New ownership for broken Woodlake Dam?

VASS TOWNSHIP, North Carolina (WTVD) -- The broken Woodlake Dam might be getting the lifeline it needs: new ownership.

Just weeks after the NC Department of Environmental Equality assumed control from the maligned owners, Woodlake VP and Managing Partner Julie Watson told residents the company is willing to "move forward with a plan to transfer the lake and dam to a lake-front property owners' association, which would need to be established."

In a letter sent to residents obtained by the ABC11 I-Team, Watson explained "the lake-front owners could then potentially receive State assistance to repair the dam in return for an annual assessment, or could seek other sources of funding for the dam repairs."

Watson, along with German investor Illya Steiner, earned the ire of state officials after they failed - again - to come up the money necessary to make mandatory repairs.

In two documents obtained by the ABC11 I-Team, at the Attorney General's Office and Department of Environmental Quality effectively labeled the situation at Woodlake to be that of an emergency, requiring immediate action that must be paid by taxpayers.

"Breaching the dam is a measure essential to provide emergency protection to protect life and property downstream," NCDEQ Secretary Michael Regan wrote in a letter dated June 8th. "Under this declaration, the Department intends to expedite the procurement of qualified dam engineers for the design and construction oversight for the temporary full breach of the damaged Woodlake Dam."

Paid now by taxpayers, construction work to breach the dam began on June 19 and should finish within 6-8 weeks, according to DEQ spokeswoman Bridget Munger.

"If the owners get involved, then we have skin in the game," resident Lou Mason told ABC11, responding to Watson's letter. "We could open this club, open this lake, and we'd take care of it a lot better - because it's ours."

Still, Watson warned the cost to replace the dam could reach $20 million. Mason hopes Moore County commissioners and state representatives will step up to assist residents in restoring the lake.

"This is about so much more than our property values," Mason asserted. "This is about restoring our way of life."

The Woodlake saga that reached a near-catastrophic climax after Hurricane Matthew. The storm exposed the dangers of years of neglect when crews found a ruptured spillway, forcing the evacuation of hundreds of residents. The National Guard was called in to plug the leak with sandbags.

An ABC11 I-Team investigation confirmed that history of negligence on the part of the past and current owners - German investors Ingolf Boex and Illya Steiner, plus Woodlake Corp. Vice President Julie Watson - and a failure on the part of the DEQ to enforce the many Dam Safety Orders and notices delivered over the past decade.

As the I-Team also reported, the risk of impending breach forced the DEQ and FEMA to bring in pumps to drain the lake and reduce pressure on the failing dam. The result has been the disappearance of Woodlake, which was a desired spot for waterfront properties. The lake was once home to fish, frogs, flora, fauna and many species of birds.

A Moore County judge signed the last order on March 15, demanded a temporary breach in the dam, thereby allowing a constant flow of water in the case of a major flooding event. The design could also leave a solid foundation to fully rebuild the dam in the future.

CLICK HERE TO READ A LETTER TO RESIDENTS

Under the terms of the order, Watson and Steiner had until April 10 (25 days from March 15 to share with the NC Department of Environmental Quality firm engineering plans to build a temporary breach in the dam. Officials concede this would not permanently fix the dam, but it does negate any danger should there be another major rain event in the near future. Construction on those must begin within 60 days (May 15) - and completed within 105 days (June 28), just in time for hurricane season.

With that last deadline approaching, however, it became increasingly clear Woodlake would not comply. DEQ officials confirmed to the ABC11 I-Team that Schanbel Engineering pulled its representative from the project as the firm waits for Woodlake CC Corporation to pay up. A manager at Crowder Construction added that Woodlake had not yet executed a contract offered several weeks ago.

The ABC11 I-Team also found Woodlake in deep debt to Geosyntec Engineering, owing close to $270,000. According to the Moore County Tax Collector, Steiner and Watson are also well behind on payments.

Julie Watson refused to speak to ABC11 on camera, but outside the Moore County Courthouse she vowed to welcome us to Woodlake in the future (we've never met her despite several previous calls and visits before). She told the court that Steiner, her business partner and financier, visited North Carolina last fall, and is the one responsible for sending the money needed to pay for dam repairs.

On the same day our original I-Team's report aired last year, Woodlake hired public relations firm Apco Worldwide to represent them. In a statement emailed to ABC11 on October 28, 2016, spokeswoman Devyn McDonald wrote:

"The safety of Woodlake Country Club residents, members, guests and our surrounding neighbors is our top priority...The interim remedy is intended to rapidly improve the protectiveness of the dam until a final remedy is designed, permitted, and implemented. The final remedy process will require ongoing collaboration with the state regulators until a final solution is in place. We want to emphasize that throughout this process the protection of human safety and the environment are our top priorities."

The Attorney General's Office finally filed a court injunction Woodlake after Steiner and Watson ignored a state-sanctioned Dam Safety Order after the hurricane. The DSO, issued on November 17, mandated that Woodlake must have had its engineers begin work on a temporary breach of the dam begin by December 8 and be completed by December 31, 2016. Additionally, the DSO gave the dam owners 91 days from the order's issue for engineers to submit complete plans for the repair of the dam.

According to the DSO, had the conditions not been met, the owners would face fines of up to $500 a day.

A spokesperson for the NC Department of Environmental Quality (DEQ) told ABC11 that Woodlake was given five days from December 8 to provide a written response to the DEQ with an update on their plans and work.

Nothing ever happened.

The Woodlake development, first built in the 1970s, has roughly 700 homes, two golf courses (only one functional), the dam (broken) and lake (drained). Property owners have been livid with the lack of communication from Watson, and the development's reluctance and/or willful ignorance to fix the dam.

"For anyone living on a lake or contemplating living on a lake - you can wind up in the same situation," David Watterson, a Woodlake resident and co-chair of the Restore Woodlake Committee, lamented to ABC11. "It can happen to anybody, especially if dams are privately owned."