This is the second of a two-part story. The first installation ran Thursday.T he sales pitch is accurate: Woodlake Country Club and Resort development is exclusive. Visitors check in with a guard to enter the first gate. They use a code, which changes daily, to enter a second gate that leads to hundreds of upscale homes. Most have tidy, meticulously edged front yards brightened by colorful, well-mulched flower beds. Residents who could afford homes on the waterfront have built back decks for summertime parties and piers to tie up their pontoons and boats.
But what the sales pitch no longer mentions is that Lake Surf, the crown jewel of the development, is now a 1,200-acre slab of mud. The water has been drained because the high hazard dam is so dilapidated that if it were to fail, more than 550 homes and businesses downstream would be inundated. The country club’s initiation fee of $25,000, plus monthly golf and lake access dues, no longer seem worth the money.
With the dam’s condition continuing to degrade despite court-ordered repairs, on June 9 state officials seized control of Woodlake Dam from its owners after the NC Department of Environmental Quality issued an emergency declaration regarding its safety.
The dam and lake are privately owned by Woodlake CC, a troubled company with a dicey financial and environmental history. The company’s two principals are incommunicado; one is based in Germany and the other refuses to answer phone calls.
But a trail of documents from the NC Secretary of State’s office and bankruptcy court shows the the company has eluded accountability through various spinoff real estate ventures couched inside one another like Russian nesting dolls.
“The web of legal entities,” said David Watterson, a Woodlake resident and co-founder of the Restore Woodlake Committee. “It’s almost impossible to entangle.”
T he only thing taking on water at Woodlake is Woodlake CC.
An heir to the bankrupt Woodlake Partners, the newly christened Woodlake CC is bankrolled by German investor Steiner and Co. Owned by Illyah Steiner, the company purchased in 2015 Woodlake Partners at auction for $500,000 — that’s a mere half a million dollars for a lake, dam, country club, two golf courses, 600 lots, clubhouse and office. It was the sole bidder.
But Woodlake CC still features a long-time player in the resort’s turbulent history: Julie Watson. After her stint as co-owner of Woodlake Partners, she became Woodlake CC’s vice-president, and formed yet another company, J & Partners. In turn, that company became a shareholder in Woodlake CC, cementing Watson’s power in the venture.
Any fresh influx of cash, though, has not offset the mounting debt. Woodlake CC owes at least $183,000 to Moore County in back taxes, $270,000 to an engineering firm for a proposal to fix the dam and $40,000 to yet another consultant. It is $40,000 in arrears to Modern Turf Company, which fixed greens on the resort’s only semi-functioning golf course. The dam repairs, had the company undertaken them as promised in court, would have cost upward of $2 million.
But before there was Woodlake CC, there were no less than seven real estate ventures involving Woodlake, all owned or managed by Watson and Ingolf Böx (pronounced Bahk), now broke and living in his native Germany: Eye & Tee, Lautex, GER Investments, Carolina Corporation, Woodland Real Estate Group, Woodlake Partners, and the Carolina Golf Development.
Several of these companies were dissolved by the Secretary of State’s Office and the state Department of Revenue because they had not paid their taxes. Two others went bankrupt.
Woodlake Partners declared bankruptcy in 2014, shortly before Carolina Golf Development did the same. In a complicated bankruptcy filing, the bankruptcies were entwined in a land and shareholder dispute involving an insolvency administrator, Böx and Böx’s then-wife. At the time of its bankruptcy, CGD listed $6.2 million in liabilities and only $290,000 in assets. The company hadn’t even paid its $250 Sprint bill.
“Where is the business logic?” asked Watterson, a Woodlake resident. “How do they make money?”
Fewer people are enrolling in or renewing their golf memberships — upward of $1,500 a year — according to the Restore Woodlake Committee, because the turf is in such rough shape. Nor is there a lake to generate access fees. Without that revenue, lot sales, or large loan, Woodlake CC will likely fail, as well.
The company’s insolvency has now trickled down to the residents. Because of the lack of upkeep not only of the lake and dam, but the golf courses, Woodlake residents have seen their property values plunge by nearly 10 percent. While most Moore County homes are selling in three or four months, Woodlake property is languishing on the market for nine months at discounted prices.
The Restore Woodlake Committee approached both the bankruptcy court and the company itself about buying the resort, including the lake and the dam — and the environmental liabilities. But the Woodlake Partners — and now Steiner and Co. — initially refused to sell. Now the company is ignoring the committee’s requests, Watterson said.
“Think about this from a business perspective,” Watterson went on. “You have a liability. A group can make it all go away. Now the golf course and other assets increase in value so you can sell your lots. I would say, ‘Where do I sign?'”
On a recent hot summer afternoon, one man was readying his home for its new residents. He estimated his home has lost at least $150,000 in value. The mud, the neighborhood politics, the controversy: He needs to get away. “I’m moving,” said the man, who asked not to be named. Yet there are few takers for a mudfront view, even at a discount. So he’s renting his house. Maybe in a few years, when he returns — if he returns — the dam will be fixed and lake will be full again.