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Jackson County offers incentives to land new manufacturing jobs

Jackson County leaders are considering an economic development incentive that will provide property tax credits to Stonewall Packaging in exchange for a minimum $10 million investment in a new facility in Sylva and creation of at least 40 full-time jobs by 2010.

The new hires must make a salary of at least $39,000 per year, which is well above the county average of $27,820.

The county would provide grants of $32,500 per new job with a cap of $1.3 million. The grants would come out of property taxes Stonewall pays to the county, which would then be returned to the company. Jackson County officials who support the measure insisted on Monday that it will not be a handout.

“Jackson County decided not to do a cash outlay from our coffers,” said Commissioner Tom Massie. “This essentially doesn’t cost us anything. Without the jobs being created, we wouldn’t have gained anything at all. We’re simply providing a financial incentive.”

But Carl Iobst of Jackson County Citizens Action Group is far from convinced.

“Why is a private corporation that seems to be doing pretty good...why are they coming to the county with their hands out?” said Iobst. “They’ve been in business for a while. It seems like they could find some funding.”

Stonewall Packaging, a joint venture of Jackson Paper Manufacturing, is planning a 200,000-square-foot addition to its current corrugated cardboard plant in downtown Sylva. Jackson Paper has said that it will exceed the county’s requirements by creating 61 new jobs and investing more than $16 million. It will also receive a $200,000 grant from a state economic development incentive program.

County Manager Kenneth Westmoreland said he believed emphatically that the financial incentive would be good for the community.

“Obviously in this day and time, any new jobs are very attractive,” he said.

The county says it has worked closely with experts in formulating an exact contract for the deal.

“Everything’s in writing. There’s nothing left to chance, nothing left to speculation,” Westmoreland said.

Jackson County will accept written comments from the public about their opinions on the plan for the next two weeks before it comes to a vote.

Local authors proud of fishing trail map

Ask any fisherman what their favorite stretch of stream is and you may as well be asking for directions to the moon.

They might tell you what stream they frequent, but as for an exact spot — well, that’s between them and the trout.

For out-of-town fishermen wanting to snag a mountain trout on their vacation who don’t have hours to hang around a fly fishing shop prying locals to reveal their coveted fishing holes, the new Western North Carolina Fly Fishing Trail Map and Guide is just the answer.

The fly fishing trail spans 15 fishing spots in Jackson County, from wide valley rivers to narrow mountain creeks.

The trail guide was created by the Jackson County Travel and Tourism Authority and Jackson County Chamber of Commerce — with the help of some knowledgeable fishermen.

The trail guide doesn’t go so far as identifying the best spots on a creek, but does get the fishermen in the right vicinity.

“This way they may discover their own special spots,”

said Alex Bell, one of the authors of the trail map and a fly fishing guide. “We wouldn’t want everyone going to the right side of the creek bank 100 yards up. But as a fly fisherman you are able to read the water and look at the surroundings and you can figure out where the trout are most likely to be hanging out.”

Usually, fishermen just need to know where there is a good roadside pull-offs to access a creek without trespassing on private property. Otherwise, out-of-town fishermen are left studying dozens of blue squiggly lines on a map wondering which ones they could actually reach.

“Even if someone tells you such and such creek, you may have passed by it but they aren’t marked,” Bell said.

The other author behind the fly-fishing trail, Bobby Kilby, is famous in trout fishing circles. He’s caught trout in more than 85 of the named creeks in Jackson County. Kilby’s record makes the 15 spots selected for the fly fishing trail sound like child’s play. But Bell thinks they arrived at a good mix: relatively easy access, a variety of water and a good geographic spread across the county.

Bell, 54, retired as the principal of Smoky Mountain High School two years ago. While he now has all day to loaf around on rivers, during his career he snagged whatever fishing time he could. Thanks to the Tuckasegee running through town, he could steal a few minutes on his way home from work.

“I tell people all the time it was my chief therapy,” Bell said. “I had my stuff in the back of the truck and whenever my day finished I would head to the river. It was a way to decompress and relax.

“With fly casting it is all about rhythm and tempo. They always say there is an art and science to it and the combination of the two is very relaxing,” Bell said.

WNC Fly Fishing Trail lures new anglers to Jackson streams

Alex Bell can’t resist striking up a conversation with fellow fishermen he encounters on the Tuckasegee.

But lately, he’s had a motive behind his friendly banter. As an author of the new WNC Fly Fishing Trail, Bell is eager to know just who is flocking to fish mountain waters.

One day in May, Bell was sitting on the tailgate of his truck having lunch when 14 anglers with a fly fishing club from Florida came clambering up the river bank.

“As we struck up a conversation one thing led to another and I mentioned the fly fishing trail map and one said ‘Yeah, we got it right here’ and pulled it out of their vest,” Bell recounted.

The trail guide was the brainchild of the Jackson County Travel and Tourism Authority, so Bell knew luring tourists was the whole point. But as he calculated the economic impact of 14 people spending three nights in Jackson County who came here just to fish the trail, it sunk in.

“It came full circle just how good this is for everybody,” he said.

The fly fishing trail leads fishermen to 15 different fishing spots in Jackson County, from narrow mountain streams to wide rivers. Julie Spiro, executive director of the Travel and Tourism Authority and Jackson County Chamber of Commerce, said the fly fishing trail has taken off better than she ever imagined.

“I think it has had a good positive affect on tourism here,” Spiro said. “It gets people into Jackson County to fish and spend the night and eat dinner out and enjoy some time here in the mountains.”

A testimony to its success, Spiro keeps running out of the trail map brochures. The first print run of 1,500 were gone in just two months. She ordered a batch of 5,000 in early May, but those were gone by the end of the month. In all, she’s gone through almost 9,000 in just six months.

“We mailed out thousands of maps to interested fisherman,” Spiro said

While it’s hard to know exactly how many of those ultimately make the trip, some stop into the visitor center and announced their arrival, like a man and his buddy on a recent visit from New Burn, N.C.

“He said ‘You mailed me this map and I’m here to fish,’” Spiro recounted.

The fly fishing trail has been featured around the country, from an outdoors radio show in California to a travel article in the New York Times. It’s also landed on the UNC-TV series North Carolina Now twice. Bell, 54, who runs AB’s Fly Fishing Guide Service, has booked several trips for clients who came to Jackson County after discovering the trail guide.

Spiro credits Craig Distl, a public relations specialist with the Jackson chamber, as the instigator behind the trail. Spiro has actively marketed Jackson County as a fishing destination for several years, but Distl suggested they “step it up a notch.”

The idea of a fly fishing trail is a first for the region and positions Jackson as the first county to actively capitalize on the image of a fly fishing destination.

“A lot of people are very interested in fishing all 15 spots on the trail,” Spiro said. “It gives them a sense of accomplishment that they have fished the entire trail.”

Indeed, Bell has encountered fishermen on the water checking off their maps as they go. Some said they plan to fish a few spots each year, making return trips each summer until they finished them all.

The concept of themed-trails are growing in popularity among visitors looking for a more interactive vacation. There are several themed-trails in the region: a Cherokee Heritage Trail, a Craft Heritage Trail, a WNC Farm and Garden Trail, a Birding Trail — and now a fly fishing trail.

Big developer in foreclosure as lenders call their loans

A mega developer in Jackson County has landed in foreclosure due to sluggish lot sales in the down real estate economy.

Legasus development company saw a portion of its massive land holdings auctioned off on the courthouse steps last week. The company’s business plan is not uncommon among developers: borrowing money to buy the land, market lots and build roads, meanwhile banking on revenue from lot sales to pay the debt. But lots sales haven’t been forthcoming, and the company couldn’t make its payments.

Over-extended developers have been on the rise, according to Rick Boyd, the trustee handling the sale.

Just five years ago, Boyd did an average of three to five foreclosures a month. Now, he may see as many as 40.

The day of the Legasus’ sales last week, Boyd had 20 foreclosures in one day, dashing from Haywood to Jackson to Macon counties all before lunchtime to read out lists of foreclosure notices on the courthouse steps.

While most are single homes and lots, developers with large tracts have been turning up in the mix as well.

“I have done quite a few of the developers that have over-built and got caught,” said Boyd, a real estate broker with Beverly Hanks in Waynesville. “They needed to sell so many lots per quarter to maintain their payments, and when those slowed down they didn’t have the reserves to keep up with the payments. People never foresaw they would build four or five spec homes and have them sit on the market for over two years.”

The foreclosure proceedings against Legasus are for two large tracts: a 368-acre tract on Cullowhee Mountain that’s part of the River Rock development and a 630-acre tract in Whittier called High Grove. They are two of the largest tracts Boyd has seen go into foreclosure.

In both cases, the opening bids were made by Macon Bank, the lender that initiated the foreclosure. Bidding on the tracts can, and likely will, continue for weeks. Buyers have 10 days to submit an upset bid through the court. An upset bid has to be at least 5 percent more than the previous bid.

Phone calls to Legasus’ president, Legasus’ project developer and Legasus’ primary owner were not returned.

Bidding war ahead

Few large tracts of this magnitude have changed hands since the housing boom tapered off two years ago.

The final selling price could be a sign of whether investor confidence has returned in the real estate market, according to Todd Baucom, a real estate broker with Western Carolina Properties in Cullowhee.

“This will be a big signal,” Baucom said. “The question will be how high it goes.”

Baucom predicts the current bid of roughly $5,300 an acre for the Cullowhee Mountain tract could approach $7,000 an acre by the time bidding tops out.

As for the Whittier tract, the rock bottom opening bid of $357 an acre could make for a wild ride.

“That is going to upset and upset and upset. It could go through upsets for the next year,” Baucom said. “It will be very interesting to see what plays out with that.”

It is highly unusual to see an opening bid that is so low compared to the assessed value of the property. Typically, the opening bid is put down by the bank or lender that initiated the foreclosure — in essence buying up their own debt to protect their investment.

What makes the foreclosure unusual is that Macon Bank was owed so little — only $305,000 — on a tract worth millions. Macon Bank’s initial loan to Legasus was for $400,000 in 2004 to fund development activity on the tract. Legasus had paid off some of it, leaving a debt of just $305,000.

Given the small sum that was actually owed, it seems Legasus would try hard to come up with the money and hang on to the land. Baucom surmised Legasus wanted to divest themselves of the tract anyway and therefore didn’t fight to save it.

There’s another possible explanation: more outstanding debt associated with the High Grove tract. Even if Legasus got out from under its small debt to Macon Bank, there was a much larger lender waiting in the wings: a lender of last resort known as Kennedy Funding.

Legasus had borrowed $9.5 million against the property from Kennedy Funding last April. It’s not known exactly how much of the $9.5 million Legasus ever saw, however. Kennedy only made a portion of the full loan available through draw downs. Legasus apparently never realized the full amount of the loan promised by Kennedy.

Whatever Kennedy is still owed will come out of the final sale price.

Collateral for loans

Until recently Legasus owned more than 4,000 acres in Jackson County. The majority of the holdings were in the Tuckasegee and Glenville area, where plans called for 1,800 lots in five separate gated communities spanning 3,500 acres.

In addition to the foreclosures last week, Legasus sold off 300 acres to a private investor for $10.1 million two weeks ago.

The first sign of financial trouble for Legasus appeared in late 2007 when Legasus sold off 850 acres to a private investor for $16 million.

A few months later, the company sought financing from hard-money lender Kennedy Funding for $30 million: $9.5 million using the High Grove development in Whittier as collateral and $20.5 million using a portion of River Rock as collateral.

Legasus has been adept at using its land holdings to leverage financing. Legasus has used various parcels as collateral for more than 50 loans from at least two dozen different banks and lenders to finance property, according to a search with the Jackson County Register of Deeds Office.

It is difficult to figure out just how much outstanding debt Legasus has on all its property. For starters, the loans aren’t all in Legasus’ name. Legasus sometimes created subsidiaries to run the loans through, making it impossible to search for all of them unless you know the names of the subsidiaries.

In addition, there is no way to tell from the deeds of trust how much Legasus has paid back versus how much it still owes on each loan.

Aside from the two big tracts under foreclosure, Legasus is facing foreclosure on a few small lots as well. Last week, two lots of two acres each in the Water Dance development between Tuckasegee and Glenville were sold at foreclosure. The two lots went for a total of $325,000, purchased by Macon Bank, who was doing the foreclosing. Legasus still owed on a $423,000 loan made by Macon Bank in 2006.

There are pending foreclosures against five additional lots in Water Dance.

Developer’s plight mixed blessing for community

Legasus developers have been attracting attention from Jackson County residents for almost two years.

When news of the plans got out in early 2007 — calling for 1,800 lots on 3,500 acres between Tuckasegee and Glenville — Legasus evoked the ire of locals. While Legasus developers pledged to create a high-quality, environmentally-friendly development, locals feared the loss of viewsheds, degradation to water quality and an eroding sense of place from the growth of gated communities.

Residents of Tuckasegee publicly raised concerns about what would happen if the developers got part way into the project only to realize they didn’t have the capital to see it through.

“Two years ago I said, ‘What if the housing bubble bursts?’” recalled Jeanette Cabanis Brewin, a resident in Tuckasegee. “What if they get up there and start ripping the top of the mountain off and they run out of money? What is going to happen to the rest of us?”

That fear has indeed played out in some places.

“Legasus is definitely not alone. There are so many right now that have folded,” said Bryan Tompkins with the U.S. Fish and Wildlife Service in Asheville.

Tompkins has seen developers make an initial foray into development, cutting roads and grading lots, only to find out there isn’t a market for those lots after all.

“When they go bust, they have all these roads cut and they are not there to maintain it,” Tompkins said.

Environmental agencies are left trying to figure out what to do and who is responsible. In Madison County, a development abandoned by its owner needs $750,000 in work to get it back in compliance, Tompkins said. Tompkins wonders if a new owner would be able to take on such a liability.

“Who can do that and what bank is going to give you money to do that?” Tompkins said.

 

Vested rights

Rumors of Legasus’ plans in early 2007 helped spur the creation of a comprehensive development ordinance in Jackson County. The county adopted some of the most stringent development guidelines in the mountains.

The very development that led to the creation of the ordinances was ultimately grandfathered in, however. Legasus received vested rights, allowing it to proceed with development plans exempt from Jackson County’s new rules.

The vested rights most likely will be passed on to any new owner, according to Michael Egan, an attorney in Hendersonville who advised Jackson County during the creation of its development ordinances.

“It would be my opinion that common law vested rights would run with the land,” Egan said.

Vested rights are intended to protect developers caught mid-stream by new ordinances. Legasus argued they’d already spent a great deal designing a master plan and marketing the development to prospective buyers. If they had to start over again, they would be unable to recoup the investment they already had in it, they argued.

The same still holds true, Egan said. If the vested rights don’t pass to the new owner, it would devalue the selling price of the land, and put Legasus back in the same spot of being unable to recoup its investment, he said.

There is one catch, however. Legasus’ argued that all 3,500 acres were entitled to vested rights, even though development forays were further along on some of its tracts than others. Legasus claimed that the disparate tracts shared a common marketing theme. Residents of each development could use the amenities of the other properties, from a clubhouse at one to the golf course at another.

“If a sale of the property would somehow interfere with that common promotional plan then it is possible it might affect the vested rights,” Egan said.

Vested rights aren’t good forever. In this case, the county granted vested rights for five years.

“The clock is ticking,” said Jeanette Cabanis Brewin, a resident in Tuckasegee who has expressed concerns about the mega development. “They have used up almost two and half years of their five years.”

The economic slump may have given the community a reprieve, said Mary Jo Cobb, a Tuckasegee resident who was opposed to the scale of the development.

Most of all, “I hope this has bought us some more time to step back,” Cobb said. “There is so much interest in our environment now than there ever was before. I think that is good. We need to be aware and preserve these mountains.”

Cobb hopes the foreclosure will sideline Legasus’ plans for a golf course.

“That would be fine with me,” Cobb said.

Indeed, the foreclosure throws the fate of a controversial Phil Mickelson-designed golf course on Legasus’ property into question. A tract currently in foreclosure encompasses some of the land slated for a golf course in Legasus’ original plans.

The buyer of the tract could decide to partner with Legasus, in which case the golf course could still be pursued. If the buyer goes off on their own, Legasus could be forced to redesign the course on a different portion of the property or scale it down.

The golf course has yet to receive its state and federal environmental permits. The Army Corps of Engineers and the N.C. Department of Environment and Natural Resources had several concerns with the original design. Legasus’ application has been on hold until it could address those issues — for nearly 18 months now.

“They have not made any effort to address those concerns,” according to Bryan Tompkins with the U.S. Fish and Wildlife Service.

Legasus has lined up a biologist to conduct a bat survey of old mine caves on the property in the fall, but that has been the only movement Tompkins knows of.

Thompkins said it was abnormal to go so long without hearing from Legasus. Tompkins monitors environmental permits from developers all over Western North Carolina and often has to send them back to the drawing board.

“When things were going like gangbusters we would have gotten a response a month later,” Tompkins said of typical developers. “They would turn around with a response on a dime to speed up the permitting process so they could get on with their project.”

The recent news that part of the property is in foreclosure could explain Legasus’ silence, Tompkins said.

Jackson eyes options for current library site

In the game of musical chairs stemming from the library moving out of its current digs on Sylva’s Main Street, “rear ends” may be landing in unexpected places.

The Sylva Police Department was at least temporarily rebuffed — not “rebutted,” though you might think so — in its inquiry into occupying the old library building.

At the town board’s direction, Police Chief Jeff Jamison recently approached the county about the prospect of buying the old library and converting it into a police station. But Jamison learned the county may have plans of its own for the building. The county currently leases space for a few of its departments, which could be relocated to the old library to save on rent money.

The problem, however, is that the building only has 16 parking spaces, said County Manager Ken Westmoreland.

Another option on the table would be to sell the building to the adjacent Jackson Savings Bank. Westmoreland said the bank has long indicated interest in acquiring the building.

He said the county’s about 18 months out from making a decision. Construction has only just now gotten underway on the new library.

Still on the hunt to relieve crowding at the current town hall and police station, Sylva leaders are now eyeing a couple of former fire truck bays in the main level of town hall that are currently used for storage. Town Manager Adrienne Isenhower said they’re just putting the finishing touches on a grant application to the U.S. Department of Agriculture’s Community Facilities Grant and Loan Program to renovate the space, and hope to know by fall if they’ll get the grant.

If so, that’s what they’ll do — and that’s their druthers anyway, Isenhower said.

“I think I would pick what we’re doing [over the county space] because it will put us all in the same place. We want the expansion,” Isenhower said.

Under that scenario, “The renovation is scheduled to begin in fall of 2010,” Chief Jamison said. “The federal Department of Agriculture has money available for municipalities with those kinds of needs to expand.”

Mayor Brenda Oliver said the town would also need to conduct a feasibility study of renovation of the bays for use by police.

Katrina refugee wades into the fray against Duke

As Jackson County leaders continue their fight against Duke Energy, an unassuming local lawyer that few have heard of has appeared as the county’s heavy-hitter against the politically powerful and uber-wealthy Fortune 500 utility.

Attorney Gary Miller, 52, a former business lawyer from New Orleans, has been hired to represent the county in its push to seize control of the Dillsboro dam owned by Duke. Jackson leaders plan to use eminent domain to take over the dam and adjacent shoreline and turn it into a river park. The move would thwart Duke’s plan to demolish the dam, achieving the county’s long-standing goal to save the dam.

Miller spent most of his career to date representing the corporate world. His expertise lies not in the courtroom, but in pulling off complex deals and financings rife with legal maneuvering, at times plowing new ground where precedent was lacking. Miller has negotiated deals between mega-corporations like Shell and Union Carbide. He also has represented casinos, developers, financial syndicates and other large organizations, both private and publicly traded.

“Historically I have been a transaction lawyer. I am typically a paper pusher,” Miller said, downplaying his lawyering past.

A paper pusher, perhaps, but mass quantities of extremely complicated, critically worded paper. Hundreds of pages with millions on the line should the other side manage to get a fast one by in the language. Paper with months of legal maneuvering and tedious research lurking behind the ink.

“Yeah, I’m good at that,” Miller said.

Paper pushing, in the world of lawyers, is how things get done. Jackson County Manager Ken Westmoreland said Miller’s background is a good match for “peculiarities” of the eminent domain case against Duke.

“His experience is in corporate law, working both for and against big corporations. Secondly, he specializes in real estate law, and the condemnation is basically a real estate issue,” Westmoreland said.

The most typical work for Miller involved commercial financings: a gigantic loan collateralized by corporate assets scattered across the county.

“They will hire attorneys in each state to give their opinion of the enforceability of the documents or modify them to make them enforceable,” Miller said.

When some of those assets resided in Louisiana — such as a deal involving an oil might putting up its refineries as part of the collateral — Miller was their guy

“It wasn’t the kind of stuff your average lawyer had knowledge about,” Miller said.

One of Miller’s most interesting jobs involved dueling casinos vying for a single gaming license in New Orleans. The state of Louisiana awarded the gaming license to one casino, while the City of New Orleans granted a lease to a different casino operator. Both groups felt they were entitled to the license — seemingly a no-win situation.

“The governor forced the two groups into a shotgun wedding and they formed a partnership to operate and build it,” Miller said. The joint entity that emerged went bankrupt before they finished construction, complicating an already sticky situation. Miller spent the next two years helping to sort out the mess. Skill in sorting out messes will be critical to resolving the bitter fight and test of wills between Duke and Jackson County.

The path that led Miller to Western North Carolina isn’t exactly a pleasant one. Miller is one of the thousands of Hurriane Katrina refuges who left their home city of New Orleans for good in the aftermath of the devastation and struck out for a new life. Miller hung a new shingle in Bryson City, and calls Sylva home.

Ironically, a life-long love of paddling drew him to Western North Carolina during that trying time. The paddling community is an ally in Duke’s plan to demolish the Dillsboro dam, as it would open up a new stretch of free-flowing river. Miller can frequently be found paddling the Tuckasegee in his free time, and until recently, was a member of American Whitewater, a paddling advocacy group that is a stalwart defender of dam demolition. Yet when it comes to tearing down the dam, Miller sides with the county in its fight to save it. Miller could not talk about specifics in the case or the county’s strategy.

 

The fateful storm

As Hurricane Katrina bore down on Miller’s former city of New Orleans, he sent his wife and two children away. But saddled with an elderly mother on oxygen who refused to leave, Miller, too, was forced to stay behind. Sadly, his mother did not survive the paralyzing power failures that accompanied the storm.

The next day, as Miller tried to make plans to get her body out of the city, his family reached him on his cell phone and warned him of the broken levees and rising water that would soon envelop the already ravaged city. Miller escaped in time, although three weeks would pass before he could finally get his mother’s body out.

While holed up at the home of extended family the next day, Miller got a call from his law firm giving him two choices: transfer to their Houston office or their Baton Rouge office.

“I wasn’t prepared to make a decision to move,” said Miller. “I told them ‘I’ll go off on my own.’”

Miller scrounged to find a rental house for his family in Lake Charles, La., but just as they got settled in, albeit with just a few suitcases between them, a mandatory evacuation was announced for Hurricane Rita.

Miller had given one of the family vehicles to his mother’s caretaker, who had no car of her own and was stranded at a major refugee camp in Dallas. So when the evacuation order came for Rita, he piled his wife, children, mother-in-law, two golden retrievers and a pet guinea pig into their only remaining vehicle and joined the mire of traffic crawling north.

Shortly after Katrina hit, Miller had received an email from John Burton, the then general partner of Nantahala Village Resort, asking if the family was OK. Miller’s family was a regular at the Village, and he had befriended Burton after years of vacationing there. Burton had offered to put them up — an offer Miller initially declined with the intention of continuing his life in New Orleans. But as Miller reflected on his life — no home, no possessions, no job and one family car — Miller contacted Burden to tell him they were on their way.

Burton put them up for free at the Village for six weeks while they figured out what to do.

“Having lived through Katrina and two weeks later being evacuated for Rita, to be honest I was a little gun shy,” Miller said of moving back to New Orleans. “I have lived through many hurricanes, but that was something that was overwhelming.”

Miller had vacationed in WNC as a kid, often to paddle on the Nantahala. He continued the tradition with his own family, and in 1999 he and his wife bought a lot with the intention retiring here one day. They decided to make the move sooner rather than later.

“After Katrina, things and money basically had no meaning to me. My priorities were completely restructured in terms of what was important in life,” Miller said. “When you are working for a Fortune 500 company, you are just helping an officer climb the corporate ladder and make money. I had worked on a lot of ‘sexy ‘things as lawyers call it, but here I can help people. It is more rewarding professionally and emotionally.”

Miller brought a few of his big corporate clients with him, however.

“Clients said, ‘We don’t care where you are as long as you have a phone, a fax and a computer,’” Miller said.

Miller said he hasn’t experienced culture shock. He was tired of the big law firm and city life, despite the big paycheck that go with them. Miller said he paid his dues, from the 3 a.m. phone calls from big money clients who feel like talking and must be humored to missing his kid’s bedtime night after night.

While many may believe Jackson County has little chance of winning against the likes of Duke, there’s little doubt that any settlement that goes the county’s way will have to involve a very complicated game of give and take. Whatever the outcome, Miller will be back in his old element in his new WNC home.

NC Utility Commission OK with dam seizure

Jackson County appears to be on firm footing in its quest to seize the Dillsboro dam from Duke Energy as far as state law goes, but it is unclear whether the county could hit a roadblock from the Federal Energy Regulatory Commission.

Jackson County commissioners have voted to pursue condemnation of the Dillsboro dam and adjacent shoreline under the pretext of creating a river park. On the surface, recreation is grounds for condemnation under state law. Eminent domain law in North Carolina is complex to say the least, however, with seemingly endless exceptions and disclaimers written into the statute.

One pitfall Jackson County can cross off the list, though, is the North Carolina Utility Commission.

“I am not aware of any restrictions under North Carolina public utility law,” said Antoinette Wike, chief counsel for the N.C. Utility Commission.

That’s not to say counties can go around condemning any utility operation they please, such as coal plants or nuclear plants, and converting them into parks. Power plants of larger stature operate under a “certificate of public convenience and necessity” from the state. Considered integral to serving the public demand for electricity, those power plants would be protected from any foray into condemnation, Wike said.

But the Dillsboro dam is so old — nearly 100 years — and produces so little power, it never operated under a certificate of public necessity. Further, the power turbines at the dam have been off-line for five years.

“In this instance the Dillsboro dam and powerhouse have not been used for several years so the Utility Commission, as far as I know, doesn’t really have any jurisdiction over this,” Wike said.

Duke’s lack of upkeep on the Dillsboro dam could ultimately work against the utility in the condemnation fight. Maintenance on the dam was already in decline when major flooding on the Tuckasegee River in 2004 sidelined the hydro plant. Duke had already set its sights on demolishing the dam by then and chose not to invest in repairs to get it working again.

Prior to the flood, the two turbines in the powerhouse were capable of churning out just 225 kilowatts of power — although outside hydropower specialists say that the turbines could be retrofitted and additional ones added to make more power.

Had Dillsboro dam been operational, Duke may have been shielded by the state’s eminent domain laws. Statue allows for the condemnation of property owned by a public utility only if “the property is not in actual public use or not necessary to the operation of the business.”

Duke could try to claim that tearing down the dam is necessary to its operation. Tearing down the Dillsboro dam was considered environmental mitigation to continue operating its 10 other dams in the region — or so everyone thought. Special interests, from environmental agencies to paddling groups, supported dam removal following a three-year series of negotiations aimed at developing a mitigation package for the region that would allow Duke to renew its licenses for the other dams.

In a confusing ruling last summer, however, the Federal Energy Regulatory Commission disputed the notion that Dillsboro dam removal has anything to do with mitigation for the other hydro operations.

“The Commission is not bound to accept that view, and indeed, as the record demonstrates, we do not,” FERC ruled.

That could frustrate any claims by Duke that the dam’s removal is “necessary to the operation” of its business.

Duke may not be without recourse, however. The utility could turn to its powerful and long-standing ally in the fight against Jackson County: none other than the Federal Energy Regulatory Commission. FERC has consistently sided with Duke, from minor tiffs over language to major appeals.

FERC may — or may not — have something to say about Jackson County’s bold move to condemn the dam and halt its demolition.

“It would be premature to speculate on this matter at this point,” said Celeste Miller, spokesperson with FERC.

Miller said it is too early to know what if any sections of the Federal Power Act could come into play in this complicated situation.

Terms of Duke’s offer made public

The terms of Duke Energy’s counter-offer to Jackson County and the town of Franklin in exchange for dropping their opposition to Dillsboro dam removal have been made public.

Duke Energy made a confidential offer to their opponents two weeks ago in hopes of staving off a move by Jackson to use eminent domain to seize the dam. Jackson County commissioners voted 4 to 1 last week to turn down the offer. The Franklin town board followed suit this week with a unanimous vote to reject Duke’s offer.

Franklin Alderman Bob Scott made the terms of the offer public. Once the town board voted on the offer, it became a public record, he said. Scott also believes the residents of Franklin have a right to know what the town board voted to accept or reject on their behalf.

“The public body exists for one reason only and that’s to conduct the public’s business,” Scott said. Furthermore, Duke is a public utility operating as a monopoly in the region and should answer to the public as well.

Here is what Duke has offered Jackson County in exchange for dropping their opposition to dam removal:

• Pay $150,000 to help create a river park along the Tuckasegee River in Dillsboro.

• Provide 200 hours by a Duke staffer to write grants to assist with the river park.

• Pay $75,000 to help Jackson County with the upkeep and management of a boat launch Duke already has plans to build along the Tuck, but will be turning over to the county for maintenance.

• Agree not to seek damages or attorney fees against Jackson County for holding up permits Duke needed to dredge sediment behind the dam. Duke had to go to court to get the permits.

• Speeding up payment of $350,000 for recreational amenities on the Tuckasegee and Lake Glenville that had been already promised. Duke had previously pledged to pay the mitigation sum within 15 years, but would speed it up to five. Duke similarly offered to speed up the already-promised sum of $40,000 for sediment control initiatives.

Here is what Duke had offered Franklin:

• Pay $10,000 for additional amenities at a recreation area on Lake Emory. Duke plans already call for a boat put-in and picnic tables.

In exchange, Duke wanted Jackson and the town of Franklin to drop all legal and public opposition, including challenging Duke in the news media. The offer also was contingent on the majority of terms remaining confidential.

Franklin leaders claim Duke has shortchanged their residents in the way of mitigation for the utility’s dam and powerhouse the Little Tennessee River at Lake Emory. Removing the Dillsboro dam was supposed to count as mitigation credits for Duke’s hydro operation at Lake Emory, but Franklin leaders fail to see the benefit of dam removal in Dillsboro to their residents in Franklin and want to see more direct benefits, primarily around Lake Emory.

Duke begins prepping for dam removal

Despite the looming threat by Jackson County to win control of the Dillsboro Dam using eminent domain, Duke Energy announced that it will begin preparing for its demolition this week by dredging the backlog of sediment from behind the dam.

It marks yet another interesting twist in the increasingly tit-for-tat saga between Jackson and Duke.

Jackson County commissioners voted 4 to 1 last week to launch eminent domain proceedings against Duke to take ownership the Dillsboro dam and adjacent shoreline for the creation of a riverside park. State law allows for the use of eminent domain for parks and recreation.

The move was a last-ditch effort by Jackson County to stop Duke from tearing down the dam. But Duke seems unfazed. The company sent out a press release this week stating that it would begin prepping for sediment removal in anticipation of dam demolition in early 2010.

State and federal environmental agencies have insisted Duke dredge behind the dam to keep the backlogged sediment from flushing downstream and harming the aquatic ecosystem when the dam is removed. Duke is being required to dredge 70,000 cubic yards of the estimated 100,000 cubic yards behind the dam.

It will take six months to remove the sediment, according to Duke. Dam demolition, if not halted by Jackson’s move to seize the dam, would begin in early 2010.

Prep work to dredge the sediment could begin late this week or early next week. Duke will take precautions to minimize the impacts of the earth-moving operation in the river, according to Fred Alexander, Nantahala District Manager of Duke Energy Carolinas.

“We recognize this will be an environmentally sensitive operation, and we are taking great care to follow all appropriate environmental and regulatory requirements,” Alexander said in a statement.

Duke plans to process the sediment and hopes to find a market for its reuse in the construction industry or other uses.

Earlier this year, Jackson refused to grant Duke the permits it needed to dredge the sediment. Duke turned to the courts to demand the permits and won. Jackson was not only forced to relinquish the permits, but faces the prospect of reimbursing Duke’s legal costs to secure the permits.

For eight-tenths of a mile behind the dam, the Tuckasegee River is a wide, slow-moving backwater. Following dam removal, the area will be restored to natural river conditions, Duke said in a press release.

“There will be a significant environmental benefit once we have removed the dam and powerhouse,” said Alexander.

The free-flowing river will create new paddling and fishing opportunities and allow for natural migration of aquatic species.

John Boaze of Fish and Wildlife Associates has argued that a fish passage around the dam could accommodate migration for some species without removing the dam.

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