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State Flags Quarry Project: The Engineer Seeking the Mining Permit Has Ties to Failed Penland Development

March 18, 2008

By Tim Simmons, The News & Observer, Raleigh, N.C.

Mar. 18–A proposed gravel mine that opponents say would mar panoramic views of the Blue Ridge Parkway has caught the attention of state regulators because of its ties to a multimillion-dollar real estate collapse in nearby Mitchell County.

The common thread between the rock quarry and the failed real estate development is Randy Carpenter, a Mitchell County engineer and surveyor who applied for a mining permit last year covering about 160 acres in Avery County. Carpenter also did much of the engineering and survey work for the real estate development known as the Village of Penland.

The collapse of the Penland project, about an hour northeast of Asheville, left dozens of investors owing banks more than $100 million on mountain property worth a fraction of that amount. It triggered several lawsuits in which banks blame developers, investors blame banks and a former BB&T internal investigator says that she was fired for refusing to participate in a coverup.

Neil O’Rourke of Apex, a lawyer who helped oversee the development, also pleaded guilty in February to one count of conspiracy involving federal charges of securities, mail, wire and bank fraud. He agreed to work with government officials as part of the plea agreement.

The proposed quarry is in Avery County just north of the Blue Ridge Parkway and west of Mitchell County. Those who own nearby property, including several landowners from Raleigh, have been joined by a national parks advocacy group in opposing the project.

“I’m not opposed to quarries,” said Mason Williams of Raleigh, whose family owns about 950 acres of land next to the proposed mine. “It just seems to be not the appropriate place.”

Greg Kidd, senior program manager with the National Parks Conservation Association, said parkway views must be preserved if the state wants to continue attracting visitors to the area.

“People … have said they come to the parkway because of the quality of the views,” Kidd said. “Any time there are documented impacts on the quality of the views from a park like the parkway or the Appalachian Trail, that should be a major factor weighed in the permitting process.”

State has questions

In its latest letter to Carpenter, the state Department of Environment and Natural Resources required Carpenter to address 15 issues related to the quarry on Burleson Bald.

Carpenter said he intends to answer the questions before the June deadline. However, he would not comment on concerns related to the Village of Penland.

But Jim Simons, director of the state Division of Land Resources, said lawyers for the Department of Environment and Natural Resources are reviewing whether Carpenter’s mining permit should be denied based on violations that occurred as part of the Penland development.

The violations involve the rerouting of streams to expand a lake that was going to be the centerpiece of the 1,200-acre development. Carpenter did the survey and engineering work that ultimately left developers facing fines of more than $250,000 for altering wetlands and rerouting streams without permits.

Though the fines were paid, Simons said, the violations have not been resolved, because the land was not returned to its original state.

State law allows the department to deny permits to any applicant with pending violations, Simons said.

In addition, Joseph Grier, a Charlotte lawyer who was appointed by the courts to act as a receiver for any assets related to the Village of Penland, said he is interested in reviewing complex land swaps such as the ones that allowed Carpenter to acquire property for the proposed quarry.

Tax records show that Carpenter assembled more than 700 acres in Avery County, said Jason Warner, an international tax lawyer who lives near the proposed quarry; he opposes the project. Warner said the land was acquired at reduced prices in a series of transactions that involved the same people who were developing the Village of Penland.

Carpenter was working with Penland’s developers at the time he was assembling the land. Grier said his job as receiver is to claim any assets owned by Penland’s developers. That would include property sold at greatly reduced prices.

Carpenter said any property tied up in a court case would likely be unavailable for use as a quarry, but that possibility would not keep him from continuing to pursue the needed permits.

(Staff writer Wade Rawlins contributed to this report.)

tim.simmons@newsobserver.com or (919) 829-4535

Staff writer Wade Rawlins contributed to this report.

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