State to Sue Woodlake Over Dam Neglect

 By Jaymie Baxley, Staff Writer , The Pilot January 27, 2016

The state of North Carolina, having finally grown tired of the excuses and inaction by a German company to fix the dam that once held in the lake at Woodlake Country Club, will go to court to force action. North Carolina Attorney General Josh Stein is pursuing a court order that would force Woodlake CC Corp. to comply with a safety order issued in November by the state Division of Energy, Mineral and Land Resources, said Laura Brewer, director of communications for the attorney general’s office. Terms of the injunction will be made available after the filing, Brewer said. It could force Woodlake’s owners either to make the costly repairs to the long-deficient dam or tear down the dam and leave the lake permanently drained. A court order could also let the state to do the removal work and then bill Woodlake, but given the organization’s financial troubles, that seems unlikely. Woodlake currently owes multiple creditors several hundred thousand dollars, including two years of back property taxes. The state’s decision came after a series of broken promises made by Woodlake CC Corp., which has repeatedly assured the state of its intention to fix the numerous holes in the dam’s concrete spillway. The issues were outlined in two previous safety orders, issued in 2014 and 2015, but repairs were never made. The dam’s condition worsened in October when a large portion of the spillway collapsed after being inundated with rainwater from Hurricane Matthew. Concerns about the dam’s stability led county officials to issue an evacuation order for the area downstream of Woodlake, forcing more than 100 families to flee their homes for a week until water levels were lowered. State water quality officials and dam regulators later ordered the controlled draining of the 1,200- acre lake, which is still described on the homepage of Woodlake’s website as the gated community’s “centerpiece.” In October, Woodlake and Geosyntec representatives sat down with Moore County officials and The Pilot to discuss next steps to repair the dam. Julie Watson, a longtime representative of the owners of Woodlake and the general manager, said the owners “intend” to repair the dam. “We are moving forward to repair the dam,” she said. “We want it to be safe. “I would rather for the lake to stay drained than for one life to be lost,” Watson said. Watson could not be reached for comment on the latest developments. A letter attached to the most recent safety order warned that Woodlake CC Corp. could face daily fines ranging between $100 and $500 if it failed to meet the repair deadlines, which required the final design for a temporary fix of the spillway to be submitted by Dec. 5. A spokeswoman at the time said that the company planned to comply with the order. But the deadlines have passed, the spokeswoman is no longer answering emails or calls from The Pilot and the engineering company hired to do the work quit this month over nonpayment. If the state decided to levy the harshest penalties, Woodlake CC Corp. would owe as much as $26,500 in fines as of Friday. That’s not counting the more than $45,000 the company owes the county in outstanding taxes. It’s also not counting the $270,000 it allegedly owes Geosyntec Consultants for unpaid services and thousands more to other creditors, such as a former dam engineer. The engineering firm recently terminated its contract with Woodlake CC Corp because of “nonpayment of outstanding invoices,” according to a letter to state safety officials. Geosyntec Consultants was originally hired in 2015 to develop a plan to fix the dam’s concrete spillway. Woodlake CC Corp. contracted with the agency after severing ties with B. Dan Marks, the engineer who had been hired years earlier to work on the dam. Marks also was owed money for his work, according to court records. The accumulation of debts has Woodlake residents worried about the company’s ability to pay for the repair project, which is expected to cost millions of dollars. In 2015, it was estimated that repairing the dam’s deficiencies would cost about $2.5 million. That figure has not been accurately revised, but officials believe the costs have escalated significantly following the damage caused by Hurricane Matthew. Residents have also voiced concern that the corporation might rid itself of responsibilities through bankruptcy. A similar play was made by Woodlake Partners LLC, the previous German ownership group that filed for bankruptcy in 2014. The bankrupt company’s holdings were auctioned off to the current owners — and the sole bidder — in 2015. It’s unclear if the injunction filing will prevent that from happening again, but it does raise the stakes: The dam’s owners could be held in contempt of court for failing to comply with the injunction.