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Wednesday, 10 June 2009 19:17

Jackson uses eminent domain to take dam

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Jackson County played the ultimate trump card in the drawn-out fight against Duke Energy over the Dillsboro dam this week.

County commissioners voted 4 to 1 Monday (June 8) to use the power of eminent domain to seize the dam and surrounding land along the Tuckasegee River from Duke Energy. The move will effectively stop Duke Energy from tearing down the dam as planned. It could also send Duke back to the drawing board on a mitigation package for the region.

Counties can use eminent domain to seize private property if there is a public purpose in mind. In this case, Jackson County wants the dam and surrounding land for a park.

Recreation is accepted as grounds for eminent domain in North Carolina state law. That doesn’t mean Duke won’t challenge the move, however.

“Duke is in for the duration to remove Dillsboro Dam,” Fred Alexander, Duke’s community relations manager in the region, said in a prepared statement.

There might be little Duke can do, however, other than argue over the amount Jackson is willing to pay for the dam and surrounding property. If Jackson County says the dam and surrounding property is needed for a public park and recreation, the courts won’t get into a judgment call on whether the idea for the park is a good one or bad one, according to Charles Szypszak, an expert in public law with the Institute of Government at UNC-Chapel Hill.

“Generally speaking, as long as there is an apparent legitimacy to it, what the courts have said is they don’t look at the details of a taking,” Szypszak said.

Duke could argue that the concept of the park is a ruse, and that Jackson County has an ulterior motive for condemning the dam, however. County commissioners have alternately touted numerous reasons for wanting to keep the dam: as a piece of history, a tourist attraction, its aesthetic value, to provide green power for Dillsboro — even as a way to force Duke to pay up in an ongoing disagreement over what constitutes appropriate mitigation for its hydropower network.

But it is highly unlikely that Duke could prove Jackson’s recreation claims are illegitimate, Szypszak said.

“The court wouldn’t say ‘Well, you say you want it for this but we think you really want it for that,” Szypszak said.

The lack of merit may not stop Duke from trying, however, and potentially burying Jackson County under a mound of litigation. As Fortunate 500 company, Duke could simply outspend Jackson County until commissioners finally grow weary and give up.

Duke has no financial stake in the dam — it hasn’t been maintained and it currently isn’t producing power. When Duke had to cough up mitigation to offset the environmental impacts of its 10 other dams straddling rivers in the region, tearing down the Dillsboro dam and thereby restoring a stretch of free-flowing river was likely seen as an easy out, appeasing the paddling community and environmental agencies.

It has since become apparent just how much the dam means to Jackson County, however. Commissioner William Shelton questioned why Duke doesn’t walk away from its plans to tear it down now that the going has gotten so tough. But it may come down to a test of wills, said Jack Brown, chairman of the Green Island Power Authority in New York. Brown is one of the few that has used eminent domain to wrest ownership of a dam away from another entity and go on to operate it himself.

“Not knowing the mind set of Duke Energy, I don’t know how much they will resist,” Brown said. “They have been unchallenged and pretty much run the show. If they think this is going to be a chink in their armor, that Jackson County is going to come in and take this away from them, they may not want to set the precedent.”

How the vote went down

Duke had caught wind in recent weeks that a move was afoot to start condemnation proceedings. Commissioners were poised to take a vote on the matter last Monday, but Duke staved it off at the last minute with the promise of a counter offer.

Jackson commissioners suspected Duke would make a last-minute bargaining pitch. Just a week earlier, Duke and Jackson County had been brought together for court-ordered mediation in Washington, D.C.

“There was some interesting give and take among the participants and hopefully something positive will come from that,” Chairman Brian McMahan said last week.

Duke’s olive branch apparently fell short of commissioners’ expectations, however. When commissioners reconvened this Monday to consider Duke’s attempt at a settlement, they voted 4 to 1 to reject it.

“It wasn’t for a lack of effort that mediation didn’t work out,” Alexander said. “And I’m certainly sorry it didn’t.”

The terms of Duke’s counter-offer were not made public citing the confidential nature of court-ordered mediation.

After voting to reject Duke’s offer, commissioners had one more order of business before moving on to their big vote of the night. The first step was to formally embrace their desire for a recreational park around the Dillsboro dam. The county recently hired a planning firm, Equinox Environmental, to create a master plan for a park along the shore of the Tuckasegee River in Dillsboro. The dam is a focal point of the design. In hindsight, it’s obvious the county’s intention in drawing up the master plan at a cost of nearly $20,000 was to set the stage for condemnation of the dam and river shore.

A motion to “adopt the major concepts of the Dillsboro Heritage Park” passed with a unanimous vote.

Commissioner Tom Massie, who disagrees with the continued fight against Duke, put aside his dissent to back the conceptual idea for a riverfront park in Dillsboro.

Commissioners then forged ahead with the long-anticipated motion that many in the audience were hoping for.

“I will move that Jackson County institute an eminent domain proceeding to acquire title to the following property for the public purpose of establishing a water front park and recreation facility along the Tuckasegee River and preserving the Dillsboro reservoir,” Chairman Brian McMahan said. McMahan proceeded to list several pieces of property Duke owns along the river shore around the Dillsboro dam, along with the dam itself.

Massie pointed out that the land along the riverbank owned by Duke is already slated to be turned over to the county following dam removal, as Duke would no longer have a use for it once the dam was gone.

The vote to condemn the dam was well orchestrated. Commissioner Joe Cowan made the motion to reject Duke’s counter-offer. Commissioner Mark Jones made the motion to adopt the concepts of the Dillsboro river park. And Commissioner Chairman Brian McMahan made the motion to seize the dam with eminent domain.

The commissioners cited what they call overwhelming support from the people of Jackson County to take this step. Jones cited an online poll by the Crossroad Chronicle newspaper in Cashiers with 78 percent of respondents supporting the county’s fight.

“I’ve heard those same statistics throughout the county as I have worked very hard to ask people their opinion,” Jones said.

Jackson County has proved a tough customer in the fight against Duke Energy. For Commissioner Cowan, standing up to corporate power runs in his blood. His father helped organize the workers at Mead Corporation to form a union decades ago and bring about a fair wage, he said.

Cowan compared his father’s fight to the one against Duke today.

The commissioners have met an untold number of hours in private sessions over the past three years to discuss the drawn-out legal wranglings against Duke. A new face has claimed a seat at the table recently, however. Gary Miller, a Bryson City attorney, has been present at the past three closed sessions. This week, commissioners announced Miller will be their legal counsel on the condemnation proceedings. Paul Nolan, the D.C.-based attorney who specializes in hydropower issues, will continue in a peripheral role as well.

Duke still has two pending legal challenges against Duke. One is an appeal of a state water quality permit that paves the way for dam demolition. Another is an appeal in the U.S. Court of Appeals. Both of those cases will likely be put on hold as eminent domain plays out.

Whatever it takes?

Jackson County has spent around $250,000 in its opposition to Duke over the past five years. The majority has been on legal fees, but some has been for environmental consultation.

In his lone dissent to condemnation, Massie argued that it is time to stop the bleeding.

Massie advocated continuing down the road of mediation, citing a glimmer of hope in the offer Duke already made.

“While it is not what I would have hoped for, Duke has finally made some movement in our direction,” Massie said. “A bird in the hand is better than a bird in the bush.

We are a whole lot better off taking it now and cutting our losses.”

Massie told Duke it wasn’t too late to make the county a better counter-offer, that there was hope yet the commissioners would back down.

“I sincerely hope the action we have taken here today will encourage Duke to come back to us and negotiate some more so we can avoid going through with this proceeding,” Massie imparted to Duke following the vote Monday.

Commissioner William Shelton said he doesn’t understand why Duke won’t agree to a compromise. If Duke would turn over the dam to the county, it could walk away from the fight.

Shelton said the expense of a potentially protracted legal battle was the only thing that gave him pause in his decision.

“The only reservation is the David and Goliath factor. Can we beat Duke and can we afford to beat Duke? But I choose not to have a defeatist attitude,” Shelton said.

McMahan said the cost of giving up the fight is greater than the cost of continuing. He cited the loss of tourism in Dillsboro, the loss of an historic icon, the loss of a popular fishing hole, the loss of an aquatic ecosystem, the loss of green power. The cost of the fight to save the dam pales in comparison, he said.

“It is a small cost to pay to preserve something that is so precious to us,” said McMahan, who grew up fishing around the dam.

Duke’s new permits could last for 30 years or more before the region has another crack at exacting mitigation from the company. McMahan said the county’s chance is now or never.

John Boaze, owner of Fish and Wildlife Associates, shared the latest generation figures off Duke’s 10 hydropower dams in the region. Boaze estimated Duke brought in $33.7 million in revenue off its hydro operations in WNC, for a profit of $6.8 million.

Last week, commissioners learned that Duke Energy was donating $1 million to study the effect of rising sea levels on the Alligator River National Wildlife Refuge. The donation sent a message to Jackson leaders that Duke, a Fortune 500 company, has money at its disposal to offer Jackson County a better deal than it has.

River park a public good?

Dillsboro merchants and residents have become regulars at Jackson County commissioners meetings over the protracted fight against Duke, appearing to both prod and applaud the commissioners in their effort, often appearing with the most recent stack of signed petitions voicing support for the fight.

Shelton said he had to look at the long haul for Dillsboro. The mountain hamlet of galleries, craft shops and gift stores lost a major source of foot traffic when the Great Smoky Mountains Railroad stopped running trains to the town.

“I see a town that is struggling mightily right now,” Shelton said. “If you look at the long-term investment on this concept, it could be an economic development tool for Dillsboro looking into the future.”

Susan Leveille, an artist and owner of Oaks Gallery in Dillsboro, said the town has taken a hit from the loss of the train coupled with the economy. The river park in Dillsboro and preservation of the dam will provide a much-needed focal point and amenity for the town, she said.

“I think it will serve all of us in the county very well,” Leveille said.

Teresa Dowd, the owner of West Carolina Internet Café in Dillsboro, said a public park anchored by the dam is needed desperately.

“When you go to other towns with waterfront that is being utilized, the park generates so much interest among tourists and the locals. It is economically beneficial,” Dowd said.

Commissioner Joe Cowan said the river park around the dam will set Dillsboro up to prosper.

“If you back off and look at it over the long run, the benefits to Jackson County and Dillsboro specifically call for this action,” Cowan said.

McMahan questioned what the river would look like if the dam was gone. If the dam is torn out, the water level in the slow moving backwater stretching for eight-tenths of a mile behind the dam will drop.

“If they jerk that dam out and leave a big mud flat and Dillsboro looks like a bomb hit it, what’s the cost to our tourism economy?” McMahan said.

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