Five individuals, Frederick Cubbage, Ronald W. Sutherland, Barny Bernard, Jr., James D. Gregory, and myself stood against the Board of Trustees of the Endowment Fund of North Carolina State University at Raleigh (the Board of Trustees) and the North Carolina State Natural Resources Foundation, Inc. (the Foundation), in Wake County Superior Court on Tuesday, November 12, 2013, in opposition to the sale of Hofmann Forest. We asked the Court to declare that the sale of this large and precious piece of public land either cannot occur or, at minimum, cannot occur without compliance with the North Carolina Environmental Policy Act (commonly known as SEPA), and all other applicable laws. The case was heard by Judge Shannon Joseph.
We argued that:
1. The sale of Hofmann Forest is subject to SEPA and the Board of Trustees and the Foundation failed to comply with SEPA;
2. That we have standing to bring this action before the Court;
3. That we are entitled to a Preliminary Injunction to stop the sale;
4. That we will likely succeed on the merits; and
5. That we will suffer irreparable loss if the sale is not stopped.
Judge Joseph did not grant our request for a Preliminary Injunction, apparently because she believed we did not demonstrate that we would be likely to succeed or that we did not prove evidence of irreparable loss if the sale is not stopped. She stopped short of determining whether we could continue our case by not ruling on the Board of Trustees’ and the Foundation’s motion to dismiss based on our standing or whether the sale is subject to SEPA.
Lawyers for the Board of Trustees and the Foundation at first argued that the property was not public land and therefore not subject to SEPA. We produced an opinion letter from then Attorney General Rufus Edmisten, stating clearly that Hofmann Forest was state owned property and was therefore exempt from local tax under the NC Constitution. After that, the Lawyers for the Board of Trustees and the Foundation appeared to drop their contention that Hofmann Forest was not public land and then tried to insist that the sale did not trigger SEPA.
They argued vehemently that there were no plans for development of the property by the buyer and that the buyer’s intention was to keep Hofmann Forest as a working forest. They cited the contract for sale as evidence of the buyer’s intention. Unfortunately, the contract for sale does not prohibit or restrain the buyer, and particularly any future purchasers, from undertaking any activity they wish on the property. The referenced section of the contract on the buyer’s intent is non binding and only says they will try to do some things that may preserve part of the Forest. It also says that these are not deed restrictions and will not be binding on any future buyers.
Lawyers for the Board of Trustees and the Foundation also argued that the sale itself did not trigger SEPA. SEPA includes two very broad categories that cover virtually every state action: “any action involving the expenditure of public moneys” and “any action involving . . . use of public land”. It is simply common sense that the sale of the largest State-owned tract of land in North Carolina and the largest research forest in the world to a private corporation is a use of public land. Also, in a common sense evaluation, it is clear that sale is the ultimate use of public land. It is being used to get money. The money would not flow if the land were not sold.
It is readily foreseeable that, once in private hands and with no significant deed restrictions, the private owner would then seek the highest and best use of his property. Such use would clearly significantly affect the environment of this state. As such, the act of sale by the Board of Trustees would set into motion land use changes based on the recognized principle of highest and best use, which would not happen in the absence of a sale. Thus, the sale directly leads to negative impacts to the environment of the state. Though SEPA may not directly include the term “sale” in its text, the term “any action” certainly does include sale. Sale of land certainly falls under the descriptor “any action.”
We hope the Court will concur that SEPA does apply. If it does, the Board of Trustees would have to conduct an Environmental Assessment (EA). Unless they can show a Finding of No Significant Impact (FONSI), they will have to conduct a full Environmental Impact Statement (EIS). Instead of being able to claim that there will be no significant changes in the Forest as they did in Court Tuesday, they may have a larger hurdle to overcome based on a newly discovered document.
After Tuesday’s Hearing, an Investment Prospectus came to light, apparently prepared by the buyer, Hoffmann, LLC. The Prospectus is not dated, but it presents an intent to develop Hofmann Forest in a manner completely at odds with what was presented in Court by Lawyers for the Board of Trustees and the Foundation and in public statements by University officials. We have to wonder if Judge Joseph would have come to a different decision on our request for an injunction if she had the benefit of this Prospectus in evidence. Unfortunately, the Hearing process does not include Discovery.
At this point, we do not know if the Board of Trustees, the Foundation, University officials, and their Lawyers knew of the existence of the Prospectus prior to the Hearing last Tuesday, or even earlier. The fact that the contract for sale negotiated by the Board of Trustees, in concert with the Foundation, University officials, and their Lawyers appears to be completely compatible with the newly discovered Prospectus, implies that all or some of these parties knew of the Prospectus, or the buyer’s intent all along, or were they were duped by a crafty buyer. Either way, it does not leave the Board of Trustees, the Foundation, University officials, and their Lawyers in a good place. Who, if anyone, knew of the buyer’s plans for the Forest, as presented in the Prospectus, and when? Did they try to hide it? Did they misrepresent the buyer’s intentions before Judge Joseph? If not, are these parties so naive as to believe the buyer’s stated intention with no contractual assurance? Discovery will be the required if our case does go forward. Discovery will uncover who knew of the Prospectus and when.
Dean Mary Watzin argued on camera Friday that restrictions on deeds are not usually included in sales contracts. Has she ever bought or sold real property herself? Inclusion of restrictions in a sales contracts is probably the most common means of placing a restriction on a deed. One example many should be familiar with is subdivision covenants. It is common practice.
The Board of Trustees, the Foundation, and University officials negotiated a contract for sale that places no significant restrictions on the deed that would prevent conversion to agriculture, residential and commercial development, mining, and many other destructive uses as contemplated in the Hofmann, LLC, Prospectus. In fact, the Prospectus reads like a worst-case scenario to those of us who are concerned about the Forest and the impacts on the region. The negative impacts on Hofmann Forest itself, bad as they would be, are only a small part of the issue. The much larger negative impacts will be felt all over the entire central coastal region.
Hofmann Forest is large, about 80,000 acres. It is a large percentage of three watersheds, The New River, the White Oak River, and the Trent River (Neuse tributary). All of these watersheds will be significantly negatively impacted by the land use changes contemplated in the Prospectus for Hofmann Forest. In 2007, the White Oak River Basinwide Water Quality Plan stated that 100 percent of the saltwater miles and 44 percent of the freshwater miles of the White Oak River are impaired. The main reason for the impairment – stormwater runoff from agriculture and development. The New River and Neuse River are also impaired and for the same reasons. We all see manifestations of these water quality issues in fish kills and in closed shellfish waters. Sometimes waters are even closed to swimming! Do we want more of this? The Board of Trustees, the Foundation, University officials, and Hofmann, LLC, appear poised to make this a reality, if the Prospectus represents the buyer’s intent, and this sale is completed.
Who will be affected outside Hofmann Forest? All coastal waters and communities downstream of Hofmann Forest would directly feel the impact of the proposed land use changes outlined in the Prospectus. This includes the New River, the White Oak River, the Trent River, the Neuse River, the estuarine systems of all these rivers, Pamlico Sound, Bogue Sound, Topsail Island, Bear Island, the Atlantic Ocean, Emerald Isle, Atlantic Beach, Shackleford Banks, Portsmouth Island, Ocracoke Island, Jacksonville, Sneads Ferry, Camp Lejeune, New Bern, Swansboro, Oriental, and much more. Availability of drinking water and the quality of that water will be diminished.
There will be secondary impacts on lands and waters surrounding the Forest. The transportation network and public services in Jones and Onslow Counties will see an increased burden, albeit set off somewhat by additional taxes. Development pressure on adjacent land will increase, compounding the negative impact of development in Hofmann Forest. The state will lose a significant historical and cultural resource. Hofmann is unique as a research forest.
Hofmann Forest is a connecting link in a much larger ecosystem, Croatan-Hofmann-Camp Lejeune-Holly Shelter. When linked, they create an ecosystem that is greater than the sum of its parts. We need large connected land tracts to preserve large habitats for species that can only thrive in a large, regional ecosystems. Because surficial aquifers are directly connected to surface waters in this region, we could regionally see a loss of quality in and availability of drinking water if the development in the Prospectus is allowed.
The State of North Carolina has embarked on a major concerted effort to educate the public on water quality issues. They have done a good job. Much of their justification and reference come from studies done by NCSU professors and students. Somehow, the Board of Trustees, the Foundation, and University officials missed the state’s education efforts. North Carolina’s Aquariums and Estuarium (Washington) do a great job of explaining the strong correlation between land use and water quality. More intense land use reduces water quality and increases stormwater runoff. Stormwater runoff is the single largest source of water pollution. In coastal systems more intense land use equates to more fish kills, more closed shellfish waters, and reduced estuarine nursery function. North Carolina presents these as simple facts, repeated again and again, in North Carolina policy, North Carolina education efforts, in North Carolina laws and rules, and even in grade-schoool earth science textbooks. Again, somehow the Board of Trustees, the Foundation, and University officials missed North Carolina’s outreach efforts for its citizens to protect water quality, rules put in place the further the state’s goals of protecting and preserving public lands, the State Constitution, and their grade-school earth science textbooks. The alternative is that they simply chose to ignore them, seeing only dollar signs.
Based on this, one has to question whether the Board of Trustees, the Foundation, and University officials are good stewards of the state’s resources and team players in North Carolina’s great overall effort to protect and preserve its lands and waters. They seem willing to contravene the goals of this state as outlined in the State Constitution and to try to avoid the laws and rules of this state, particularly SEPA.
As such, beyond stopping this sale, a further goal should be to get this property out of the hands of the Board of Trustees, the Foundation, and University officials altogether. Hofmann Forest should remain intact, to be held by a true conservation entity in perpetuity. The military should still be allowed an easement to do low-level operations there. That would help to offset the cost of wresting the Forest from the the Board of Trustees, the Foundation, and University officials. The Forest should continue to be used for forestry research, but it should also be more open to the public. Currently, only a select few can enjoy recreational opportunities in Hofmann Forest. It is public land and should be made available to the public through the North Carolina Wildlife Gamelands program.
Please join us in our effort prevent the sale of Hofmann Forest.
John L. Eddy, PE
Jones County Citizen and Farmer
Onslow County Landowner