina Landslides

Since October 2009, I-40 has been hit with three rock slides. A section of the Blue Ridge Parkway near Asheville was closed because of imminent slope failure.

In September 2004 rain set off landslides in fifteen counties. The result: loss of life and homes. Fifteen counties were declared federal disaster areas.

Recurring Landslides Damage Homes and Roads in Haywood County

One of the most outspoken critics of hazardous-land development is Marc Pruett, director of Haywood County Erosion Control. In October 2005 Mr. Pruett provided Haywood County commissioners with graphic evidence of the damage caused by steep slope unstable soil development. The Haywood County landslide presentation was covered by The Enterprise-Mountaineer. The following is a reprint of the newspaper's now-archived article.

"Disappearing Haywood" by Jeff Schmerker
The Enterprise-Mountaineer— October 31, 2005.

County to craft ordinance aimed at halting erosion

If you ever get the chance to see Marc Pruett’s erosion control disaster slide show by all means, watch it.

Pruett’s diorama is a hundred or so photos that depict in shocking detail the worst of Haywood County residential development. There are photos of roads splintered into tiny bits as the slopes underneath them give way. There are images of streams running dark brown, choked with silt from unmitigated erosion. There are pictures of cut slopes so steep they have been reduced to constantly avalanching gullies.

And then there are the homes. Pruett has pictures of houses being slapped on one side by landslides and falling off deliriously steep slopes on the other, homes whose yards are riddled with gaping crevasses as the land pulls away beneath them, homes whose foundations have cracked, some of the cracks so big daylight shines through them, and pictures of homes literally being torn apart as the unstable ground they sit on gives way. Pruett, the county’s erosion control program director, who showed his slides Tuesday night to a gathering of county officials and environmental workers, said in nearly every case the culprit was the same: shoddy building practices in unsafe terrain.

The Haywood County Board of Commissioners is looking into a new set of standards to combat the effects, both personal and environmental, of slope development.

Commissioners have said they would like to see recommendations on a plan in January. Pruett told that group that in many cases the erosion nightmares are the result of poor education, or bad decision-making, in areas saddled by steep slopes and bad soils. The goal in writing such a plan, he said, would not be to hinder development, just to ease erosion.

“My personal opinion is that we do not need to look at mandating densities of development or prohibiting development,” Pruett said after the meeting. “We need to allow development wherever people want to build, but get them to build a little bit better.

Traditionally, said Commissioner Mary Ann Enloe, some builders have resisted similar ordinances.

So the challenge, she added, is finding a solution that protects mountainsides and residents, while allowing home and road building.

“A lot of the time, folks from the flat country don’t realize the challenge in purchasing mountain land,” Enloe said. But the workshop’s big turnout shows that the community is taking the issue seriously. “It is a heavy responsibility to meet that challenge of protecting our hillsides and mountainsides while not prohibiting people from being about to build a house and build a road into that house,” she said. “The roads to houses are sometimes as much of a problem as anything else.”

Pruett said any recommendations would likely focus on development practices in areas where the soils are known to be challenging for development. But setting standards for development in concert with soil mapping is complicated, he warned. Crafting a workable solution will require input from a variety of sources, and Pruett said he hopes the public weighs in.

“I feel like unsuspecting buyers need to be protected to some extent,” Pruett said. “We should probably look at the long term-effects (of erosion) and find reasonable regulations for the greater good. There is a considerable amount of construction work and land disturbing being undertaken in areas where we do not know enough about the soil.” Pat Tilley, who is leading the planning department’s subcommittee which is investigating ordinances, said she commends the county commission for taking the issue on. Hopefully, she said, the municipalities will adopt rules identical to the county’s so guidelines are uniform.

“What we need is protection for property owners,” she said. “After the house is built, the developer and the builder are gone.”

Mr. Pruett continued to press for regulatory reform. In a follow-up October March 27, 2006 meeting with Haywood County commissioners, Mr. Pruett said: "Currently anyone with a bulldozer and backhoe can carve out home sites and roads into the mountainside. This lack of engineering is causing homes and roads to slide down the mountain throughout the county."

Photograph of Haywood County property damage caused by 2003 spring rains—Story covered by The Enterprise-Mountaineer.


Before and after photographs- Donin Landslide
Haywood County, NC—2009 —Asheville Citizen-Times


Horseshoe Cove Subdivision Landslides- Haywood County, NC
2003 —Pam Williams, Property Owner


Jones's Landslide Fatality Haywood County 2003—NCGS

Moody Landslide
Haywood County, NC 2009
Asheville Citizen-Times


Cascades Subdivision Landslide Haywood County 2006—NCGS


Slope Movement Haywood County, NC —NCGS

Relevant Information

Town of Maggie Valley Fails to Protect Lives and Property

In spite of numerous federal hazardous-land warnings and overwhelming evidence of development-precipitated property damage throughout Haywood County, the Town of Maggie Valley has no landslide prevention ordinance.

1992 Ghost Town in the Sky Landslide

Ghost Town's failed retaining wall was on the site of a previous landslide. State geologists note that the February 2010 slope debris flow followed the path of the park’s 1992 landslide.

Ghost Town in the Sky Bankruptcy

Steve Shiver, President and CEO of Ghost Town, has apologized for the retaining wall failure and resultant damage. The property owners harmed by the Ghost Town in the Sky debris flow will not receive compensation from the group of investors who purchased the business in 2006 and who are responsible for maintenance in the amusement park. Ghost Town in the Sky, LLC filed for Chapter 11 bankruptcy protection in March 2009.

Cause of Ghost Town in the Sky Landslide: Defective Retaining Wall

The $600,000 retaining wall at issue was completed in 2008. Pat Burgin, a contract engineer for Ghost Town, was asked to inspect the project shortly after completion for evident signs of failure. “I looked at it and determined it was not done properly and was an unsafe situation.”

In Mr. Burgin’s assessment, the Ghost Town debris flow “would have been much worse and likely fatal” if the company had not acted to remove massive amounts of dirt from the impaired site. Mr. Burgin believes that the “Present (park) owners kind of inherited a problem from the previous group of investors.”

Endangerment

Mr. Shiver had an obligation to notify Town of Maggie and Haywood County officials of his engineer's hazardous-slope findings, but he chose to remain silent. He did petition the town for a $200,000 loan in the spring of 2009.

The Shiver-led investors are not the only culpable parties in this matter. The Town of Maggie Valley is equally to blame for failing to regulate and control hazardous-land building sites.

Planning Board Fails to Disclose Henderson County Hazardous-Land Conditions

Carriage Park Lawsuit

Following the November 2009 trial that revealed hazardous building sites in the Carriage Park Subdivision and egregious actions on the part of the Inspections department, County commissioner Chuck McGrady said

The Carriage Park situation raises the issue of whether the county ought to play a larger role in development on steep slopes. There are places in this county we ought not be building, or if we were building there, we ought to be building to a different standard.

The Carriage Park lawsuit exposed the common practice of selling unstable subdivision lots to unwary purchasers. Six Carriage Park plaintiffs told the jury that if the developer Dale Hamlin had been truthful about the risks and costs of building town homes on slopes likely to fail, they would have declined to purchase.

Currently the Carriage Park/ Carriage Springs town homes and adjacent land require $1,100,000 in remediation measures. The Hendersonville Times-News covered the Carriage Park trial in a series of articles.

Hazardous-Soil Findings for Henderson County Mountain Real Estate

Henderson County steep slope building sites (defined as land on or above a 15% grade) have long been classified “unsuitable” or “poorly suitable” for residential development because of defective soil conditions. “On site evaluation and planning” is needed when these soils are used to support roads and homes.

Caveat: The decision to build homes and roads on these soils will result in “a major increase in construction effort, special design, or intensive maintenance.” These costly engineering measures may not be feasible for some soils. Reference:1980 Henderson County Soil Survey

Henderson County Mountain Real Estate: Landslide-Hazardous

Landslides also pose significant geologic threats to Henderson County real property.

The North Carolina Geologic Survey plans to release Henderson County landslide maps this year. These maps, along with enhanced computer technology, will enable the planning board to pinpoint landslide-hazardous locations throughout the county. Western North Carolina landslides became a federal disaster concern in 1998.

Fraudulent Concealment

Henderson County steep slope building sites have two indisputable material defects: landslides and unstable soils.

Legal definition of a material defect: A material defect is a problem with the property that the seller knows about, knows would make the property worth less, and which the seller chooses to conceal from the buyer.

Evidence presented during Carriage Park trial showed that the developer Dale Hamlin knew he was exposing his clients to undisclosed financial risks.

Mr. Hamlin was able to deceive his clients because the Henderson County planning board did not record the Carriage Park development tract as a hazardous-land subdivision.

When planning boards act in concert with developers to conceal material defects from purchasers they are aiding and abetting fraudulent sales practices.

Henderson County Mountain Real Estate Threatened by Landslides and Hazardous Soils

North Carolina Geological Survey—
Cost to repair the Bear Rock Estates private
subdivision road $394,000.

Western North Carolina Landslide Hazard Real Estate Maps

In October 2006 Governor Mike Easley issued a press release stating the importance of Western North Carolina landslide hazard real estate maps:

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.

Henderson County Landslide Hazard Maps

The North Carolina Geological Survey expects to release Henderson County landslide maps within the year. These maps will demonstrate that homes and private subdivision roads throughout the county are at serious risk of debris flows, the most common type of destructive Western North Carolina landslides.

Henderson County steep slope building sites (defined as land on or above a 15% grade) are affected by another considerable geologic hazard: unstable soil conditions. The NCGS will include a digitized soils hazard map with the Henderson County landslide maps.



NCGS—September 2004— Embankment
failure threatens Henderson County, NC home.

Henderson County Soil Survey

The 1980 Henderson County Soil Survey instructs that steep slope soils are "ill-suited" for building sites because they require: “major increase in construction effort, special design, or intensive maintenance.” These costly engineering measures may not be feasible for some soils.

Unstable Soils: Focus of Carriage Park Lawsuit


One of the Carriage Springs town
homes— Hendersonville Times-News

When the land under their town homes began to move, six Carriage Park/Carriage Springs property owners took legal action against the developer and their builder.

James Shea, a staff reporter for the Hendersonville Times-News, covered the trial in a series of articles. The following is a summary of the court proceedings.

Carriage Springs Property Owners Allege:

1. Dale Hamlin, the developer and others, failed to disclose that land for the Carriage Park/Carriage Springs town home model required $31,000-$41,000 site preparation.

2. Hamlin failed to disclose the financial relationship between Carriage Park Associates and the recommended builder, Estate Homes of North Carolina.

Evidence

Cost to repair structural damage to town homes: $900,000. Expense to stabilize slopes: $200,000.

Town home construction did not comply with Henderson County building code.

Testimony

Dale Hamlin told the jury that he knew the development of the Carriage Park Subdivision would be a challenge, "It is difficult, steep terrain."

Mr. Hamlin said that he did not reveal the engineering costs to his clients because this information would have impeded lot sales.

Jury Finds Fraud

Defendants: Carriage Park Associates, CPA Realty, Estate Homes of North Carolina and Greg Youse were found guilty of the charges.

Hendersonville Times-News Editorial

Following the trial, the newspaper wrote an editorial suggesting that the county Inspections Department was responsible for the harm caused to the Carriage Springs property owners:

But what is left from the trial's devastating mountain of evidence is a fundamental indictment of the way some promoters and developers do business in Henderson County, and the way the county has tacitly permitted site work and construction that ought to have been red tagged.

The county Inspections Department was an unindicted co-conspirator. Why didn't it do more to call the builder on the violations as they were happening? Why did it sign off on foundation walls that were two to three times taller than code allows?

The questions were not answered.

County commissioner Chuck McGrady was quoted in the editorial: “The Carriage Park situation raises the issue of whether the county ought to play a larger role in development on steep slopes. There are places in this county we ought not be building, or if we were building there, we ought to be building to a different standard.”

Information not reported by the Hendersonville News-Times

There have been twenty-five lawsuits filed regarding Carriage Park development.

On June 17, 2009 Dale Hamlin received a Notice of Violations of the Sedimentation Pollution Control Act. Mr. Hamlin’s company, Carriage Park Associates, LLC was cited in part for

f. Failure to take all reasonable measures to protect all public and private property from damage by such land-disturbing activities 15A NCAC 4B. .0105. Section 15(Carriage Crest) lots 1525, 1527, 1539, and 1562 have had significant damage to their properties due to failure to take all reasonable measures to protect them Section 16 (Carriage Glen) home (Haywood Knolls Subdivision) and tributary below the large tributary sediment trap have had damage over the last couple of years due to failure to take all reasonable measures to protect them.

h. Failure to maintain on graded slopes and fills, an angle which can be retained by vegetative cover or other adequate erosion control devices or structures. G. S. 113A-57(2). Carriage Crest Drive, High Fields Court, Crest Court, Millbrae Loop and Dawn Mist Court right of ways are not stable and must be addressed in the plan with proper measures to stabilize.

Hazardous-Land Real Estate Disclosure

Dale Hamlin was truthful when he said that hazardous-land disclosure would be a deal breaker. The six Carriage Springs property owners testified that if they had been apprised of the risks and costs, they would not have bought land in the Carriage Park Subdivision.