restoring woodlake’s property tax ase - restore …to...restoring woodlake’s property tax ase a...
TRANSCRIPT
Restoring Woodlake’s Property Tax Base A Proposed Solution
The Woodlake Property Owners’ Association
The Restore Woodlake Committee
David Watterson - Chairman
20 April, 2017
Agenda
• Brief History of Woodlake
• Current Situation
• Formation of Restore Woodlake Committee (RWLC)
• Operating Premises of the RWLC
• RWLC Efforts Underway
• Requested Actions of Moore County
• Summary
Brief History of Woodlake (WL)
• WL owned from 2000 to 03/2015 by WL Partners (WLP) – Ingolf Boex owner – Julie Watson GM
• Initially WL was a vibrant, growing community – since 2009, the quality & number of WL’s amenities has significantly declined
• WLP filed for Chapter 11 bankruptcy in 09/2014 & WL was subsequently sold at auction in 03/2015 to Steiner & Co. – Woodlake Country Club Corp. (WLCCC) was created as the legal WL owning entity
• At some point, Ms. Watson via her company (J & Partners), became 50% owner of WLCCC
• Dr. Boex remains involved, as he has made a number of visits to WL & represented himself to the MC Tax Dept. as representing WLCCC in the tax arears issue
Brief History of WL (cont.)
• At the time of the bankruptcy auction & purchase, it was well know by the principals of WLCCC that the dam was under a DEQ Dam Safety Order (DSO); &, therefore, required immediate attention, with an ~$2.4M estimated repair cost
• Bankruptcy Court’s Final Sale Approval Order clearly stated 2014 MC ad valorum tax was to be paid by the purchaser
• Outcome – no dam repairs were made
– Hurricane Matthew virtually destroyed the dam; and,
– The 2014 ad valorem taxes are still owed to the County
Current Situation
• Lake is drained & a temporary full-breach plan being worked = no water covering the lakebed
– No water = dust storms are a regular occurrence
– Bottom-line – there will no lake until the dam is rebuilt
• The Maples golf course is closed & deteriorating
• The Oates House (primary club facility), its restaurant & bar have been closed since 09/16 due to a broken boiler
• WLCCC has amassed over $550K of past-due debt
Current Situation (cont.)
• Real estate is very hard to sell & values are plummeting
– Recent examples:
• WL Condo listed $100K, tax valuation $115K, sold for $50K
• Lakefront lot with a MC tax valuation $180K, sold for $90K
• Recent MC tax valuations:
– Lakefront – minus 50%
– Non-lakefront – minus 10%
• Impacts – overall reduction of just over $27,000,000:
– $125.55K annual MC property tax lost,
– Fire District, annual $22.95K; lost; &,
– WL POA annual assessment $83.7K lost
Th Bottom-line – there will BE no lake until the dam is rebuilt
Dam Status • Temporary full-breach is imminent = empty lake
– Breach width: 459’ – spillway width: 273’ = +186’ – based on Schnabel’s preliminary approach, yet to be approved by DEQ
Right Outflow
pipe
Approximate width &
location of the proposed breach - 459’
Spillway 270’
Left Outflow
pipe
Who We Are
• The Restore Woodlake Committee was created by & under the authority of the Woodlake Property Owners’ Association (POA); a N.C. non-profit organization representing approximately 750 Woodlake homeowners, owners of ~1,500 Lots, & ~$230M in real-estate
• The Committee was formed to actively influence those who will ultimately decide the fate of the dam, as well as developing & evaluating alternative solutions to restore the dam & lake
Operating Premises of the RWLC
• Current WLCCC ownership has demonstrated a lack of willingness or wherewithal to make necessary investments to save the WL Community from the current morass & position us to be a growing, vibrant community
• Therefore, we must attempt to take control of the assets of greatest importance to the community, i.e., the dam, lake & marina
– We must be prepared to make the needed investments to rebuild & maintain the dam
RWL Efforts Underway
• Filed a Court motion to Intervene in the N.C. AG/DEQ vs. WLCCC case
• Sent letter to WLCCC ownership from our attorney requesting the opportunity to discuss the future of WL, as we believe we have shared objectives – NO RESPONSE
• Established a subcommittee to develop business plan & recruit potential partners in an attempt to purchase some or all WLCCC assets – in progress
• Established contact & in active discussion w/Richmond County Manager to gain full understanding of the process they used to save the Leadbetter dam & lake
• Retained an attorney to explore legal options
Requested Actions of Moore County
1. Moore County Forecloses on Woodlake properties for accrued back taxes – that’s THE linchpin to increased Woodlake property tax revenues
2. Moore County helps Woodlake residents finance (via a bond), & PAYBACK IN FULL to return of the dam & lake to full viability & the return the Woodlake community to a robust & growing County tax base – details on following slides
Desired Outcome
• Linchpin to any Woodlake tax revenue improvement is a functional dam & lake
– MC forecloses on WL property
• WL home owners, via a NC registered non-profit, purchase:
– Lake, dam & marina – quid pro quo, the purchaser fixes the dam & lake
» Key to a successful outcome is how MC “packages” the foreclosed property, so WL property owners can successfully bid on the dam, lake & marina
How We Could Pay for That • MC provides repair/reconstruction financing for the dam by
creating a “Special Assessment District,” per Article 9A of G.S. Chapter 153A (petition required signed by majority of property owners within proposed district, who must own at least 66% of value of all properties within district)
• Use assessments from that Assessment District to retire the TOTAL cost of the revenue bonds issued by MC to fund rebuilding of the dam
– Terms and duration of bonds and assessments TBD, but NO COSTS imposed on Moore County taxpayers outside Woodlake
• Use Richmond County as a model - seek slight modification of legislation obtained by Richmond County to clarify that Moore County has same authority as Richmond County to create Assessment District
How We Could Pay for That – A Scenario
• A payback scenario at a 3%, 20 year bond payoff:
– 550 properties bordering the lake
• Bond: $6.0M –
– Dam repair cost: $6.0M
– Legal & Interest: $399,310
• Payback based on land MC assessed value
– Rate: $100 X 1.49234 - Range of annual assessments:
» $346 to $3,338 for the most expensive properties - most likely: ~$1,119
Desired Outcome
• Impact on property values & community development, growth & improved tax revenue
• Existing homes in 2017
– Year one – minimal change
– Year two – 25% increase
– Year three – w/repaired dam – 40% increase
• Additional building + existing homes in 2019
– Year one – 10% increase
– Year two – 20% increase
– Year three – w/repaired dam – 30% increase
WCC Residential Lot Values with a Viable Lake
Lot Values North
Lot Values South
16
Lot Values - North Lot Values - South Lake/ Pond/Golf
1 x 50K
Lake/ Road 7 x 15k 5 x 90k 5 x 120k 1 x 70k 1 x 150k
Lake/ Dirt 3 x 22k
Pond / Road
4 x 15k 2 x 20k
Golf / Road 2 x 20k 9 x 30k
13 x 40k
5 x 50k
13 x 15k
18 x 20k
4 x 25k
Interior / Road
7 x 30k 7 x 30k 20 x 10k 81 x 12k 15 x 15k
9 x 25k
Interior / Dirt
39 x 10k 3 x 15k 321 x 5k 145 x 7k
Total Woodlake Residential Lot Real Estate Value - ~$7.5M
Residential Lots/Land Commercial Land
Available residential lots in WL
Development - Anderson Creek development a
good growth template
Excellent Condo Locations
Dam Rebuild Cost Estimates
• Repaired dam must meet current DEQ criteria. i.e., effectively control a 22.9” rain, in a 24-hour period
• Old criteria – was 10” rain in a 24-hours period
• While the post-breach dam rebuild design approach & specifications are TBD, in a conversation, DEQ opined that the post-breach dam rebuild construction cost could be around $10 million
• The WLCCC or DEQ funded breach provides a rebuild cost savings, in that the some of required excavation would be completed, as would the disposal of excavated material
Summary of proposed Actions
1. RWLC & MC Tax Dept. work together to define a foreclosure approach that eliminates any risk to the County & provides RWLC the opportunity to purchase foreclosed properties, i.e., at least the dam, lake & marina + any properties required to readily access the dam for inspection, maintenance & repair
2. RWLC raises sufficient funds to purchase foreclosed property at auction
a. A RWL, LLC has already been established
3. In parallel with action 1, the County requests legislation similar to the Richmond County legislation, affording the County the authority to establish an Assessment District
Summary of proposed Actions (Cont.)
4. MC commits to issue a Revenue Bond to fund dam repair when
necessary
5. Once RWLC acquires the necessary properties, the process for
establishing a WL Dam Assessment District begins
6. MC initiates the process for approving & issuing a bond & makes
funds available to rebuild the dam
7. The dam is rebuilt & the lake restored
8. The Bond is repaid in full (over the life of the bond), by the
applicable WL residents via their Assessment District payments
9. The County wins, the WL property owners win, potential golf & real
estate developers win & future residents of WL win.
10. WL returns to a growing & reliable tax base
Overall Summary
• The current WL situation is not good for its residents, nor Moore
County, or the State of N.C.
• With a viable lake, WL’s potential property tax base is best
compared to the growth experienced at Anderson Creek, or
Whispering Pines
• There is a logical, legal & viable path forward
• The Special Assessment District bond approach won’t be easy, or
without challenges, but it would be a win-win for the County & WL
property owners
We thank you for this opportunity & are prepared to respond to your questions/comments
Back-Up Slides
Woodlake Geographic Orientation
On this slide, briefer makes comments to
make the point that WL is well
positioned close To Ft. Bragg, & MC shopping & entertainment
locations
Watterson
Woodlake’s Moore County Floodplain - ~100mi2
Moore County’s suburban development vs. farmland has increased the amount & speed of the water run-off
WL Dam
Watterson
Woodlake Development Orientation
Briefer provides
verbal orientation
Watterson
Woodlake Residential Lot Sales
Lot Sales 2006-2008 Lot Sales 2015-2017
26
89 Total Lots sold Lake - 11
Pond - 4
Golf - 15
Interior - 59
13 Total Lots sold* Lake - 1
Pond - 3
Golf - 5
Interior - 4
2 Lots since Hurricane Matthew
* Two lots were sold to J & Partners, i.e., Julie Watson
Reasons to Care
• The Woodlake Community has a large & active voting population
• Properly managed & maintained dam = excellent flood control & management of its 100mi2 Cranes & Cypress Creeks’ watershed
• The lake is an excellent ecosystem for numerous resident & migrating species
• The lake is a back-up water source during the inevitable N.C. summer drought season
• The Woodlake development has ~600 "buildable" lots that become desirable home building locations if the lake is restored, which could translate to $100Ks of additional property tax revenue for the county