Ghost Town in the Sky Landslide: Criminal Negligence?

Photos of the damage caused by the Ghost Town in the Sky landslide—Asheville Citizen-Times
Flyover video provided by WSPA News

Ghost Town in the Sky Landslide February 5, 2010

Ghost Town in the Sky landslide-prevention barriers did not stop the massive debris flow that sideswiped down-slope homes and blockaded Rich Cove Road. The 30-foot-high rush of mud traveled 3,000 feet from the amusement park. This is not the first Ghost Town in the Sky landslide: a similar slope failure occurred near this site in 1992. Reference: North Carolina Geological Survey.

Ghost Town Partners, LLC

The Ghost Town in the Sky mountain top amusement park was purchased in 2006 by a group of investors. Steve Shiver is currently President and CEO of the company. Ghost Town Partners, LLC filed for bankruptcy protection in March 2009.

Ghost Town in the Sky Engineer: Landslide-Prevention Retaining Walls "Unsafe"

Ghost Town in the Sky commissioned local contractors in 2007 to construct a geo-grid system of terraced retaining walls to replace deteriorating older barriers. The project was completed in 2008 at a cost of $600,000.

The Mountaineer reported on February 10, 2010 that the damage caused by the Ghost Town in the Sky landslide could have been far worse.

Pat Burgin, a contract engineer for Ghost Town, said he was asked to inspect the series of retention walls shortly after completion. “I looked at it and determined it was not done properly and was an unsafe situation," he said.

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 failing site. Mr. Burgin believes that the “Present (park) owners kind of inherited a problem from the previous group of investors."

Criminal Negligence

Mr. Shiver and his co-investors knew from Mr. Burgin's engineering report that the park's retaining walls were not safe and likely to fail. As such the company had a duty to inform state and county officials that a significant life-threatening hazard existed on its property. They did not.

Developers are frequently sued for negligence in civil complaints. Rarely are they charged with criminal negligence.

The question of whether to take legal action against developers and others for a hazardous-land development disaster was raised after the September 19, 2006 Kilbuck Township, Alleghany County, Pa. landslide. In that incident Wal-Mart Real Estate Business Trust, Kilbuck Properties, L.P. and the Kilbuck Township Board of Supervisors were threatened with state charges of criminal negligence. For additional information please see The Kilbuck Township Landslide: Findings and Recommendations.

The decision to charge Ghost Town Partners, LLC with criminal negligence rests with the state. There are no reports that Attorney General Roy Cooper has opened an investigation.

Rich Cove Road Property Owners Remain at Risk

Ghost Town Partners, LLC is liable for remediating its hazardous slope conditions but the company is under bankruptcy protection. Property owners below Ghost Town in the Sky remain at substantive risk. The following is an update from the Smoky Mountain News.

Smoky Mountain News—Week of March 3, 2010—Bibeka Shrestha • Staff Writer

County reluctant to foot the bill for Maggie landslide clean up costs

Haywood County commissioners are reluctant to hand over taxpayer money to stabilize the latest landslide in Maggie Valley—even if the federal government chips in for much of the cost.

At a commissioners meeting on Monday, the Town of Maggie Valley asked the county to partner in a grant application from the federal Emergency Watershed Protection Program. If approved, the grant would pay to remove debris, reroute the natural stream channel, and most importantly, shore up the still unstable portion of the mountainside. About 12,000 to 16,000 tons of material is looming over the Rich Cove community, posing the potential for more slides.

The federal grant would cover 75 percent of the cost, while the remaining 25 percent would have to be found locally.

But lingering questions over whether the slide at Rich Cove was a natural disaster or caused by a failed retaining wall at Ghost Town in the Sky amusement park has caused county commissioners to hesitate about participating in the program.

Commissioner Kirk Kirkpatrick said the issue at hand is whether Ghost Town is at fault. If so, the company, not county taxpayers, should pay for the slide’s impact. Ghost Town has been struggling with bankruptcy for the past year, however.

Steve Shiver, CEO of Ghost Town, said he just didn’t have enough data — namely the cost of cleanup and stabilization — to make any decisions.

“At this point, we’ll just wait and see what the estimates are,” said Shiver, adding that Ghost Town has been able to repair a road that was washed out by the slide over the weekend. Road access to the top of the mountain is now restored, Shiver said.

At one point on Monday’s meeting, Commissioner Skeeter Curtis asked Maggie Valley’s town manager point blank if the town would pursue litigation against Ghost Town in the future to recoup its costs.

“Is the Town of Maggie Valley willing to enter litigation to get their 25 percent back?” asked Curtis.

Maggie Valley Town Manager Tim Barth replied the town would talk to Ghost Town about whether its owners would chip in to cover the 25 percent local match.

“It won’t get any cheaper for them, I’ll just say that,” said Barth. “If they have to fix that on their own, it’ll be 100 percent cost, and not 25 percent.”

Meanwhile, Commissioner Mark Swanger worried about setting a precedent for providing county money to clean up slides, even when they occur on private property or are caused by private companies.

“How is this one different from the ones we had in the past?” asked Swanger.

Swanger said if Maggie is going to ask for county assistance, it should also follow the county’s lead in implementing regulations for development on steep slopes.

Curtis added that local governments should begin pushing to bring landslide insurance coverage to the state, even if it is expensive.

The commissioners ultimately decided not to commit to the program before receiving a concrete dollar figure on the 25 percent match.

“Really, the bottom line is going to be the cost,” said Commissioner Bill Upton.

Town and county leaders will hold a joint meeting once the federal agency, Natural Resources Conservation Service, comes up with a proper estimate for the stabilization and clean up.

A project manager and engineer surveyed the slide this week and hope to provide a damage survey report by early next week.

Carol Litchfield, a local representative from the Natural Resources Conservation Service, said while legal complexities may arise with this particular landslide, it meets the objectives of the Emergency Watershed Protection Program, which only responds to natural disasters.

Litchfield said the main issue now is not the 25 percent, but whether the grant will be awarded given competition for the funds. Litchfield said it can cost hundreds of thousands of dollars to clean up a site, though she does not have a ballpark figure for what it would cost to stabilize the Rich Cove slide.

The agency will not cover the costs for repairing structures or homes damaged by the mudslide, she added.

The last time the Emergency Watershed Protection Program was utilized in this area was to mitigate the impact of the 2004 floods in 17 western counties, including in Haywood and Macon counties. At that time, a federal state of emergency was declared, and the state covered the 25 percent match.

With this slide, there hasn’t been enough damage to call for a state of emergency at the state or federal level, though both the county and the Town of Maggie Valley signed a disaster declaration.

For now, the threat of another slide still looms over Rich Cove with a precautionary zone that covers more than double the size of the area currently damaged by the slide.

“We got to do something,” said Greg Shuping, emergency services director for the county. “The fact remains that we have a threat.”

Legasus/Waterdance—Jackson County, North Carolina Landslide

Legasus/Waterdance Subdivision Landslide
Jackson County, North Carolina—February 2010
Photos: Perry Eury

“These slides are occurring countywide. None as visible as this one, but I’m vetting calls every time it rains.” Robbie Shelton — Jackson County erosion control officer.

Jackson County, North Carolina Mountain Real Estate

Waterdance: A Legasus-Designed Jackson County, North Carolina Hazardous-Land Subdivision




The Waterdance Subdivision landslide is the latest example of the consequence of hazardous-land real estate development in Jackson County, North Carolina.

The Federal Emergency Management Agency notified Jackson County commissioners and planners in 1998 that land under their jurisdiction was unstable and subject to disastrous landslide events. The Agency's hazardous-land findings were based on historical events, soil surveys and landslide mapping.

When the Waterdance Subdivision was declared and recorded, the plat should have reflected the following material information:

The Waterdance Subdivision development site is located on steep slope unstable soils. Landslides and erosion are likely to occur on, above and below 15% grades. Soil assessments for this subdivision can be found at the county Soil & Conservation Office. Jackson County did not require geotechnical, hydrologic or soil studies for this subdivision. Should this subdivision’s private roads be damaged by predictable natural events, the members of the property owners’ association will be liable for all repairs.

This caveat would have had a deleterious effect on sales, so this material information was withheld from Waterdance purchasers.

Legasus developers, Robert A. Corliss and Theodore C. Morlok, are responsible for a number of Jackson County, North Carolina hazardous-land subdivisions.

Fraud

In November 2009 a Henderson County, North Carolina jury found Carriage Park Associates guilty of fraud for failing to disclose hazardous building site conditions.

News Coverage

The following is a reprint of the Legasus/Waterdance landslide news report.

Smoky Mountain News—Week of February 24, 2010

"Landslide damages financially-strapped Jackson development"
Giles Morris • Staff writer

A landslide at the Waterdance development in the Tuckasegee area of Jackson County washed out a road and dumped a significant amount of mud and concrete into the Tuckasegee River in early February.

Robbie Shelton, erosion control officer for Jackson County, estimated the slide laid bare a 75-foot-wide swath about 100 yards long. A retaining wall holding back a cut-and-fill slope above a road broke, and the resulting slide covered an entire lot at the development.

“It was just retaining too much water and the hydrostatic pressure caused it to fail,” Shelton said.

Shelton said the cause of the slide had not yet been determined.

Shelton said cold weather froze the slide and limited the effects of runoff. He also said the near flood levels of the Tuck’s West Fork may have minimized the impact by diluting the sediment. Shelton said there were no visible soil deposits downstream of the slide when he examined the river days after the event.

Water Dance is located between Tuckasegee and Glenville and is owned by Legasus, a mega developer that once held more than 4,000 acres in Jackson County. The developer fell victim to the recession and has faced numerous foreclosures over the past year.

The slide damaged a lot owned by Patrick Kennedy, who bought large acreage from Legasus during the company’s financial problems. Shelton said Legasus is currently working on a mitigation plan for the soil and concrete that entered the river, and the company’s engineers are studying the roadway. Water Dance was started before Jackson County passed a new, more restrictive subdivision ordinance, but its roads met county standards, Shelton said.

Shelton has received numerous calls about slides around the county as heavy rains and snow hit the mountains hard in February.

“These slides are occurring countywide,” said Shelton. “None as visible as this one, but I’m vetting calls every time it rains.”

Another slide closed a lane of N.C. 281 near Little Canada, and Shelton received reports of a third heavy slide near Whittier.

Macon County Considers Landslide-Prevention Measures

Additional Macon County landslide maps can be viewed on the North Carolina Geological Survey's website.

Macon County, North Carolina Hazardous-Land Designation

In 1998 the Federal Emergency Management Agency advised Macon County commissioners and planners to expect disastrous landslide events. These federal hazardous-land predictability reports were disseminated to twenty-three Western North Carolina mountain counties.

Macon County, North Carolina Landslides

September 2004—The Peeks Creek debris flow killed five people and destroyed fifteen homes.

Of the twenty-three landslide designated Western North Carolina counties fifteen, including Macon, were declared federal disaster areas in September 2004.

November 2009— Wildflower Development Franklin, NC landslides threaten lives and homes.

Macon County, North Carolina Mountain Real Estate

As documented by Macon County hazard maps and soil surveys, homes and roads built on or below steep slopes are subject to landslides. Steep slope (the risk threshold) is universally defined as land on or above a 15% grade.

Macon County residents who suffer earth movement property damage will be informed by their insurance companies that their homeowners' policies do not cover this peril.

Another considerable risk: Liability for mountain roads. Developers deed their roads to Homeowners Associations via Subdivision Street Disclosure Statements. These risk transferal documents oblige property owners to assume responsibility for private subdivision roads. The costs of maintaining landslide-hazardous roads can be substantial.

Macon County, North Carolina: Hazardous-Land Subdivisions

As noted in the following article, Macon County has no restrictions on steep slope hazardous-land residential development.

"Macon slope committee hands off proposed building regulations"

Giles Morris • Staff writer—Smoky Mountain News—Week of February 24, 2010

After months of hard work, Macon County’s steep slope committee shared its recommendations with the county’s planning board last week.

Now the question is whether the committee’s work will survive with its core principles intact if or when it is adopted by the county commissioners.

“There is going to come a time that the commissioners are going to have to step up to the plate,” said County Chairman Ronnie Beale. “This is the first opening of the book.”

A committee with a cross-section of building and environmental interests met 10 times over a period of eight months, but the initial meetings defined the mission.

“During the first two meetings we determined we would try to approach this from a public safety standpoint and from the standpoint of minimizing property damage,” said Al Slagle, the steep slope committee chairman.

That decision meant the committee would not consider regulating slope development for environmental or aesthetic reasons, said committee member Susan Ervin, a member of the planning board.

The recommendations include two sets of standards: one for slopes between 30 and 40 percent and one for slopes over 40 percent. Developers will have to hire an engineer when building on the steeper slopes, but in the middle window, county staff will perform in-house inspections.

The two-tiered approach was an attempt to minimize the cost burden on developers and the county, but Slagle said the committee also determined the county would need a more robust oversight apparatus.

“One of the things we decided was if we’re going to try to level the playing field, it’s going to take some additional county personnel to enforce things,” Slagle said. “Right now a lot of enforcement is based on complaints, and we felt we needed a way to track grading and land disturbance projects.”

A group of grading contractors, developers and builders attended the meeting to learn about the committee’s recommendations. Many of their questions centered on how the regulations would be enforced and how they would shift the cost burden for building on mountainsides.

One local builder asked the committee to consider the financial impact of their recommendations, citing a recent single family home project that required close to $20,000 in additional costs due to engineering fees. Others said the building industry couldn’t support more regulations in the poor economy.

Paul Shuler, a grading contractor who sat on the committee, explained the predicament of having no regulation over steep slope projects.

“I go out here and give a man a price according to the regulations and then this other yahoo comes in and puts a road in for a third of the cost,” Shuler said. “And it washes away three months later and they ask me to come fix it. We’re trying to get in on the same playing field so the roads don’t wash away.”

Stacey Guffey, former planning director and a member of the slope committee, put the discussion in perspective.

“You have to ask ‘What does it cost the builder? What does it cost the developer?’ But you also have to ask ‘What will it cost the taxpayers if we don’t do this?’” Guffey said.

Lewis Penland, chairman of the planning board, was pleased by the lively discussion inspired by the committee’s findings. He applauded the concerned developers and builders who voiced their opinions. He said the regulations are really aimed at contractors who exploit the system.

“I think the unfortunate thing about tonight is the people who should be here aren’t here,” Penland said. “I’m as mountain as anybody, and I don’t like regulation, but I can’t see any other way to fix the problem.”

The county planning board will debate the committee’s findings during next month’s meeting. The planning board can endorse all or some of the recommendations and decide whether to send them on for the commissioners’ consideration.

Commissioner Bobby Kuppers, the county board’s liaison on the planning board, applauded the committee’s work.

“It’s easy to do things that are easy. It’s easy to pick the low hanging fruit,” Kuppers said. “What this committee did was climb up the tree a little bit.”

Kuppers also foreshadowed the difficulties facing the commissioners as they balance the slope committee’s recommendations and the concerns of developers.

“You can’t keep dodging a decision just because it’s hard,” Kuppers said.

Chairman Ronnie Beale said steep slopes need to be dealt with, but he didn’t commit to a timetable.

“I think that steep slopes are one of those things we’ll have to address,” Beale said. “Is this the right time? I don’t know. But I don’t know that there will ever be a good time.”

Macon County’s proposed steep slope rules

For any development on slopes over 30 percent grade:

• Cut slopes over 8 feet in vertical height cannot be steeper than 1.5:1 ratio.

• Fill slopes over 5 feet in vertical height cannot be steeper than 2:1.

• No cut-and-fill slope can exceed 30 vertical feet.

• Fill must be compacted and cannot contain stumps and logs.

• For development on slopes between 30 and 40 percent grade, an engineer is not required but a site plan, showing the areas to be graded, cut/fill heights, drainage plan, is required.

• On slopes greater than 40 percent, developer must hire an engineer or design professional to create a certified plan. Engineer also required on slopes greater than 30 percent if they lie in high or moderate landslide hazard areas.

• The ordinance applies only to the portion of a tract that exceeds the slope threshold, not the entire tract.