It would appear the Pennsylvania company behind a number of bizarre mineral rights leasing offers in Durham and Chapel Hill has gotten on N.C. Attorney General Roy Cooper's bad side.
In a sharply worded letter mailed Monday, Cooper's office ordered Crimson Holdings Corporation—and its affiliated real estate firm Campbell Development LLC—to stop offering oil and gas leases in North Carolina. DOJ also demanded the prospective drillers, who sought to buy the mineral rights for nature preserves in Durham and the park at Meadowmont in Chapel Hill, reject and return any accepted lease offers from landowners.
"Until you can demonstrate that Campbell's practices and Crimson's leases are in compliance with North Carolina law, we demand that Campbell and Crimson immediately cease and desist from offering or accepting any oil and gas leases in the state of North Carolina," stated the letter from DOJ Special Deputy Attorney M. Lynne Weaver.
As reported in last week's Indy, the Crimson Holdings leasing offers were the first confirmed fracking bids in North Carolina in several years. They were mailed to an unknown number of Durham County landowners two months after state leaders lifted the fracking moratorium.
At least two of those landowners, the conservationist Ellerbe Creek Watershed Association and the Town of Chapel Hill, said they would not make any deals with the company.
According to Weaver's letter, there are numerous legal issues with the company's leasing offers. Neither Crimson nor Campbell are registered with the N.C. Secretary of State to do business. And, as pointed out by the Indy, the company's agent, Frank Sides, is not a registered oil and gas landman in the state.
Meanwhile, the 12-year leases offered by the company exceed the state's 10-year limit and fail to provide a copy of the state law laying out landowner protections. Weaver also complained that DOJ could not find a website for the relatively-unknown company.
"As our office is unable to reasonably locate any information on Crimson Holdings Corporation, we have serious concerns that North Carolina landowners will be unable to conduct any due diligence research or to obtain information on the ostensible company to which they are being asked to lease their oil and gas rights," the letter stated.
James Robinson, a leasing expert with Rural Advancement Foundation International, pointed out the leases would also potentially allow drilling within 300 feet of homes. Draft regulations in the N.C. Mining and Energy Commission require 650-foot setbacks, but allow companies to seek a waiver reducing the setback to 450 feet.
"I don’t want our landowners to see this and say, 'Oh boy, this is my chance to strike it rich,'" said Robinson, who is also a member of a Mining and Energy Commission study group on compulsory pooling. "Because these leases would not hold up in North Carolina."
Almost two months after fracking was legalized in North Carolina, a Pennsylvania company is offering to buy mineral rights from landowners in Durham. And since the company’s agent has not registered with state officials, he could be breaking the law.
Leaders of the Ellerbe Creek Watershed Association, a conservationist nonprofit in Durham, say they recently have received offers from Crimson Holdings Corporation, a company based in Pittsburgh, seeking to buy mineral rights on multiple tracts. The association owns 340 acres and four public nature preserves in Durham.
Crimson Holdings has also approached at least one other landowner near Falls Lake in northeast Durham County, according to documents obtained by the INDY.
The offers are signed by Frank Sides, a Pennsylvania-based agent who, as of Tuesday, was not a registered “landman,” or a representative for oil and gas interests, in North Carolina. State law requires landmen to register with DENR or they may face a civil penalty. Sides did not return a phone call from the INDY.
James Robinson, a research associate and gas leasing expert with Rural Advancement Foundation International, says the Crimson Holdings offers are the first he’s seen in North Carolina since a drilling company began signing leases about four years ago in Lee County, a suburban county south of the Triangle where geologists expect the state’s drilling to be centralized.
In June, Gov. Pat McCrory signed legislation lifting North Carolina’s moratorium on fracking. Drilling is expected to begin sometime next spring.
Chris Dreps, executive director of the watershed association, says the Crimson Holdings offers seemed like the company was “fishing” for interested parties. In response, the association’s board of directors approved a policy last week forbidding the sale of mineral rights on their property, which is mostly found within Durham city limits along Ellerbe Creek.
“It doesn’t make sense for an organization that’s protecting our land for conservation purposes to sell our mineral rights,” said Dreps. “It’s a bit of a distraction from our mission, which is to keep Ellerbe Creek clean.”
While Durham technically falls within the state’s potential drilling area—the Triassic Basin— its dense population will likely complicate efforts to frack due to state-mandated setbacks from homes and schools, experts say. State law bars local governments from imposing drilling bans within their borders.
Both lease offers in Durham include few details about Crimson Holdings, other than saying the group is seeking to “explore the natural resources” in the area. The letters offer a paltry $5 per acre leasing bonus, coupled with a 12.5 percent royalty rate, the minimum royalty required by North Carolina law.
Signing bonuses can soar as high as tens of thousands of dollars per acre in areas of the country where plentiful gas stores are confirmed, Robinson said, but details about North Carolina’s supply are too murky to fetch much higher offers.
The company gives landowners a signing deadline of Nov. 1 or until the funds slotted for the project run out.
Robinson urged landowners to be cautious and patient, pointing out they may have greater negotiating leverage once the state has more information about shale gas reserves.
“Any landowner being told you have to sign right now or you’re going to miss your opportunity is not being given accurate information,” he said. “They need to take that lease to an attorney and talk about it with family members. That type of pressure is a tactic that companies use to make landowners feel like they’re running out of time.”
Hope Taylor, executive director of Clean Water for N.C., said landowners should also be wary of unregistered landmen such as Sides. The state registry was one of several items her group, an environmentalist nonprofit that opposes fracking, successfully pushed to save last year in the N.C. General Assembly.
The registry was intended to discourage predatory drilling operations in North Carolina. “We have a lot of concerns about someone who has not even taken the time to register in North Carolina making these kinds of approaches,” Taylor said.
Taylor added that, while it’s surprising for a company to be making lease offers in Durham, it’s important for Triangle residents to be prepared should gas companies contact them. “If anything, it says they’re pretty bold if they think it’s ok to reach out to land conservation groups,” Taylor said. “Do they not think there’s opposition down here?”
The state’s Mining and Energy Commission, which has created a draft of fracking regulations, will hold public hearings on the rules next month. The first scheduled hearing is set for Aug. 20 at N.C. State University’s McKimmon Center in Raleigh.
Access to care and crisis intervention training for law enforcement officers top the business plan for Alliance Behavioral Healthcare, the state-funded agency charged with disbursing public mental health dollars in Wake and Durham counties.
Durham Commissioner Michael Page, a local pastor who sits on Alliance Behavioral Healthcare’s board of directors, says the group is pushing an array of services to meet longtime service gaps in the community. Page said substance abuse treatment is his top priority for Durham.
“I just think right now we’re in a stage of the game where people need to be able to access services and be able to access it fairly readily,” he said.
Alliance serves a combined population of about 1.7 million—187,000 of which are Medicaid eligible—in Durham, Wake, Cumberland and Johnston counties.
According to Alliance’s business plan, the group will focus on speeding access to mental health providers, citing seven- to 10-day waits after residents called for services. Alliance execs also say they will roll out crisis intervention courses for law enforcement officers in the region, noting residents with mental illness are sometimes taken to jails when they would be best served in a mental health care facility. The report did not offer specifics about the frequency of such events.
Those were just a few of the goals contained in Alliance’s business plan, which also reflected a statewide push for community-based treatment methods, meaning supported housing options, employment and in-home treatment teams intended to head off institutionalization.
State health officials negotiated a settlement with the federal government in 2012, pledging to spend an estimated $287 million on job training, treatment and housing for people with mental illnesses over eight years.
If state lawmakers renege on the settlement, they risk a lawsuit from the U.S. Department of Justice. The state settlement stemmed from a Disability Rights North Carolina complaint that the state institutionalized too many of its residents for years, rather than promoting community programs that encourage independence.
Nevertheless, the Republican-controlled N.C. General Assembly has cut roughly $100 million from mental health funding in the last five years, state Rep. Verla Insko, D-Orange, told INDY Week in June.
Meanwhile, groups like Alliance, referred to as local management entities or LMEs, are under intense scrutiny from mental health advocates statewide, who worry the budget-strapped state’s reliance on private companies such as Alliance to manage public mental health cash will lead to increasing costcutting.
Orange County’s LME, Cardinal Innovations, is already the subject of a federal Office for Civil Rights investigation into whether its denial of Medicaid reimbursements for undocumented immigrants breaks the law.
The Alliance business plan presented Monday did not include financial information about the group. Alliance CEO Ellen Holliman could not be reached for comment on the business plan this week, but Page says he believes the agency is doing the best it can despite legislative rollbacks.
“Until they can fine-tune this process, it might very well be the best we can do right now,” Page said. “We have to have the services.”
(Update, 9:03 p.m.: The Indy independently confirmed Lozoff's death through a musician and friend of his in Hawaii.)
Bo Lozoff, who ran Kindness House, an intentional community near Durham for ex-offenders and spiritual seekers, was killed yesterday in a motorcycle crash in Hawai'i, where he lived, according to news reports.
Lozoff, 65, died after his 2003 Suzuki motorcycle was struck by a 1999 Lexus SUV whose driver failed to yield the right of way and pulled in front of him. Neither the driver of the car nor the passenger were seriously hurt. News reports quoted police as saying Lozoff was not wearing a helmet.
In 2008, the Indy published a story critical of Lozoff after several female volunteers and one female parolee at the Kindness House came forward and alleged that Lozoff had sexual encounters with them during one-on-one counseling sessions, in which he initiated kissing, touching, and oral and manual sex as a method of spiritual healing.
A prison minister and author, Lozoff moved to Hawai'i around the time the story was published. He gave tours of lava fields and performed in a country band. He recently released his fourth CD, Bo Goes Country.
In 2004, Lozoff was the subject of an Indy story about his efforts to raise $1.5 million for a bio-diesel initiative in Hillsborough that would employ ex-offenders.
The private water company Aqua North Carolina has asked to buy water from Chatham County that could be used for the 751 South project.
Chatham County Commissioners voted 4-1 to direct staff to draft a contract that would allow Aqua North Carolina to buy 850,000 gallons per day from the county. Sally Kost was the lone no vote at the Nov. 19 meeting—the Monday before Thanksgiving.
Kost told the Indy tonight that she specifically asked an Aqua representative if the the water allocation had anything to do with 751. Kost said the Aqua representative responded, "We've talked with them," adding that the company would take a "regional approach," including Durham, to reselling the water.
Here's another twist: Chatham County buys its water allocation from Durham. So in effect, Aqua would sell Durham water to not only Chatham customers, but it could also sell the water back to Durham customers, possibly to those in the proposed 751 development. The water allocation comes from Jordan Lake.
Durham has not finalized an agreement with Chatham County on water allocations.
Kost also blogged about the meeting on her website.
The controversial 751 South development would include 1,300 homes and as much as 600,000 square feet of retail development on 167 acres in the sensitive Jordan Lake watershed. In February, the City of Durham rejected a request from SDD to provide water to the development.
In June SDD and its lobbyist approached a state lawmaker, Tim Moore of Cleveland County, to sponsor a bill forbidding a city from denying water and sewer service to a project in its designated “urban growth area” outside municipal limits.
751 South lies in such an area in southern Durham County. The bill failed.
In July, Durham County Commissioners agreed to provide sewer to 751 South.
Kost told the Indy that she advised her fellow commissioners that "before we do anything we need to talk to Durham."
The Indy has confirmed with a Durham official that Chatham County contacted Durham's utilities department about the issue today.
It's notable that such a significant request was put on the agenda for a meeting just days before Thanksgiving. In addition, Kost noted, the title of the agenda item was vague: "A discussion and vote on Aqua North Carolina's request to purchase capacity in the county's water facility."
This post originally stated that Cal Cunningham, an attorney for SDD, approached Tim Moore. The story has been corrected.
Check back for updates.
This is the story of Lincoln Apartments as Southern Real Estate Management & Consultants tells it: The majority of the 50-plus households at the low-income housing community don't pay rent, or if they do, it's late. And without rent collections, the real estate company can't pay its bills and must evict all the residents, effective Oct. 31.
But residents of Lincoln Apartments told Durham County Commissioners a much different version of events Monday night. And the residents' comments raise questions about the company's financial practices and overall management of the property.
"We are not here to hand over our community," said Bernadette Toomer. "We're here to fight."
The property manager, Leila James, has accepted rents in cash, but not provided receipts, residents say. James also allegedly wrote—and then rewrote—leases that drastically changed the terms. And at the very least, Southern Real Estate Management & Consultants failed to hold up their end of the deal in providing a safe, clean living environment.
Now residents want Lincoln Apartments to stay open while city and county officials investigate the financial records and other aspects of the management company.
Southern Real Estate Management & Consultants, which oversees the property for the now-defunct Lincoln Hospital Foundation, sent eviction notices to residents on Sept. 28, telling them they had a little more than a month to leave their homes. Some residents have lived at Lincoln Apartments as long as 30 years. At least 50 households, as many as 200 tenants, received notices.
Lincoln Apartments on Durham's East Side serves low-income residents. Rents range from $350 to $500 a month. The apartments are privately owned and are not subsidized, operating solely on rent collections, Howard Williams of Southern Real Estate told the Indy last week.
Although the nonprofit foundation dissolved in 2010, according to Secretary of State records, it still ostensibly operates the apartment complex. And as a nonprofit, it is exempt from paying property taxes.
But even with that financial break, Williams told the Indy and residents the complex has to close because rent collections are insufficient to cover the water and electric bills. Williams alleged that in some months as few as 25 percent of residents pay rent.
However, without a proper accounting of the payments—and confirmation of where the money went—it is difficult to determine the extent and truth of the management company's financial problems.
James could not be reached by the Indy for comment last week. A sign on the property manager's door stated the office was closed due to illness.
Shirekia Shackleford said she was allowed to move in on Sept. 17, only to receive the eviction notice on Sept. 28. "We don't have the money laying round to move every 30 days," she said, adding that she received broken appliances in her apartment. "I'm unemployed and trying to leave within my means."
There are also inconsistencies in leases, residents said. Bernadette Toomer, who has lived at Lincoln Apartment for four months, showed the Indy a copy of her original lease, signed this August. It ran from Aug. 31 to Nov. 30, 2012, and showed that Toomer paid a $450 security deposit.
Yet Toomer said that just weeks ago James asked her to sign a new lease; this one was backdated to be effective from Aug. 1 to 31, 2012. It also indicated Toomer paid no security deposit.
Look for additional coverage in the Oct. 10 edition of the Indy.
The N.C. Board of Elections has ruled that the mailers produced by the Durham Partnership for Progress were not coordinated with any candidates supported by the local SuperPAC.
As the Indy reported last week, several complaints had been filed with the Durham Board of Elections, which forwarded them to the state level, alleging that the Partnership was working in concert with Durham commissioner candidates Michael Page, Brenda Howerton, Joe Bowser and Rickey Padgett.
The Partnership has received more than $54,000 from Southern Durham Development, which is supporting the four candidates because of their stance on the 751 South project. The Partnership is tied to Southern Durham Development through Tyler Morris and Alex Mitchell, who work for both organizations.
The Partnership is an independent expenditure committee, also known as a SuperPAC, because it can raise and spend unlimited amounts of money to advocate for candidates as long as it does not coordinate with them.
Southern Durham Development is the company behind that development; incumbents Page, Howerton and Bowser voted to approve a controversial rezoning of land in the sensitive Jordan Lake watershed that made 751 South possible. Padgett, a captain in the Durham County Sheriff’s department, has also spoken in favor of 751 South.
Woodard says he learned Friday that the stack of forms he says he sent Feb. 22, within the required 10-day period, had not been received by those offices.
"I mailed them. They didn't receive them. It's my responsibility to get them in, and I'm going to take care of that today," Woodard said.
The commission needs a Statement of Economic Interest and the SBOE needs a Statement of Organization, which includes a treasurer's name and bank information.
Woodard, when contacted by the Indy, said he was on his way to Raleigh to meet with officials and make sure they have all of his paperwork.
Sutton's full press release is below:
Southern Durham Development, which is behind the proposed 751 South development, has contributed more than $50,000 to The Durham Partnership for Progress, a Super PAC.
Here is the campaign finance filing, due today: Partnership_for_Progress_30April2012.pdf
As the Indy reported last week, DPP has ties to Southern Durham Development through Tyler Morris. He is a majority shareholder in Southern Durham Development and assistant treasurer of Durham Partnership for Progress.
DPP is behind a mailer supporting Durham County Commission candidates Joe Bowser, Brenda Howerton, Rickey Padgett and Michael Page. Bowser, Howerton and Page all voted to approve the controversial rezoning of 751 South, over the strenuous objections of many citizens and the Durham Planning Commission.
DPP spent $51,500 on the mailer, including $50,000 to Nexus Strategies, a political consulting group in Raleigh, and the Department of Marketing, which advises clients on branding, social media and website design.
Check back in Wednesday's edition of the Independent Weekly for more news about the Super PAC and the commissioners' race.
If you’re a Durham County resident, you may have received campaign mailers supporting the slate of Michael Page, Brenda Howerton, Joe Bowser and Rickey Padgett for county commissioner. Here's the mailer:
That mailer was paid for by the innocuously named Durham Partnership for Progress. But innocuous it is not: DPP is actually an independent expenditure political committee—commonly known as a Super PAC—organized by developer Tyler Morris, a majority shareholder in Southern Durham Development.
And not coincidentally, DPP is bankrolled, so far, by Southern Durham Development, which plans to build the controversial 751 South project in the sensitive Jordan Lake watershed.
Also not coincidentally, Page, Howerton and Bowser—all incumbents—voted to approve a controversial rezoning that allowed 751 South to move forward. Padgett supports the project; he also applied for an appointment to the commission last year to fill the seat held by Becky Heron, who resigned because of illness. (The commissioners instead appointed Pam Karriker, who is not running for election.)
Morris is listed as DPP's assistant treasurer. Rhonda Sisk, the DPP treasurer, lists an address that is Southern Durham Development's company office.
Here is the statement of organization: statement_of_organization.pdf
The first donations to the DPP are from Southern Durham Development: $2,500 in-kind and $100 in direct funds. expenditures.pdf
The $2,500 went to pay for a survey by Public Policy Polling that asked several questions of potential voters, including if they would vote for commissioner candidates who support 751. The survey also asked if the developers should sue the City of Durham.
In February, six Durham City Council members voted unanimously to reject the developer's request that the city provide water and sewer service to the 751 South. Councilman Howard Clement was absent due to illness.
Super PACs such as the Durham Partnership for Progress can receive unlimited funds from unlimited sources and spend unlimited amounts of money, according to Michael Perry, director of the Durham County Board of Elections. The only stipulation is that the Super PAC must not directly or indirectly make contributions to candidate committees or other committees that make contributions to candidates. Super PACs cannot coordinate with candidates, although that distinction is often not apparent.
Durham Partnership for Progress complies with that requirement by stating on the mailer that it is not endorsed by any candidate.
The DPP Super PAC sets a troubling precedent in Durham. It can accept enormous amounts of money from the wealthy development community—including out-of-towners like Morris, who lives in Raleigh—and use it to influence local elections.
First-quarter campaign finance reports are due April 30, the contents of which could further demonstrate the reach and influence of the DPP Super PAC.