Zoning dilemma arises from failed project

It wasn’t supposed to turn out this way.

Nearly 400 high-end homes were supposed to be built along the northern coast of Lake Norman in Lincoln County, and Burton Creek Estates was supposed to be a crown jewel of development in the area.

That never happened.

The economy tanked and developer Victory Development Group, of Monroe, declared bankruptcy last year after trying since 2006 to make the 385-home project a reality.

Now Lincoln County commissioners have a decision to make: rezone the 250-acre site and risk losing environmental protections for the huge chunk of land, or leave the zoning as it is and risk the site sitting vacant for possibly years.

There have long been environmental concerns about the project’s site, on which trees were torn down to make way for the homes. Residents have complained about sediment being found in coves near their properties. Some residents suspect the Burton Creek Estates project is to blame.

“We’ve had issues with the environmental conditions on the property, and we’re not sure how much sediment got in the lake from that property and how much was natural, but there is definitely more than there was before,” Commissioner George Arena said.

With the project up in smoke, commissioners are considering changing the conditional-use planned-residential zoning for the site and returning it to a residential single-family district — what it was before Victory went bankrupt.

Lincoln County zoning administrator Randy Hawkins said commissioners revoked the conditional-use permit for the development in June when Fifth Third Bank, the new owner of the site, did not put up a $500,000 bond, which was required of Victory.

Fifth Third is appealing the loss of the permit. Without it, the bank cannot sell the site to a developer who might want to use it to build a subdivision.

Arena says rezoning the site would be a bad idea, because it would open the door to multiple developers to build homes on the land. The county might not be able to get individual developers to agree to performance bonds and letters of credit to ensure that waterways would be protected from sediment running off the site thanks to any future development, he said.

“If we went back to SFR (single-family residential zoning), we might not be able to work with those individual developers to put that overall condition on those smaller pieces,” Arena said.

Charles Krawitz, the Fifth Third Bank representative working with the town, declined to comment for this story, citing the pending appeal.

The property is on the south side of Webbs Road, the west side of Burton Lane and the north side of Blades Trail in the Catawba Springs Township of the county.

Ground was broken in 2006 on Burton Creek Estates, but not a single house was ever built.

County commissioners were wary about the project and at the outset required Victory to put up a $500,000 bond or letter of credit in case of sediment running into the lake as a result of the construction.

“They did a lot of grading and put in some streets and infrastructure and recorded the first 22 lots,” Hawkins said. “And then…”

And then the economy drove off a cliff. Demand for houses dried up and the subdivision became just another project that fizzled out in the downturn. Last year, Fifth Third foreclosed on the property and became its owner.

Bank representatives told county commissioners in May that they hoped to sell the land to another developer.

But there was a problem: The bank didn’t feel it needed to comply with the bond requirement.

“The bank said the condition of having the $500,000 bond was only for a developer, and since they were not a developer they didn’t have to put up the bond,” Hawkins said.

Hawkins said the bank applied to get the bond requirement eliminated or the amount reduced, but the commission rejected those requests. In June, when the bank did not put up the bond, commissioners revoked the conditional-use permit for the development, he said, despite concerns of those like Arena.

Hawkins said that with no subdivision actively under development at the site, there was no approved plan for the project on the books with Lincoln County.

“The (planned-residential) zoning had no meaning, so we proposed to rezone it back to the regular zoning district that it had been previously,” he said.

Now, the county is waiting to hold a hearing on the bank’s appeal, for which Hawkins said no date has been set. Although the county’s planning board has recommended that commissioners wait until after the appeal is considered before making a decision on rezoning, the commissioners don’t have to.

Residents of the area would likely be upset if the county does anything that makes it harder to stop erosion at the Burton Creek Estates site. As it is, they’ve attended public meetings this year, bringing along samples of muddy water they say came from their coves, to complain about sediment running off the site.

Arena, who lives near the Burton Creek Estates development and has to drive by the vacant land all the time, is disgusted with the whole thing.

“I was dismayed with the condition of the property when the developer originally cut all 250 acres,” he said. “I’m sure at the height of the market (the) intent was to sell off pieces to different developers and put in infrastructure, but now we just have a clear-cut land.”

Arena wants to wait for the results of the appeal and keep the land as one parcel. Fifth Third, too, doesn’t want the site rezoned so it can sell the land to a developer as one parcel.

Arena thinks the land could be a steal for a developer once economic conditions improve in Lincoln County.

“There are two other large developments right across from Burton Creek Estates, and the proximity to the boat launch on Burton Lane makes it a desirable property,” he said. “I think when the market comes back, that property is in a good location, and development will be able to take place.”

For now, at least, it seems development is a long ways off.

Baughmann can be reached at [email protected].