An overgrown portion of the stream through Rhododendron Park in the Henderson County town of Laurel Park. Colby Rabon / Carolina Public Press

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LAUREL PARK — Rhododendron Park looks a bit like an untamed swamp this summer.

Some residents of the surrounding residential community in central Henderson County have told Carolina Public Press that the low-lying overgrown former lake bed that makes up the park has become a breeding ground for rodents, snakes, mosquitoes and other pests not generally welcome near where people live.

Looking at the site, you might be surprised to learn that it didn’t used to look anything like this. But the town of Laurel Park’s contracted with federal money to reshape it as a “stream mitigation” project following Town Council action in 2012.

Some residents opposed the project from the start and continue to oppose it now. They weren’t opposed to development of the site as a park, but object to the form that park is taking. Several of them contacted Carolina Public Press late last year, asking for an investigation of the situation.

“How very disappointing for a few politicians to make such long-reaching decisions which affect generations to come in Laurel Park on what once was an open, user-friendly green space and which has been turned into 100-plus feet of zigzag trenching,” Laurel Park resident Virginia Gambill told CPP in an email last month.

“The entire area where the stream mitigation was done is an unsightly horror … Anyone who doubts the description of ‘horror’ for this stream mitigation is invited to drive by this site to see it for themselves.”

But Mayor Carey O’Cain sees the park quite differently and predicts that many, if not all, residents will eventually agree with him. The Rhododendron Park project was designed with multiple phases, which have not been completed, he told CPP in a phone interview.

O’Cain also noted that folks in Laurel Park have talked about creating a park in that location for years. At the same time, he conceded that the park that’s now being shaped there may not be what they envisioned, even when it’s completed. But O’Cain insists that modern regulations for wetlands limited the town’s options. He promises that the finished product will meet with less objection.

Opponents of the park say they don’t trust O’Cain and some of the other town leaders, pointing to statements made when the project was approved that some residents have found misleading. They also say that town leaders have mistreated those who have disagreed about the park. One property owner believes he was singled out for reprisals by the town, including the removal of steps on his property even after he notified the town that he believed they had no right to take them.

At the heart of the project is $500,000 in Army Corps of Engineers funding to convert the former green space into a state-of-nature wetland. Opponents of the park say the allure of that money tainted the approval process. They also claim that hidden additional costs have driven up the project’s real price tag and have contributed to the surging tax rate in the small town.

Not surprisingly, the mayor disputes most of these allegations.

Born in mistrust

The site of Rhododendron Park, was once the location of a small lake on the eastern edge of town. That may explain why the road that circles the area on three sides continues to be called “Lake Drive.” Photos from the mid-1900s show cars parked around the lake as people came there to recreate or enjoy the view.

A small north-flowing stream fed the former lake. This tributary joins with Wash Creek a short distance to the north. Wash Creek flows east into Hendersonville where it joins Mud Creek, which then runs north to meet up with the French Broad River near Fletcher. The same Wash Creek tributary feeds into the site today. Because it’s part of the French Broad system, the stream qualifies for projects related to that system.

In 1977 the dam for the old lake was breached. The circumstances in which that happened are disputed. It’s not clear how much the issue matters today, but supporters and opponents of Rhododendron Park tell the tale differently.

More clearly, from that time until the start of the current Rhododendron Park project, the vaguely north-south-oriented dry lakebed was home to a green space fed by a small stream from the southwest, that flowed through the little valley and exited the area on its northeast corner.

Single-family homes and apartment homes overlooked the site. A floating dock from the old lake remained in place. Steps from the apartment complex led down to the former lake area, where the stream continued its much more narrow flow.

For years people had talked about putting a park there. But that’s not what got the ball rolling in 2012.

The small stream running under Lake Drive into the green space area had eroded the road. According to O’Cain, the town was looking at a steep cost to repair it and prevent a recurrence. But a federal program offered a way for the town to have the federal government pick up the tab for those repairs and get a park on the site in one stroke.

The federal program under the watch of the Army Corps of Engineers is “stream mitigation.” When a public work becomes necessary that will diminish a wetland, a credit for that project can given toward another project that will create additional wetland on the same watershed system – in this case the French Broad River and its tributaries.

Town officials learned that another municipality in the area was creating exactly this sort of credit, which would be available to fund a wetland project in Laurel Park, resolving the road erosion issue and creating a nature park. This was under consideration as early as 2009, before O’Cain was elected. However, the other municipality’s project fell through before Laurel Park could act.

When a second project creating the opportunity for stream mitigation arose, those favoring the project urged that the commission not delay taking action this time. With just one dissent, the town board approved the concept in late 2012.

That lone dissent came from then-commissioner Rich Cooke. CPP previously reported on Cooke’s destruction of his correspondence from his time on the board when he resigned last year. CPP also discovered that he forwarded a substantial number of emails, from project opponents who trusted him, to the mayor and other town officials. Cooke told CPP during a phone interview in April that this came after a falling out with Gambill last year because he thought her criticism of O’Cain and other town officials was excessive.

While Cooke disliked what he perceived as innuendo about other town leaders, he expressed no regrets about disagreeing with those same officials when he opposed the stream mitigation project four years ago.

And he remembers clearly why he made that choice.

Cooke was skeptical of claims the mayor and others pushing the project made about its urgency. He doubted that the town really had to lock in its commitment right away.

CPP has examined the minutes from that 2012 meeting and talked about it with the North Carolina Department of Environmental Quality, previously the Department of Environmental and Natural Resources, which had to approve the project. Both show that Cooke may have had good reasons for not trusting what he was told.

Back in 2012, the other Laurel Park commissioners were persuaded that they did need to rush after hearing from the mayor. “It is uncertain if mitigation credits may be available in the future,” O’Cain told them, according to meeting minutes.

DEQ spokesperson Michelle Walker told CPP recently that the availability of credits for a mitigation project depends on other projects being permitted in the region. Because two projects came up in short order, it might have appeared probable that additional credits would have become available sooner or later if the town had decided to wait a few more months and look at alternatives.

Stream mitigation “banks” run by private companies even exist to take advantage of these credits and the federal funding for constructions projects like Rhododendron Park. If the flow of credits was about to dry up, those banks wouldn’t have a very secure existence.

Truth delivered daily

But the same organization involved in 2012 hasn’t had any problem with a shortage of credits. The same organization recently encouraged another Henderson County municipality, Flat Rock, to apply for a similar mitigation project.

People on both sides of the issue contacted Flat Rock leaders about Laurel Park’s experience. The village council ultimately rejected the idea this spring. But Flat Rock’s decisions was not due to any lack of mitigation credits.

Back at the decisive meeting in 2012, minutes show that Laurel Park Commissioner Paul Hansen moved to adopt the agreement, but Cooke objected that he had not yet had a chance to read it.

However, the mayor assured the board that he and the town’s attorney had read the document. Hansen told his colleagues that the project needed to move forward without delay because the mitigation credits were available “now,” according to the minutes.

Before that vote, one property owner, Larry Hultquist, presented commissioners with an alternative plan for resolving their concerns.

O’Cain told CPP recently that just shoring up Lake Drive or going with Hultquist’s alternative plan would have been excessively expensive.

During the 2012 meeting, the town’s engineer asserted that the Army Corps of Engineers had indicated Hultquist’s alternative plan would force the town into the opposite situation on mitigation credits by destroying aquatic habitat, and would thus be prohibitively expensive. CPP is currently seeking federal records that could cast more light on how thoroughly town leaders vetted the alternative with the Corps.

Asked by a resident about simply shoring up the road without adopting any more elaborate plan, the town’s engineer admitted he had no idea of these costs, the 2012 minutes show, though he expressed a willingness to assess this option and described it taking no more than a couple of weeks to do.

Walker at DEQ said the town never asked the agency about the costs and state regulatory implications of any other plan – such as simply shoring up Lake Drive or Hultquist’s alternative – because the town never actually asked.

“The staff that managed this project at the time for DENR are no longer here,” she said. “However, the records we have reviewed at this point do not show that another alternative was reviewed.”

O’Cain did tell the meeting that a previous evaluation of the site as “high hazard” prior to the loss of the dam would mean that any course of action would necessitate the submission of another detailed engineering study to state regulators.

The commissioners rejected a proposal from Cooke to table the issue until all options could be evaluated. With a 4-1 vote they approved Hansen’s motion to proceed with the project.

Some opponents of the park have questioned how a stream mitigation project that creates an essentially wild untouchable wetland and natural habitat in the middle of an existing residential community can be appropriate.

Both the UNC School of Government and the Department of Environmental Quality told CPP that stream mitigation projects aren’t limited by zoning laws or proximity to existing residences.

Although the state and federal authorities have to sign off on many regulatory questions about such projects, the laws currently in place have regulators trusting town leaders to exercise appropriate discretion about whether such a project is acceptable for a specific community. No law prevents local leaders from making a mistake on this point.

And to be fair O’Cain and other town leaders say they don’t think the project was a mistake, even if some residents living nearby continue to voice objections.

Park costs

At the time the town approved the stream mitigation project, town leaders emphasized that federal money would be paying for their road repairs and the new park. But there has been some expense to the town for issues related to the park.

Opponents of the park read the town’s financial records very differently from town officials, saying that park-related costs have been much higher, but are masked by being recording under various line items in the town budget, making the total expense difficult to know.

For these park opponents, the bottom line is that substantial increases in the town’s expenditures have forced the town to dip into its reserves and raise taxes several times.

But O’Cain and Town Manager Alison Melnikova told CPP that those budget increases have been driven by unrelated initiatives. The mayor said the town’s annual budget for park-related projects is $35,000 and the town has stayed within that budget.

O’Cain also emphasized that despite tax increases and use of reserves, the town has not taken on any burden of debt for the park project or anything else.

But opponents see these answers as an evasive shell game in which additional expenditures resulting from the park project aren’t categorized as such.

CPP looked at recent Laurel Park budgets through the 2015/16 fiscal year to examine these question. While a definitive answer about what really drove spending and revenue decisions may be elusive, a few details are clear:

  • The Public Works portion of the budget has driven a steady increase in the overall town budget since Fiscal Year 2010/11. Ever year the town’s overall budget has increased by 3.5 to 10.5 percent, with simultaneous increases in the Public Works budgets of 7.3 to 24.3 percent, exceeding the corresponding overall budget percentage increase each time.
  • While Public Works budget increases of $36,100 (7.3 percent) and $51,300 (8.1 percent) in 2011/12 and 2013/14 were less pronounced, increases in other years were substantially greater. That includes hikes of $100,000 (18.8 percent), $140,400 (20.5 percent) and $200,200 (24.3 percent) in 2012/13, 2014/15 and 2015/16 respectively.
  • The town appropriated fund balance to cover some costs during every fiscal year since 2011/12. The highest fund-balance appropriations were in 2013/14 with $124,000 and 2015/16 with $109,350.
  • In 2009/10 the town’s ad valorem tax rate stood at $0.27. It was increased by four cents the following year and by another five cents in 2011/12. In these years following the start of the Great Recession, similar tax rate increases were common in North Carolina cities that needed to make up for lost revenues from other sources. After those two consecutive increases, the tax rate stood at 36 cents for three years. But in 2014/15 it was increased by an additional 4 cents. This put the Laurel Park tax rate at 43 cents versus its 27 cents level six years ago.
  • While taxpayers might balk at this level of tax increase over six years, the rate is in the middle among Henderson County municipalities, with Saluda and Hendersonville residents paying a bit more and Fletcher, Mills River and Flat Rock residents paying less.

Reprisal?

In March 2015, Melnikova notified Hultquist that if he did not remove a formerly floating dock in the old lake bed behind the apartment complex that he owns, as well as a wall and steps leading down to the area, the town would remove them.

Her letter invited Hultquist to contact the town manager with any “questions or concerns.” So, he responded in turn with a letter saying the town could remove the dock, which he agreed wasn’t on his property. But he said some of the other items, including some of the steps slated for removal, were on his land and the town should leave his property alone.

The town made no response to his assertion of ownership. A few months later, the town had the steps removed without further notice.

Melnikova told CPP that the town was within its rights because an aerial image from the county property office’s website shows the steps were on the town’s property. CPP talked with the county property office about this and confirmed that the plat for the town’s land, also shows the same thing.

Larry Hultquist’s plat of his property shows his boundary with the town’s lake bed property running between a set of steps and a dock. The steps and a related retaining wall are clearly on his property.
The town of Laurel Park’s plat for its lake bed property shows its property line with Larry Hultquist’s property. According to this image, the steps from his property were partially on town property, as was a retaining wall.

At the same time, Jacob Hansen of the property office told CPP that “a survey is the way to determine” property lines in the case of a dispute.

But that’s not the end of the story. Hultquist has shown CPP an earlier plat for his property that existed prior to the town’s acquisition of the lake bed. This map shows the steps were entirely on his property.

So surveys conducted at different times located the property line in significantly different places. How that happened is unclear. Land settling in the aftermath of the lake draining could be involved. So could human error.

Hultquist said his claim is further bolstered by action the county took not long ago, ordering him to make repairs to a retaining wall at the location of the steps. If the county really thought this wall belonged to the town, as the version of the plat backed by the town seems to show, why did the county ask him and not the town to pay for repairs?

Regardless, the town removed the steps despite Hultquist’s statements because the town manager thought she had ironclad evidence that the town was right. Instead, the ownership of the property seems unclear.

CPP talked with David Owens, a specialist on property issues at the University of North Carolina School of Government about the situation.

“On the ownership question, either party could go to court to get a definitive ruling (regarding) disputed boundaries or ownership,” Owens said.

“It would be common to seek to resolve disputed questions of ownership before initiating enforcement actions, but sometimes enforcement is initiated and that sparks the party who disagrees with the title issue to initiate proceedings to resolve ownership – with the enforcement then put on hold while that is done.”

In this case, the “enforcement” was completed quickly and Hultquist, who does not reside at the site, was not aware in time to prevent the town’s action.

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“I can see why the town might have concluded by their boundary map that the steps were within their boundary,” Hultquist told CPP in an email last month. “However, they never requested to see my plot plan before they quickly removed the steps. I was never given the satisfaction of ironing out the dispute before they so rudely removed the steps. My opinion still stands that they did not follow proper procedure before removing the steps and they never gave me the opportunity to review their or my survey with them before the steps were taken out.”

He later added, “In my opinion, they took as drastic an action in removing my steps as they did in planning, designing and then botching the construction of this ruined park. The park property is a failure and it definitely has impact on the value of my property.”

Both O’Cain and Melnikova denied that removing the steps had anything to do with Hultquist’s opposition to the park project. No one else’s steps were removed in a similar manner, but no one else had steps going down to the lakebed in this way.

Hultquist sees the situation differently.

“For my volunteer efforts and dissatisfaction with the design the town left us with, a portion of my property has in my opinion been illegally or at least very unfairly taken,” he said. “I was snowed, abused and now I must deal with a loss of property values.”

Remaining questions

Getting information from North Carolina local and state government sources is relatively easy, provided they comply with the state’s Open Records law. Acquiring the types of records from the federal government can be much more challenging. Federal inquiries are governed by the Freedom of Information Act.

While all of the records related to the stream mitigation program and Laurel Park’s project should be available to the public, viewing them involves processing a formal request that goes through a sometimes lengthy process, with results that can be difficult to predict or understand.

CPP is preparing a Freedom of Information request, or FOIA, for much of these records. But because of the potentially long time lag in receiving a response from the Army Corps of Engineers, CPP is publishing the preliminary report you are reading and plans to update this story with a future follow-up when the federal material becomes available.

Among the issues that could be cleared up by the federal records are questions about adequacy of federal oversight for local stream mitigation programs, whether contractors may be exploiting small-town naiveté about such projects in order to profit from the federal funding and whether there was any additional correspondence between town officials and federal authorities that was not included in the materials the town has released to CPP and which might cast the situation in a different light.

One of the questions that opponents of the park project have asked is whether anyone — contractors, landowners or town officials — improperly benefited from the project or participated in inappropriate activity related to the project.

To examine that question, CPP requested years of town officials’ correspondence relating to the project, and received a wealth of materials from the town this spring. CPP has evaluated many of these documents, but with such a substantial volume of materials, that process of evaluation will continue for some time.

So far, there’s no smoking gun. As CPP has previously reported, Cooke’s improper destruction of emails became apparent, as did his forwarding of emails, from Gambill and other opponents of the park, to current town officials.

CPP has looked for evidence that town officials ever conducted improper closed sessions or secret meetings with the contractors working on the stream mitigation project. That hasn’t become apparent so far.

There’s also been no evidence so far of any inappropriate trading of gifts for supporting the project.

In addition to the town’s emails, CPP has researched political reports for both Laurel Park and Flat Rock candidates over the last several elections. In most cases, candidates ran unopposed. Most reported that they received no substantial campaign contributions.

It’s certainly possible that someone is lying, but to this point no evidence has turned up to support opponents’ suspicions about town leaders’ motives for supporting the park project.

CPP will attempt to offer a more complete assessment of these questions once the federal information becomes available and analysis of the town’s records can be completed.

Editor’s Note: Ari Sen, who graduated from West Henderson High School this spring and worked with CPP for his senior project, contributed to the reporting for this article by reviewing Henderson County political campaign records.

Frank Taylor

Frank Taylor is the managing editor of Carolina Public Press. Contact him at ftaylor@carolinapublicpress.org.

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