This is a road trip that takes many sad turns.
Start on Jack Bennett Road in rural northern Chatham County. The paved ribbon passes cozy homes settled on rolling farms, battered trailers shrouded by bare trees and abandoned buildings crumbling into the underbrush.
And then you reach Westfall, originally known as Booth Mountain. Westfall's 310 acres were clear-cut to make room for 182 homes whose $500,000 sales price would have included breathtaking views of a wooded valley. Yet today, the only completed structure is a wastewater treatment plant tucked into the hillside, its clay basin guarded by knee-high brambles and chain-link fences.
But wait, there's more: Seven miles southwest of Westfall on Bynum Ridge Road, another ghostly subdivision takes shape. Near a herd of cattle grazing on a rock-strewn hillside appears The Retreat on Haw River, its gated perimeter emblazoned with a No Trespassing sign. The Retreat's developers, Crescent Resources, now bankrupt, had planned to replace the 650-acre forest with 185 homes worth $800,000 each. However, today there are no families coming home from work, no kids playing in the yard, no couples walking their dogs at dusk, only silence occasionally punctured by cawing crows, rustling leaves and the thundering hooves of spooked deer.
Head west near the Haw River. Between Old Graham Road and N.C. 87, The Parks at Meadowview's imposing thick stone gates open to what would have been an "executive" community of 715 homes—complete with a butterfly park—on 793 acres. Now only 12 empty spec houses are huddled near the entrance.
This is the legacy of former Chatham County Commissioner Bunkey Morgan, who, abetted by his growth-hungry allies, ramrodded close to 50 subdivisions through the county's planning approval process from 2002 to 2006 (2004 and prior, 2005, 2006). Morgan and company promised the developments would translate into millions of dollars in revenue for the county, sparking new school construction and other public projects.
But the pro-growth cabal didn't plan on the housing bust. Now nine large luxury subdivisions—which would have included a total of 1,921 homes on 3,238 acres—are foreclosed on, stalled or bankrupt (download PDF map and table). And all were unanimously approved during the Morgan era by the Chatham County Commissioners and the planning board.
Five years later, the land remains untouched or worse: Forests were cleared to accommodate homes that never materialized. In some developments, only a dozen empty houses are parked on a rural outpost where the sidewalks abruptly end. At other subdivisions perched near Jordan Lake or the Haw River, runoff from the construction site has polluted the water.
As for the tax base, the county has fallen far short of the nearly $1 billion it had planned to add as a result of these vast developments. And although Morgan has been out of office for four years—he lost his re-election bid in 2006—Chatham County is stuck with these vacant or half-developed acres.
"We do not have a written plan to remedy the situation," said George Lucier, chairman of the Chatham County Board of Commissioners.
Even if the commissioners had a plan, it would be hard enact. Last year, the homebuilders lobby succeeded in persuading the state legislature to pass House Bill 1490, which prohibits counties, including Chatham, from imposing new, more stringent development standards on these old, bankrupt subdivisions for at least three years.
Morgan is unrepentant about the ramifications of his pro-growth policies, telling the Indy last week: "They say one man's misfortune is another man's gain."
Perhaps the most apt symbol of the misfortune in northern Chatham County is Belmeade Farms. A project formerly owned by Charlotte-based luxury real estate company Crescent Resources and developer Patrick O'Neal, Belmeade was planned as a 565-acre equestrian community embellished with million-dollar homes.
But Crescent went bankrupt; not a single house was constructed. But the property has found new life for the dead. Last February, the Chatham County Commissioners approved a plan for Belmeade Farms to become Belmeade Cemetery and Memorial Gardens.
In addition to the Belmeade graveyard, Crescent Resources is responsible for two more bankrupt subdivisions: The Retreat on Haw River and The Parks at Meadowview. They were originally known as Williams Pond and the Sanctuary at Haw River and Meadowview, respectively. (Like a person seeking a new identity, the subdivisions have changed their names.)
These two high-end projects initially were developed by Wake County-based Robert Swain, Thomas Fonville, Frank Robusk and John Morisey, key members of the real estate industry. As the Indy reported in a series of stories from 2002-2006 (see links at right), development interests contributed more than $13,000 to Morgan and other pro-growth commissioner candidates. Fonville and Morisey and their wives pitched in more than $1,200 to Morgan and fellow commissioner candidate Carl Outz.
(These figures come from the Indy's previous coverage; the Chatham County Board of Elections has since destroyed most campaign finance reports dated prior to 2008; it didn't keep electronic copies. State archives policy permits counties to toss campaign finance records two years after the last election cycle. Visit the State Board of Elections Web site to see who receives money from the N.C. Home Builders Association political action committee.)
But when Crescent Resources, a joint venture between Duke Energy Carolinas and Morgan Stanley, began moving aggressively into the Triangle, Swain and company signed over their speculations to the deep-pocketed realty group.
Swain and company's fortuitous move proved to be Crescent's undoing. Crescent overestimated the demand for gated luxury communities. Last June, it filed for Chapter 11 bankruptcy, owing more than $1 billion to contractors and banks, according to federal court documents.
Crescent did not return repeated calls from the Indy seeking comment.
Builders in those subdivisions also are hurting. They constructed their homes to Crescent's exacting specifications, but in this housing market they can't recoup their investment, even if the houses do sell.
"We spent $600,000 on these homes' construction line. We might be able to sell the house for $250,000, leaving us liable to the bank for $350,000," says one local builder, who asked not to be named for fear of retribution from Crescent.
"Pleading with Crescent is useless; they just shrug their shoulders and throw up their hands. They've disconnected the Parks number," said the builder, who owes his bank $1 million in construction loans but cannot sell his homes. "We've tried the legal course of action, but Crescent is so big—it has bigger and better resources than us builders, and they have protected themselves so we can't get their help. Our best course of action right now is prayer."
The 650 acres at The Retreat on Haw River have been partially developed, but construction has stalled. Meanwhile, The Parks at Meadowview promised builders and buyers a wealthy paradise with a $10 million amenities center that was to include indoor/ outdoor pools, open space and a butterfly park. Instead, there is only a sign at the entrance and an untouched children's playground being overtaken by the woods.
The lack of action at The Parks is delaying seven more developments along Old Graham Road: Crescent Hill and Shively Tracts I, II and III, developed by Community Properties of N.C., based in Raleigh; and The Bluffs, Creekside, The Woodlands, The Glen and The Estates at Laurel Ridge, developed by Chatham Partners and Polk-Sullivan, whose managers are Fonville, Morisey, Robusk and Swain—the same people who unloaded their properties to Crescent Resources.
These developments are stalled due to a contractual dispute between The Parks and Aqua North Carolina, a wastewater service company based in Cary. Crescent Resources, developers of The Parks, anticipated it would need service for 715 homes, but they were never built. Now Aqua North Carolina is refusing to extend service to the remaining seven subdivisions until it gets its "promised" business from The Parks—which is unlikely.
Aqua North Carolina and Nicolas Robinson, attorney for The Parks, did not return repeated calls to the Indy. But in a July 2009 memo from Robinson, who also handled cases for Westfall, The Retreat on Haw River and similar financially shaky developments, e-mailed the Chatham County Planning Department on behalf of Laurel Ridge, pleading for an extension to its development schedule. In that e-mail, he confirmed the conflict between Aqua North Carolina and The Parks.