October 29, 2008
Dear Bear Lake Homeowner,
The purpose of this letter is to bring you up to date on several issues concerning the community and its infrastructure including the docks. Many of these issues were raised at the Annual Meeting in September and we would like to bring you up to date on the efforts taken to address them. Each of these issues has involved interaction with Centex Homes and, in the case of the docks, Duke Energy. The Terramesa team has been fully engaged with each of these entities in the effort to bring our concerns to a resolution.
Throughout the process, Terramesa has maintained a dialogue with Centex Homes and has communicated the urgency of these matters to Centex. Terramesa is committed to keeping you informed. As such, a web-link has been created to provide you with the latest information and progress. This letter will provide you with a baseline of information, which will be updated via the web-link. You can reach the blog site by going to:
http://blrcommunication.blogspot.com/ . This letter will also be posted on the blog site.
Dock Issues with Duke EnergyWe first sent a letter to owners on September 17th concerning issues raised by Duke Power as to the validity of certain dock permits originally obtained by Centex. At the time, we were still researching the issues and waiting for Centex Homes to provide us with their response to Duke Power on the issues raised, so we were not in a position to provide more detailed information. However, we feel that it is appropriate to lay out for you the chronology of events that have taken place since this issue was first raised.
Since June, Terramesa has met with Duke Energy on site on two occasions. The first meeting was on June 18th. This meeting was our introduction to the situation. Duke Energy approached Terramesa on the issue due to our status as the current developer of the Bear Lake Reserve property. At that time, we were informed of the concern as to the validity of certain permits and/or docks on Bear Lake. Duke Energy Lake Management personnel provided an overview indicating that Duke had accomplished an inventory of the docks and stair facilities within the Bear Lake Reserve subdivision.
Following that meeting, Duke Energy provided written notification of the specific issues by letter, dated August 4th, which was addressed to TerraMesa. In its letter, Duke pointed to a lake management policy for Bear Lake Reserve adopted by Duke in 2003, which sets a limit on private docks per amount of shoreline. Although Duke recognized that Centex had been given a number of permits for private docks that were considered grandfathered from this policy, Duke took the position that the permits were only applicable to certain lots and that the unused permits have since expired. Duke’s letter stated that there were currently more docks within the shore frontage of Bear Lake Reserve than permitted under their current policy, and called for a plan to address this issue by September 29th.
Although the letter from Duke was addressed to TerraMesa, as the current developer of the Bear Lake Reserve project, the permits and the dock installations and alleged violations raised by Duke occurred during the ownership of the property by Centex Homes. Accordingly, we forwarded the letter to Centex Homes and requested that they be prepared to respond to Duke’s issues.
On August 23rd, Terramesa and senior Centex Homes management met on-site at Bear Lake Reserve to address infrastructure and dock issues. In preparation, the Terramesa team conducted an extensive infrastructure and dock survey documenting a complete list of concerns to be addressed with Centex Homes. As part of that meeting, the Centex Homes representatives were provided a copy of the infrastructure and dock survey findings and were given a property and lake tour identifying general and specific issues. Terramesa informed Centex Homes of the necessity to bring these items to closure and, specifically, the need to respond to Duke Energy on the dock issue by September 29th.
As a follow-up on the dock issue and, as part of our effort to develop a good working relationship with Duke Energy, Terramesa invited the Duke Energy Lake Management Representative to meet on-site on September 8th. During the September 8th meeting, Terramesa posed clarifying questions to Duke Energy and conducted an on-lake tour of several sections of the shoreline. Following that meeting, on September 17th, Centex Homes sent two representatives to Bear Lake Reserve to look for and recover any dock permit related information that may have been left behind in the construction records file. Terramesa hosted the individuals for the afternoon and provided them access to the inactive file storage area.
On September 29th, Centex Homes, through their attorney, responded to Duke Energy with regard to the August 4th Duke Energy letter. In the response, Centex Homes requested additional information from Duke Energy and expressed a desire to resolve the issue, but challenged Duke’s position on the issues.
During the interim timeframe, Duke Energy has continued to research the permitting process and the development and application of policies applicable to Bear Creek Lake. As a result, Duke Energy drafted an October 16th clarifying letter to Terramesa, which was received by us on October 20th. In the letter, Duke Energy provided very specific information on the affected shoreline sections and identified a series of actions required to bring the shoreline into compliance with the applicable Duke Energy pier and shoreline management policies. In this letter Duke modified their position to the better from that expressed in their August 4th letter, but they continue to raise concerns that we believe require further discussion.
This letter, like the one of August 4th, was passed onto Centex Homes for their use in addressing the issue with Duke Energy and with you, the affected owners. As we did before, because the resolution of the issue regards actions taken by Centex Homes and involves issues of a contractual nature, Terramesa has asked Centex Homes to develop the response to Duke Energy and to address the matter with you directly. We are working with Centex Homes to resolve this matter, and we believe that there is a good opportunity to craft a solution that will be satisfactory to all parties. Please know that we share your concern about this issue; in fact, it directly affects our future development plans so we have every interest in resolving this matter in a manner that provides for existing and future lot owners with dock access to the extent possible.
Utility Infrastructure IssuesSince acquiring Bear Lake Reserve from Centex Homes, we have learned that a number of the water lines installed by Centex Homes throughout Phase II were installed without the proper permitting from State of North Carolina, and did not receive the proper inspection that would have occurred during the permitting process prior to their being buried and put in use. We have also learned that as-built drawings showing the location of these lines were not prepared, which would have been required as part of the permitting process as well. As a result of failure to obtain the necessary permits, we have been informed by the State that no service connections can be made to these water lines until permits have been obtained and the lines have been inspected and certified.
The lack of as-built plans has also hampered our ability to install other utility lines in these areas, because we do not want to dig up the existing lines. Also, in the event that there is an issue with the integrity of the lines that have been installed, if we were to open up the trenches where these pipes are installed, we would take on the liability for any problems with the water lines, as it would not be possible to demonstrate that the line was defective prior to our efforts, and since these lines were not previously certified, this is a risk we are not willing to undertake.
We have been in contact with Centex Homes concerning this matter and they have retained engineering assistance and are preparing the necessary permit application. On October 6th, Terramesa hosted a Centex Homes representative on site at Bear Lake Reserve and provided the appropriate professional staff representatives to serve as escorts. During the visit, each water delivery issue was addressed, inventoried, and photographed. Centex Homes is keeping us informed about their progress on this matter, and we have reason to believe that it will be resolved in the coming months, so that we will be able to complete the installation of utilities to these areas.
As you can see, the past few months we have been busy. Terramesa has invested a significant effort into resources and time in the identification of and documentation of issues that concern our community. We believe that the efforts to get to a common level of understanding will benefit the community and we continue to urge Centex Homes to support speedy resolution. In the meantime, in order to keep you informed, Terramesa will support a weekly update of the previously mentioned web-link and continues its offer to host a Centex Homes sponsored information session at the Lake Club.
Sincerely,
Todd S. White
President, Terramesa Development Group
“Our Family Creating Memories for Your Family”
P.O. Box 96 - 412 Lake Forest Drive - Tuckasegee, North Carolina 28783
Phone (828) 293-7414 - Fax (828) 293-3920
www.bearlakereserve.com /
www.terramesaresorts.com
