Current Status of the Seven Falls Development
In the lawsuit regarding the disposition of the proceeds of the bond (which secured the developer’s performance of certain improvements in the Seven Falls subdivision areas), the County has filed a motion to be allowed to “request proposals” (bids) on the work covered by the bond referred to on this website. A copy of this motion is being mailed to all the parties in this lawsuit.
If the County’s motion is granted, the proposals will be for the completion of the work shown on the maps below as a whole, or in (many) separate parts.
In the event the cost of all the work is greater than remaining bond proceeds, the County will propose a lesser scale of work, so that the work done will provide the most benefit to the most property owners inside the subdivision as possible within the limits of the bond proceeds. However, the final decision on the final plans and contracts will be the Court’s, and all owners of property within the subdivision areas, and those with an financial interest in such property (that is, lienholders on the property) can propose alternative plans to the Court.
Brief History of the Seven Falls Development
In 2007, Henderson County received an application on behalf of Mountain Development Company, LLC, developer, (later renamed Seven Falls, LLC) for the Seven Falls Golf and River Club. The Seven Falls development is located at Pleasant Grove Road and Pleasant Grove Church Road and included 40 different parcels of land totaling 1,398 acres. The applicant originally proposed a total of 900 residential units which included 700 single-family lots, 164 town homes and 36 condominiums, including a golf course, recreational uses, club service uses and community service uses. The developer entered into a development agreement with the County to allow the developer to proceed with the Seven Falls development for a certain period of time under specific terms and conditions regardless of whether there is a change in land use regulations. The developer requested to be vested for a period of five years. In exchange for that vested right, the developer agreed to build and donate a new fire station and construct several miles of trails.
On July 2, 2007, Henderson County and the developer entered into a performance guarantee agreement which provides financial security to complete proposed infrastructure improvements and allow the developer to record and sell lots before all the required infrastructure is complete. The improvement guarantee includes roads, water and sewer infrastructure, but does not include the golf course, club house and other amenities. The purpose of an improvement guarantee is to ensure that the bonded infrastructure is completed in case of default by the developer.
In June of 2010, Henderson County declared that the Seven Falls development was in default of the performance guarantee and the developer failed to complete the required infrastructure improvements. Since June of 2010, the County is actively pursued all legal avenues available in order to obtain the bond money designated to complete the infrastructure improvements within the Seven Falls development.
In October of 2012, Henderson County reached a settlement with Lexon Insurance Company regarding the bond provided by Lexon for development work on the Seven Falls Golf and River Club subdivision. The County has received the $6 million bond funds. The Board of Commissioners discussed the Seven Falls Subdivision at its meeting on October 17, 2012. The Board reviewed an action plan for the project and took action on several items. The Board:
- Selected William G. Lapsley & Associates (WGLA) to provide engineering and construction management services. WGLA served as the project engineering firm since the initiation of the project. WGLA will complete the designs for the infrastructure, obtain necessary permits, and oversee the work of contractors.
- Authorized Planning Staff and WGLA to immediately bid out work to restore the soil erosion measures and rough grading for the bonded improvements. This will prevent further erosion while the remaining work is bid out and corresponding permits are approved. The bonded work does not include construction of the golf course. It is anticipated to bid this work out sometime in November or December 2012.
- Directed Planning Staff and WGLA to study the options for treating the wastewater (sewer) associated with the boned infrastructure. Those options include building an on-site wastewater treatment facility or connecting to other treatment facilities in the general area of Seven Falls. There are 4-5 wastewater treatment facilities in the area and downstream of Seven Falls. Staff and WGLA will report back to the Board in about 60 days.
- Approved the budget amendment to the County FY12 Budget to incorporate the revenues and expenditures associated with receiving the $6 million bond.
Click here to view the presentation given to the Planning Board on October 18, 2012 that provides a status report. This webpage was updated on October 29, 2012.
The County sought bids for site stabilization of the project area. Separate, Sealed Bids were received by Henderson County by 2:00 pm Wednesday, July 10, 2013. Submitted bids were opened and read publicly at the date and time for the furnishing of materials, labor, and equipment for construction. Click here for full bid package provided at the time.
The County received a $6 million bond to pay for roads, water and sewer improvements in the Seven Falls Subdivision. The County believes that the bond money will not cover the cost of all bonded improvements and does include fees to cover the permit and mitigation costs imposed by the NC Department of Natural Recourses Water Quality Division (DWQ) and US Army, Corps of Engineers (USACE).
The Board of Commissioners at its meeting on January 16, 2013 directed the County Attorney to send a letter on behalf of the Board to all entities with a property interest in Seven Falls Subdivision. According to the Office of the County Attorney, the County would obviously prefer a solution by agreement rather than imposition by the Court. To that end the County Attorney proposed a brief meeting for all of the entities, to be held February 11, 2013, at 3:00 pm at the Henderson County Historic Courthouse, 1 Historic Courthouse Square, Hendersonville, NC 28792. This meeting will likely be very brief, involving the County Attorney reiterating the facts and allowing all the other holders of property interest, the Corps and DWQ to attempt to set up a method of attempting to negotiate an agreement. This meeting is open to the public, but only the holders of a property interest within the subdivision, the Corps and DWQ can actually participate.
In March 2013 a law suit was filed by the County against all interested parties in the Seven Falls development that asked the Court for guidance as to how the bond funds should be spent. Included in this was a motion for Partial Summary Judgment for Emergency Relief. This motion requested the court release approximately $260,000 in bond funds for remediation, site stabilization, fixing or adding to current soil erosion measures, and seeding the grass. This motion was granted by the Court on May 7, 2013.
Click Here to view the engineered cost estimates for completing the bonded infrastructure. (Henderson County does not know the future contract price for obtaining the work that needs to be done, including fees and permit costs. The following is the best current estimate available to the County.)
Process for Completing the Bonded Infrastructure Improvements in Seven Falls
The County is ready to proceed with completing the bonded infrastructure once the money is received. The County will first need to select an engineer to complete the design work, acquire all necessary permits to complete the infrastructure improvements, and reestablish all soil erosion measures on site. In addition, a number of sedimentation and soil erosion control violations have occurred on the property. These violations have been filed by Henderson County, the Army Corps of Engineers and the N.C. Department of Environment and Natural Resources. The County will alleviate most of these soil erosion issues by completing the required bond improvements.
More information will be posted as it occurs.
County approves Master Plan (838 lots with 874 units)
County approves Phase I Development Plan (149 lots approved; 166 were originally proposed by the Master Plan)
County and Mountain Development Company, LLC enter into Performance Guarantee for Phase I of Seven Falls (Improvements to be completed on or before June 1, 2008)
County approves Phase II Development Plan (70 lots approved; 77 were originally proposed by the Master Plan)
County approves Phase I-A Development Plan and Revised Master Plan
County approves Phase I-B Development Plan Approval
|April 30||County and Mountain Development Company, LLC enter into Performance Guarantee for Phase I and Phase I-B (Improvements to be completed on or before June 1, 2008) (Replaces previous granted Performance Guarantees)|
County and Seven Falls enter into Development Agreement
Synovus Bank predecessor issues Letter of Credit with Lexon as sole beneficiary
Lexon issues performance bond
County and Seven Falls, LLC enter into Performance Guarantee for Phase I, Phase I-B and Phase II-A (Improvements to be completed on or before June 1, 2009) (Replaces previous granted Performance Guarantees)
County approves Phase I Townhome Site "A" and "B" Development Plan and Revised Master Plan
Deadline for completion of subdivision according to July 22, 2008 agreement between County and Seven Falls
|June 18||County approves Phase I Development Plan Extension request|
|July 6||Lexon executes Continuation Certificate, extending the bond expiration date to July 17, 2010|
Original bond expiration date
County and Seven Falls enter into Performance Guarantee for Phase I, Phase I-A and I-B and Phase II-A a(improvements to be completed on or before June 1, 2010 (Replaces previous
Permit Extension Act first passed, tolling deadlines until December 31, 2010 (as of August 5, 2009 Seven Falls still had 300 days to complete performance)
Seven Falls enters bankruptcy
Extended and final deadline for completion of subdivision per Performance Guarantee document
|June 2||County declares Seven Falls and Lexon in default|
|June 14||Lexon demands payment from Synovus Bank on Letter of Credit: Henderson County does, too, at about the same time|
|June 18||Synovus Bank files interpleader against County and Lexon|
|July 6||Seven Falls bankruptcy dismissed|
BOC executes resolution calling on Lexon to complete improvement or pay Henderson County the bond amount.
County answers interpleader and files cross-claim against Lexon for the $6 million bond.
Extended and final expiration of bond according to bond Continuation Certificate
Permit Extension Act Amended and Extended; tolling deadlines until December 31, 2011
Summary Judgment Order entered against Lexon for full $6 million sum
|September 16||Lexon files and serves Notice of Appeal|
Lexon Brief filed by Henderson County
|August 7||Court of Appeals issues Opinion in favor of Henderson County|
|September 10||Lexon Petitions N.C. Supreme Court for Discretionary Review|
|May 7||Court Order Granting Partial Summary Judgment and Emergency Relief filed.|