'Millions of dollars' tied up in a Brunswick land battle between developer and state

Renee Spencer, Wilmington StarNews
·4 min read
A tract of land in Shallotte has been subject of a years-long lawsuit over stormwater permitting. While the permit was issued earlier this month, it could still be some time before its developed.
A tract of land in Shallotte has been subject of a years-long lawsuit over stormwater permitting. While the permit was issued earlier this month, it could still be some time before its developed.

For years, LDI Shallotte 179 Holdings LLC, a company based in Belville, has planned to develop land in Shallotte.

But getting a stormwater permit on land that was originally part of another development proved challenging and resulted in years of litigation.

Here’s what we know.

LDI Shallotte 179 Holdings LLC acquired the property in May 2021

The 54-acre tract of land, located along Village Point Road in Shallotte, was once destined to be phases three, four, and five of Owendon Plantation, but those plans changed when the housing market crashed. Only phases one and two were built, and over the years, the remaining tract changed hands multiple times until LDI acquired the property in 2021.

The plan was for a new development called Summers Walk

According to court documents, LDI submitted a request for an express permit review — a program designed to offer a timely review process — to the North Carolina Department of Environmental Quality (DEQ), but DEQ said Summers Walk was not eligible for the Express Permit Review because it was not the current permittee. Instead, Owendon Plantation was, and there were compliance violations with the existing stormwater permit. As a result, DEQ recommended a path that would require LDI to transfer the existing stormwater permit, resolve any compliance issues, and then apply to modify the Owendon Plantation stormwater permit, excluding phases 1 and 2, which are part of the existing development.

According to court documents, LDI followed the path recommended by DEQ, but the permit was returned with DEQ citing a need for the original permittee to also submit documents before LDI’s request would be reviewed. This resulted in a years-long legal battle.

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LDI won the legal battle over permitting

Administrative Law Judge Donald R. van der Vaart ruled that N.C. DEQ “exceeded its authority, acted erroneously and acted arbitrarily and capriciously” by excluding LDI from the express permitting program, refusing to review LDI’s application until the violations from the previous developer were remedied, and for “refusing to implement its own rules to revoke part of the existing permit” and review LDI’s application.

On November 16, 2022, van der Vaart ordered N.C. DEQ to revoke phases three, four, and five from the initial stormwater permit, and review LDI’s stormwater permit application under the Express Review program as a new permit. NC DEQ appealed that decision, but the appeal was dismissed with prejudice on February 20, 2023, upholding van der Vaart’s order.

The stormwater permit for Summers Walk has since been issued

According to Josh Kastrinsky, spokesman for N.C. DEQ, that permit was issued on August 1, 2023.

LDI has filed another lawsuit against N.C. DEQ

In a lawsuit, filed on August 3, 2023, in Brunswick County Superior Court, LDI is claiming inverse condemnation, citing that N.C. DEQ “prevented LDI from developing its property” and “restricted LDI’s right to make free and the highest and best use of its property.” LDI is seeking to recoup an amount in excess of $25,000 plus interest at the rate from and after the alleged taking of the property.

It could be a while before Summers Walk is built

While the litigation continues, Gary Shipman, attorney for LDI, said his client still intends to build Summers Walk, but “the question is when.” Shipman noted the economic conditions today are very different from when the project began in May 2021. Shipman noted interest rates are significantly higher for builders and home buyers, and the cost of construction materials has increased.

“My client already has millions of dollars tied up in this development and every day that no development activity is undertaken are further losses that my client will suffer,” Shipman said. “So – when it is otherwise reasonable to do so, I believe they will proceed with the development and seek to recover their losses from DEQ – the entity responsible for this delay.”

Kastrinsky declined to comment on the case, saying N.C. DEQ “does not comment on ongoing litigation.”

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This article originally appeared on Wilmington StarNews: Shallotte subdivision delayed due to NC DEQ permitting, litigation