Bankrupt developer, bad streets leave Cleveland neighborhood in limbo

kjahner@newsobserver.comApril 18, 2014 

— There’s little debate that Tymber Creek subdivision in Cleveland has roads that need repairs. However, figuring out who is responsibility for paying for it is another matter.

The uneven streets, which were completed in 2007, and since deemed substandard by the state, have frustrated residents at the subdivision near Cleveland Road.

The developer has filed for bankruptcy and the bank that bought the remaining land is simply a property owner, so the Department of Transportation says fixing the roads is the responsibility of the subdivision’s homeowners.

“They can either pool resources, or have the homewoners association be responsible for the road,” DOT transportation technician Chris Overman said.

That leaves residents like Tyler Bray perplexed. He lives on Brindley Circle near a depression and a sewer cover from which water flows when the creek rises after rain, and said he’s seen a car blow two tires on a hole developing near the manhole cover.

“She could have sued whoever she wanted to. Not that she would have won, but she could have,” Bray said, noting that a homebuilder whose trucks created much wear had filled in the hole with a patchwork solution that slightly improved the road but only alterd where water flowed. “You’re just asking for trouble.”

Bray also said the neighborhood covenant would require two-thirds of homeowners to approve funding fixes. He “highly doubts” the HOA would do that, citing many homeowners who either don’t have to go near the particular problem, are unable to help pay for it or are frustrated with the developer and bank.

Johnston County stepped in a couple weeks ago when Bray complained on behalf of the fed-up residents, and this month ceased issuing new building permits for the neighborhood. That freezes six unsold lots at the end of Brindley Circle – some of which have buyers who have already paid deposits.

“We’re trying to prevent any further development on substandard roads until those roads get developed,” Johnston county planner Berry Gray said.

That leaves the entire neighborhood – where developer JDG Investment began selling lots in June 2007 – short on options as it hopes for fixes. In 2008, DOT investigated the status of the roads at the request of a surveying company hired by JDG and found “deficiencies,” according to Overman.

Gray cautioned that DOT often finds some shortcomings in subdivision roads before it begins maintaining them, which is after a few years of wear and tear and before enough houses are occupied. In this case, the needed fixes were not made before JDG Investment filed for bankruptcy in July of 2010 after the market crashed in late 2008.

In December 2012, Capital Bank bought the remaining Tymber Creek lots, some of which it has since sold. Most lie at the north end of Brindley Circle.

Though Bray said the bank bought knowing that the roads had a problem, the bank doesn’t believe it should have to pay for them just because it bought land in the neighborhood.

Wayne Reese, who works in Greensboro for the bank’s real estate division, said last week he had bank attorneys looking into what could or should be done. He said the bank’s role should be no more or no less than any other property owner.

“We’re not the developer. It’s not the bank’s responsibility to bring the roads up to par,” Reese said. “We’re just going back to (the county) and seeing what can be done to make the neighborhood better and fix it so people can sell houses and we can sell lots.”

NCDOT, however, will not take over substandard roads. That would constitute putting the state on the hook for failures of developers and their contractors, Overman said.

“We can’t do anything until the repairs are made. This happens in subdivisions all the time. There’s too many repairs, the property owners can’t afford it, the developer goes out of business,” Overman said. “So they’re just kind of stuck.”

Bray said he’d like to see the homebuilder, the bank, the county, DOT and the homeowners “figure out a way that everybody is responsible in some way, set up a bond, pull financial resources together.”

But he’s not sure if that will happen.

“That to me is the solution. But we’ll see. That’s what I would do if I was in control,” Bray said. “I feel like everyone wants to pass the buck.”

Jahner: 919-829-4822; Twitter: @garnercleveland

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