Durham businessman Neal Hunter drafted ambitious plans for developing 164 acres in southwestern Durham County into high-density housing and commercial space.
But besides the paperwork and political hurdles that normally accompany a proposal to change the zoning designation on a piece of land, there was one other big obstacle lying in the path of his vision: Jordan Lake, a drinking water reservoir whose shores are protected by stringent environmental regulations enacted and enforced by both the county and the state.
The property sits along N.C. 751 within a mile of the lake's shoreline. That means it falls inside the "critical watershed" where the high-density development proposed by Hunter is prohibited. That is, unless you disagree with where the lake ends.
In 2005, Hunter did just that. He commissioned a private survey that pushed the lake's 1-mile radius boundary westward by more than 100 acres. The new line conveniently excluded Hunter's property, clearing the way for the "751 Assemblage" project, which calls for 1,300 dwellings and 600,000 square feet of combined office and retail space.
Hunter submitted the new survey to Durham planning officials, along with a request to relocate the official boundary. In January 2006, they obliged him.
"Most of all of Mr. Hunter's properties were in the critical watershed. With the adjustment, a large portion—a hundred-plus acres—was removed from the critical watershed area," Planning Director Steve Medlin said.
Outside the watershed, the property would not only be eligible for higher density building—and subject to less environmental scrutiny—but it would also have access to City of Durham sewer and water service.
Nearly three years later, the redrawing of the line is being criticized by the state's Division of Water Quality and revisited by the Durham County Commissioners, who have bickered over it in several closed-door sessions and a public meeting in the last several weeks.
"They want to put a whole city up there," Commissioner Becky Heron said of the 751 Assemblage. "Lord knows what it'll do to Jordan Lake. Once it gets more polluted than it is now, it's going to cost a pile of money to clean it up."
On Nov. 24, commissioners voted 3-2, with Heron and Commissioner Ellen Reckhow dissenting, to stick with Hunter's private survey, despite state officials' objections.
Hunter, president of Cree LED Lighting Solutions and the developer of the enormous Colvard Farms subdivision in the same area, did not return phone calls seeking comment.
The wrangling over the boundary—on which the entire 751 Assemblage hinges—began when Frank Duke, then the city/county planning director, first signed off on the new survey. He explained in a January 2006 letter to Hunter that his survey provided "better information" than when the critical watershed boundary was first mapped. Duke's approval, which he did not vet through the county commissioners or submit to the N.C. Environmental Management Commission (EMC), violated North Carolina's administrative code, according to County Attorney Chuck Kitchen.
Furthermore, the county, in relying on these surveys, "acted outside its authority," according to a determination by the N.C. Division of Water Quality (DWQ), which works as a watchdog on behalf of the EMC.
Duke signed off on the survey just five days after the passage of the city and county's Unified Development Ordinance (UDO) gave him the final say on rezoning decisions.
"The Unified Development Ordinance authorizes the Planning Director to make interpretations of the Ordinance and of the Watershed Overlay boundaries," according to a letter signed by Duke but written on his behalf by Keith Luck, who was at the time a planning supervisor.
Duke's ruling was a gross misinterpretation of the planning director's powers, according to an analysis by DWQ. The section of the UDO that Duke referenced says that the planning director may make administrative decisions about the exact watershed boundary when a property has been split in half, or to exclude or include lots of a half-acre or less. In Hunter's case, Duke approved moving more than 100 acres of property out of the critical watershed area—a decision that should have gone through the county and state.
Duke, who is now the planning director in the city of Norfolk, Va., says he was working by the book.
"It was a process that Durham County had been using for years," Duke said. "I was told by Luck that this was simply the process that we used. I had no reason to question him."
However, the response to Hunter specifically referenced the UDO, which was brand new at the time and which Duke helped craft in his role as planning director. Luck, who is now the assistant planning director in Durham, did not respond to calls and e-mails seeking comment.
After months of discussing in closed session Duke's "inappropriate" action, as it was deemed by the county attorney, the commissioners last week had a chance to commission an independent, comprehensive survey that would answer questions from DWQ about the technical deficiencies of Hunter's survey—and its appearance of a conflict of interest. Yet, a majority of the board balked at the price tag of $95,000.
"[To think] that we would take this amount of money and just pour it into a surveyor?" Vice Chairman Michael Page asked. "I can't even believe we're having this discussion."
The board had been having the discussion for months—in closed session—to decide whether to approve a new survey, on the recommendations of County Engineer Glen Whisler and County Manager Mike Ruffin. In August, the state's Division of Water Quality informed the county that Duke had violated state code, and requested additional survey materials.
"It appears that Durham acted outside its authority when it adjusted the normal pool location and watershed boundaries around the eastern portion of Jordan Lake without first seeking the necessary federal and state approvals," the state's watershed protection program coordinator, Julie Ventaloro, wrote.
Furthermore, Ventaloro wrote, state water quality protection officials could not accept Durham's current watershed map and that, in fact, "use of its current watershed map by Durham could constitute a program deficiency."
On Nov. 10, the board voted in closed session to submit Hunter's surveys to the DWQ for inspection. Two weeks later, Ventaloro responded by questioning the "relatively large gap" between the survey's plot points.
Page, the vice chairman—along with departing commissioners Lewis Cheek and Phillip Cousin—argued at the Nov. 24 meeting that submitting Hunter's surveys, and answering DWQ's questions, was sufficient for now. Instead of correcting Duke's actions, the commissioners insisted that environmental protections for a critical water supply was not urgent, and voted to pass the problem onto the incoming board, which was seated this week.
"I don't think we should get into budget ordinances and amendments in order to spend $100,000 that we really don't have right now," Cheek said, in moving to defer action. "Frankly, and I'll be very candid, I feel very uncomfortable getting involved with that, given that this is my last night as a member of the Board of County Commissioners."
Yet Cheek, a one-term commissioner who did not seek re-election in 2008—but in 2004 received his largest campaign contribution, $2,000, from Hunter—had joined his colleagues in approving, unanimously, more than $15 million in new payments earlier in the same meeting.
"Why would we invest $100,000, when we are faced with the situation we are in, and we are waiting for those surveys to come back?" Page said. "They are credible, licensed surveyors. Why would somebody use someone if they were not? It has no validity to it."
While Cheek and Page offered budgetary and logistical rationales for their opposition—insisting the board should wait for DWQ to formally denounce Hunter's survey, and arguing that the county could not afford a $95,000 expense—Page said he felt personally slighted by Planning Director Medlin's decision to restore the watershed boundary back to its original location.
"Because of the way I feel that this has happened, I'm not voting for this to be sent," Page said, criticizing Medlin for both reversing Duke's ruling and for not disclosing his decision to commissioners earlier.
Cousin read aloud a statement about "acting in good faith" before voting against the independent survey.
While not mentioning Hunter by name during the meeting, Page repeatedly berated Medlin for placing Hunter's property back in the critical watershed area.
"Needless to say, I'm really disappointed. I feel disrespected," Page said, in a theme he repeated several times during the night. "To be frank with you, this property really was discussed in closed session—and it's really under investigation. We did submit a survey for it. So why would someone go and change the map on this?"
Cousin chimed in: "It seems as if an action that was deemed inappropriate because it was made unilaterally has now been corrected by another unilateral decision."
Medlin said that the revision reflected his obligation "to ensure that the maps do reflect what was, in fact, the legal status at that point."
Southern Durham Development now owns the 164 acres at issue, having paid Hunter roughly $18 million for it in January 2008. Hunter is a minority shareholder in the company; Tyler Morris and Alex Mitchell are the majority shareholders and the primary decision-makers, according to Patrick Byker, the firm's attorney.
In addition to Hunter's contributions to Cheek's campaign, all three of the partners made political donations to the 2008 campaign of Commissioner-elect Brenda Howerton, who received $500 each from Hunter, Morris and Mitchell. (Reckhow and Heron, who both voted to reject Hunter's survey, received $500 and $200, respectively.)
Meanwhile, Melissa Rooney, co-chairman of the Fairfield Community Awareness Committee, a neighborhood organization in South Durham, expressed dismay at the commissioners' vote.
"Public trust on behalf of the civic responsibility of the Board of County Commissioners is to look after the citizens, our water supply, and make sure things are done independently, that there is no conflict of interest," she said. "That is your civic duty to your citizens. I'm very disheartened tonight."
A final decision on the surveys is pending, Ventalaro says. For Southern Durham Development, everything is riding on DWQ approving Hunter's version of the map.
"For the line to be changed back, that would mean that this project would not be able to move forward," Byker said.
At the Nov. 24 meeting, Heron posed a more sobering question: "Maybe this particular survey will turn out to be correct. But let's make sure it is. Otherwise, we are opening the door for every developer out there to do their own survey. Then what are we going to have? A cotton-pickin' mess. And we'll be drinking that water one day."
UPDATE (Dec. 5, 2008): After this story went to press, the Indy obtained a letter that Neal Hunter wrote to the N.C. Division of Water Quality, questioning the agency's authority to review local government's changes to the protected watershed areas surrounding lakes and streams. The letter, dated Nov. 26, comes just two days after the Durham County Board of Commissioners rejected an independent survey of Jordan Lake.
"Frankly, under these circumstances, I don't understand why a submittal to DWQ was necessary since the state's critical area interests were protected by Durham County's larger 1-mile critical area," Hunter wrote to Julie Ventaloro, the state's watershed protection program coordinator.
Durham County's 1-mile critical watershed boundary is stricter than the state's required half-mile radius, and a private survey that Hunter commissioned in arguing to have his property excluded from the extra protections—which is under review at DWQ—affected just the county's line. Yet, according to North Carolina's administrative code, all watershed boundary changes—including "local government's interpreted critical and protected area boundaries"—must be vetted through local governments, submitted to DWQ, and approved by the Environmental Management Commission.
"I think it's pretty clear," County Attorney Chuck Kitchen said Dec. 4.
In his letter, Hunter insisted, "This is a simple matter of the county following its own ordinances approved by the elected governmental bodies."
But Hunter's survey did not go before the Board of County Commissioners until nearly three years after the former city/ county planning director, Frank Duke, approved it. By contrast, in 1998, commissioners approved conducting a taxpayer-funded survey of Ellerbee Creek to re-evaluate the Falls Lake tributary's critical watershed area. Hunter referred to that survey in his letter, quoting a DWQ employee who informed the county that it was unnecessary to issue a reclassification to its watershed ordinance as a result of the survey's findings.
However, Hunter falsely implied that DWQ's response to the Ellerbee Creek survey meant that state review was unnecessary in the first place, according to Kitchen, the county attorney, and Ellen Reckhow, the commissioners vice chairman. In an interview, Reckhow confirmed that the county submitted its Falls Lake survey results to DWQ.
In arguing that redefining Jordan Lake's critical watershed boundary would have relatively little impact, Hunter spelled out one key difference between the county's survey of Falls Lake and his private survey of Jordan Lake: his vested interest in the results.
"In fact, the Jan. 6, 2006, action impacted only 14 parcels, 11 of which I owned or had under contract at the time," he wrote.
Meanwhile, in a Dec. 5 interview, Steve Medlin, Durham's planning director, said that although Hunter's properties would receive fewer regulations as a result of his survey, hundreds of property owners would in fact receive more regulations, due to a counterintuitive redrawing of Jordan Lake's basin area. Roughly 350 southern Durham properties would be moved into Jordan Lake's five-mile "protected" watershed area—a less strict extension of the one-mile "critical" watershed—potentially limiting their future development.
"The most significant [effect] would be the potential limitation on the amount of impervious surfaces which could be constructed on any of those properties, limiting them to potentially a maximum of 70 percent per parcel in the protected area," Medlin said.
Impervious surfaces are artificial structures, such as rooftops and roads, which prevent the absorption of rainwater. Durham's critical watershed area restricts impervious surfaces to between 6 and 9 percent per parcel, while properties outside both watershed areas have no such restrictions. Hunter's survey would move the 751 Assemblage project from the critical watershed to the protected watershed, allowing the property to be developed roughly eight times more densely.