Property Owners Buy Land Harbor

At a meeting of the POA Board of Directors held on July 27, 1974, Herb Isaac, then General Manager of Land Harbor, stated: “CCC is experiencing financial difficulty and is asking that POA assume full operational management of the Land Harbor recreational facilities, road maintenance, garbage collection, fire and security protection.”

On November 2, 1974, the Board “discussed plans for purchasing all facilities from Carolina Caribbean Corporation and agreed that the following should be included in the negotiations: sales office, maintenance building, the rally area...excluding the unsold lots.” By January 11, 1975, the price of $600,000 had been established and the possibility of getting a 20 - 30-year mortgage was considered. Also considered was whether to levy a one-time special assessment of $500 per lot, or, as Mr. Isaac suggested, increase the annual assessment by $50. No agreement was reached and the matter was dropped.

The financial problems that had plagued CCC finally culminated in their filing for bankruptcy. In September 1975, Land Harbor was placed under lock and key. A dinner party was under way in the Recreation Hall when the diners were evicted and the Hall was locked. A business meeting, under way in the main office, was interrupted and the participants were asked to leave so the office could be locked. Golfers were asked to leave the golf course. The bath houses were locked and chains were placed across some of the roads. It appeared that the end had come for Land Harbor.

Through the efforts of Robert Arnold, Ernie Hayes, Charles Wilson (M-66) and Boyd Coffey, the locks, which were put on Friday, September 12, 1975, were removed Tuesday, September 16, 1975. These actions convinced the property owners that something must be done to protect themselves and Land Harbor. At the suggestion of Charles Wilson, Bob Arnold, Merrill Wiles, Zeb Vance and other interested members, POA employed Banks Finger, an attorney from Boone who had done work for Beech Mountain. His first task was to deal with the lockout problem.

After many hearings in the CCC bankruptcy case, the referee awarded all of Land Harbor to the Bank of North Carolina with the understanding that the bank would also assume a First Mortgage against Land Harbor by Mortimer and Payne in the amount of $123,000. The bank accepted this in lieu of claims against CCC in excess of $1,800,000.

Numerous parties were interested in buying Land Harbor, looking more for a quick profit than the development of a viable community. Banks Finger, who by that time was President of POA, was asked to begin a dialogue with the Bank of North Carolina expressing the property owners’ interest in Land Harbor. After much discussion, the bank agreed to sell to the POA all of the unsold properties (platted) west of US 221 for $600,000 and a $1.00 per year, five-year lease with option to buy the utility company, the 243 acres east of US 221, the amenities which included all buildings, roads, bath house, and the nine-hole golf course and the land reserved for the back-nine golf holes. POA would also assume the $123,000 lien held by Mortimer and Payne.

As a not-for-profit organization, POA could not engage in the development and sale of property; therefore, it was decided to create a separate organization for this purpose. In April 1976 the Land Harbor Development Association (hereinafter referred to as LHDA) was chartered with Banks Finger, Al DeBell, Bob Arnold, Charles Wilson and Merrill Wiles as founders. With this action LHDA became responsible for the debts, development, and sale of property.

POA assumed management and operational functions of Land Harbor under a $1.00/ year lease agreement with LHDA.

With no working capital, the Board of Directors of LHDA began serious negotiations for the purchase of Land Harbor. In the spring of 1976, a fund-raising campaign was started and by June 1, 1976, a total of $170,000 was contributed by 176 property owners. These initial contributors were given certificates of investment for their contributions. Though they assumed there was little likelihood of getting their money back, they were finally issued bonds for the certificates and these bonds were ultimately redeemed. The remainder of 1976 and 1977 were lean years, with no operating funds and few sales. At the suggestion of property owners, it was decided to sell first mortgage bonds in the amount of $800,000 to pay for the property on the lake side of US 221 and to get some operating money. These bonds paid 8% interest and entitled the holder to a proportionate share of the profits, if any.

Charles Stuart organized a bond sales campaign, which, though diligently pursued, fell far short of the $800,000 goal. The first bonds sold were $500 bonds. Only a few property owners purchased these bonds. When it was learned that only bondholders could vote on LHDA matters, property owners requested that smaller denominations be issued. Thus some $100 and later some $50 bonds were sold. Less than 500 property owners bought bonds to help save Land Harbor. The failure of the bond drive required that LHDA
negotiate a promissory note for $291,000 with the Bank of North Carolina and a similar note for $40,000 with Northwestern Bank. These notes were secured by nonvoting bearer bonds.

In 1978, LHDA exercised its option to buy all the property it had been leasing for $600,000. No payments were due nor interest charged on this purchase until June 1981. Utility bonds and general obligation bonds were issued to raise funds to retire these bonds.

Between 1976 and 1981, LHDA incurred debts as follows:
Bank of North Carolina $1,200,000
Mortimer and Payne 123,000
Bank of North Carolina 219,000
Northwestern Bank 40,000
Total debts $1,654,000

Under the management of LHDA, lot sales were sufficient to make annual payments of the interest on these bonds as well as continue the development and improvement of Land Harbor. By 1985, the following improvements had been made and paid for:

1. Constructed the building occupied by the Sales Office, Security, and Operations.
2. Constructed a bathhouse in Highland Hills.
3. Added approximately five miles of new roads.
4. Extended the sewer, water, and electric system to serve Laurel Brook, Grandview, the Town Houses,
and part of Laurel Hills.
5. Constructed a sewer pumping station for High Crest.
6. Constructed a sewer pumping station for a part of Linville Meadows.
7. Completed the back-nine holes of the golf course.
8. Installed a new well which adds approximately 100 gallons per minute to the water system.
9. Constructed the teen pavilion at the Point.
10. Constructed four new tennis courts at Overlook Park.
11. Constructed six shuffleboard courts at Overlook Park.
12. Made much-needed repairs on the dam.
13. Paved golf cart paths and parking area at the Golf House.
14. Added a building in the maintenance area.
15. Increased the capacity of the sewage treatment plant by 50% so that the capacity was 75,000 gallons per day.

During this period under $1.00/year lease from LHDA, the POA established itself as the operator of Land Harbor. For the first few years there was some overlap in the membership of both boards.