Usually when you make an investment, the worst thing that could happen is that you lose all your principle. But Perry Homes could loose a hundred times more than they paid for Woodridge Village land. That takes special talent.
Out-of-Pocket Costs
The land that Woodridge Village sits on didn’t cost much; much of it was wetlands and many streams converged there. Regardless, a Perry Homes subsidiary, Figure Four Partners, bought the land. Montgomery County Appraisal District values the two main parcels at less than a million dollars. Together they comprise more than 80% of the 268-acre project. (See screen captures below from Montgomery County Appraisal District website.)
Real Costs Could Be 100X Greater
Now let’s look at the real costs to Perry. Just to screw up the land, they paid for:
Excavating two detention ponds (out of five they promised)
Soil tests and a geotechnical report
A mile of pavement to the middle of nowhere
Two large box culverts
Storm drains
Let’s say that cost another five million.
But all of that contributed to the flooding of approximately 200 homes in May and 350 in September. Let’s assume the damage to each home totaled $100,000. That comes to about $55,000,000.
Furniture, appliances, rugs, window coverings and other contents? Let’s assume an average of $40,000. That would total another $22,000,000.
Let’s also assume that 300 cars flooded. Average cost – $30,000. Bingo. $9 million.
Now let’s estimate the reduced marketability of homes that flooded. To do this, let’s assume an average price of $200,000 per home and a 20% reduction. That would cost homeowners $40,000 each in the market value of their homes. That’s another $22,000,000.
If juries rule in favor of the flood victims, that million dollar investment could add up to more than $100 million in potential liabilities…before any penalties for negligence and/or gross negligence kick in.
But perhaps Perry Homes went too far. People did notice. The wetlands that they conveniently ignored fall under the jurisdiction of the Army Corps. And the Corps is now investigating potential violations of Section 404 of the Clean Water Act. That could get expensive all by itself.
Like Building Homes at the End of a Gunnery Range
It just keeps getting worse for Perry. This was kind of like buying land to build homes at the end of a gunnery range. A little risky.
But it’s too late to rethink that decision. No one will ever want to buy a home on this site. It’s less marketable than swampland near Chernobyl.
There’s another rule of thumb in business. When you find yourself in a hole, stop digging. And that’s exactly what Perry has done. They have stopped work on the site for months. Work on detention ponds that would help protect people downstream from future flooding is going undone.
That means the numbers above could balloon with the next big rain. Or a negligence ruling by a jury. Yep, we’re in double Jeopardy now.
Career-Limiting Moves
Whoever made the decision to develop Woodridge Village definitely made a CLM (career-limiting move). At this point, even Perry Homes employees not associated with the decision must worry about their Christmas turkeys. Few careers or companies survive blunders that become case studies for how not to do something.
Eroding Profit Margins
Because of faulty assumptions and corner cutting, Perry Homes put itself between a rock and a hard place. They’ve managed to turn a million dollar investment into a potential $100 million liability. They can’t develop this property profitably now. And they can’t sell it. Who would want to buy this land and inherit the liability every time a storm cloud floats by?
To protect downstream homes from flooding, they would have to expand the detention ponds by at least 40%. And that would eliminate so many homesites that costs could exceed income. I say “at least” because the issue is not just Atlas-14 compliance. While digging the S2 detention pond, contractors hit water that’s not going away.
The S2 Detention Pond has lost about 20-30% of its capacity. The bottom 3-5 feet have been filled with ground watersince contractors started digging to the target depth.
That means they can’t achieve their detention goals by going deeper; they’ll have to go wider. And that will cut into marketable land even more.
Toxic for Perry Homes
Let’s face it. When Perry Homes bought this property, Kathy Perry Britton swallowed a poison pill. Woodridge Village now has a toxic reputation that will infect the rest of Perry Homes. No one will ever be able to trust anything Perry Homes says again.
But what to do with this land? If you’re Kathy Perry Britton trying to spit shine the legacy of dear old dad, you can’t keep it. And you can’t sell it. You can’t even give it away. No land conservancy organization would take it until the damage done to wetlands and streams was remediated. That could take decades.
The Real Value of Wetlands
However, there are two pieces of good news in this mess.
If Perry Homes implodes, it won’t take a lot of investors with it; the company is private.
Perry Homes may serve as a lesson to other developers and teach them that the real value of wetlands is their downstream legal costs.
Time To Be Decisive
Just remember, Ms. Britton. Historically, 85% of Houston floods are non-tropical. So if you think you have eight more months to figure this out, think again.
Posted by Bob Rehak on 11/15/2019
808 Days after Hurricane Harvey and 57 after Imelda
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2019/11/RJR_4344.jpg?fit=1500%2C1000&ssl=110001500adminadmin2019-11-15 17:45:182019-11-16 09:51:58Perry Homes’ Woodridge Village Investment Could Be Costliest Ever
The last dredge from the Army Corps’ Emergency West Fork Emergency Dredging Program has left the river. State Representative Dan Huberty says plans for Phase 2 of dredging will be announced next week.
Great Lakes Dismantles Dredge
The last remaining dredge, operated by Great Lakes Dredge and Dock, finished dredging a 500,000 cubic yard contract extension in the area of the West Fork mouth bar around Labor Day. That brought the total amount of sand and sediment removed from the West Fork to about 2.3 million cubic yards.
The Great Lakes Dredge waited near the mouth bar for six more weeks, as the owners hoped for yet another contract extension that didn’t come. Finally, in mid-October, Great Lakes started removing its dredge, booster pumps, pipe and other support equipment. That was about the time the City applied for another FEMA grant to help with more dredging.
Now You See It
On November 4th, the dock at the Army Corps Command Post opposite Forest Cove was bustling with activity, as workers dismantled the Great Lakes Dredge.Note all the pipe in the background. Each 40 food section weighs 4,000 pounds.
Now You Don’t
Photo taken on Tuesday, 11/12/19. Dredge is gone.
With Great Lakes and Callan Marine gone, any additional dredging efforts will start from scratch. And we need a Phase 2.
Long-Shot Option: On October 15 or thereabouts, City of Houston Flood Czar Stephen Costello submitted another grant request to FEMA for additional money to dredge the mouth bar. That request is still pending. But it isn’t our only hope.
Sure-Thing Option: Luckily, thanks to State Representative Dan Huberty’s Amendment to SB-500, earlier this year, the State Legislature earmarked $30 million for dredging Lake Houston. Let’s call that Phase 2.
The crucial text of the Huberty Amendment reads, “… $30 million is dedicated to the Texas Water Development Board to provide a grant to Harris County for the purchase and operation of equipment to remove accumulated siltation and sediment deposits located at the confluence of the San Jacinto River and Lake Houston.”
According to Huberty, the County, City and State have been examining alternative plans and evaluating their cost-effectiveness. Huberty expects to hold a press conference next week to announce next steps. Stay tuned.
Please note that the two options are not mutually exclusive. The FEMA Grant could still come though and be used to extend Phase 2 dredging.
Posted by Bob Rehak on 11/15/2019
808 Days after Hurricane Harvey
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2019/11/IMG_0419-copy.jpg?fit=1500%2C1097&ssl=110971500adminadmin2019-11-14 20:15:052019-11-14 20:27:24Last Phase-1 Dredge Gone; Phase 2 Will Be Announced Next Week
When I first read the denial, its brevity shocked me – one sentence. It basically says to the attorney general “prove your case.”
I quote: “…Triple PG generally denies each and every allegation contained in Plaintiff’s Original Petition, and all amendments and supplements thereto, and demands strict proof thereof by a preponderance of the evidence.”
I called a lawyer to ask whether such brief denials were common. The answer: yes. My next question: Why?
Why the Brief Denial?
Basically, had the defendant made no reply to the claims within 20 days, it could have had a default judgement entered against it. So this blocks a default judgment. This also stops the clock, forces the Attorney General to reveal more of its case, and gives the defendant more time to develop an affirmative defense … if it has one. Triple PG can always amend its reply later.
AG Already Laid Out Evidence
The TCEQ has performed onsite inspections and overflights. The TCEQ report was made public with the AG filing. But the TCEQ isn’t the only entity investigating. So by delaying a settlement, the mine could be opening itself to additional fines. And the discovery of additional evidence.
The longer they wait to settle this case, the higher per-day fines could go.
Hearing Delayed Again
The hearing scheduled for November 12 on a permanent injunction against the mine has now been rescheduled for November 25th.
Deny This
When I flew over the mine on November 4, 46 days after Imelda, Triple PG was only starting to fix the second of eight breaches. The TCEQ did not even find all of those breaches because many roads within the mine had washed out when they paid their surprise visit. So delays could add to Triple PG’s woes as they also run up legal fees.
Here’s what breach #2 looked like on 11/4/2019.
Breach between Triple PG sand mine pit (upper left) and White Oak Creek lower right, photographed on 11/4/2019.Same breach photographed from reverse angle over pit. Note the white scum floating out of the mine.Third angle shows more scum and trees blown inward toward the mine during the breach.
The Defendant’s response also included a one sentence prayer. They prayed that all charges would be dismissed and that they would be entitled to further relief, which they did not specify. The only other thing the AG sought was a permanent injunction barring the mine from discharging wastewater. But they might seek to recover court costs if found no guilty.
Posted by Bob Rehak on 11/14/2019
807 Days after Hurricane Harvey and 56 after Imelda
The thoughts expressed in this post represent my opinions on matters of public policy and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2019/11/RJR_4561.jpg?fit=1500%2C1000&ssl=110001500adminadmin2019-11-13 21:38:222019-11-13 21:38:33Triple PG Sand Mine Denies Attorney General Claims
Perry Homes’ Woodridge Village Investment Could Be Costliest Ever
Usually when you make an investment, the worst thing that could happen is that you lose all your principle. But Perry Homes could loose a hundred times more than they paid for Woodridge Village land. That takes special talent.
Out-of-Pocket Costs
The land that Woodridge Village sits on didn’t cost much; much of it was wetlands and many streams converged there. Regardless, a Perry Homes subsidiary, Figure Four Partners, bought the land. Montgomery County Appraisal District values the two main parcels at less than a million dollars. Together they comprise more than 80% of the 268-acre project. (See screen captures below from Montgomery County Appraisal District website.)
Real Costs Could Be 100X Greater
Now let’s look at the real costs to Perry. Just to screw up the land, they paid for:
Let’s say that cost another five million.
But all of that contributed to the flooding of approximately 200 homes in May and 350 in September. Let’s assume the damage to each home totaled $100,000. That comes to about $55,000,000.
Furniture, appliances, rugs, window coverings and other contents? Let’s assume an average of $40,000. That would total another $22,000,000.
Let’s also assume that 300 cars flooded. Average cost – $30,000. Bingo. $9 million.
Now let’s estimate the reduced marketability of homes that flooded. To do this, let’s assume an average price of $200,000 per home and a 20% reduction. That would cost homeowners $40,000 each in the market value of their homes. That’s another $22,000,000.
And we haven’t even factored in the legal fees of J. Carey Gray, counselor extraordinaire.
Corps Now Investigating Wetland Violations
Perry Homes bought wetlands and must have thought that no one would notice when they filled them in. They didn’t even bother to request a jurisdictional determination from the Corps for the wetlands. That reduced costs even more. It’s a proven formula in business; minimize costs to maximize profits.
But perhaps Perry Homes went too far. People did notice. The wetlands that they conveniently ignored fall under the jurisdiction of the Army Corps. And the Corps is now investigating potential violations of Section 404 of the Clean Water Act. That could get expensive all by itself.
Like Building Homes at the End of a Gunnery Range
It just keeps getting worse for Perry. This was kind of like buying land to build homes at the end of a gunnery range. A little risky.
But it’s too late to rethink that decision. No one will ever want to buy a home on this site. It’s less marketable than swampland near Chernobyl.
There’s another rule of thumb in business. When you find yourself in a hole, stop digging. And that’s exactly what Perry has done. They have stopped work on the site for months. Work on detention ponds that would help protect people downstream from future flooding is going undone.
Career-Limiting Moves
Whoever made the decision to develop Woodridge Village definitely made a CLM (career-limiting move). At this point, even Perry Homes employees not associated with the decision must worry about their Christmas turkeys. Few careers or companies survive blunders that become case studies for how not to do something.
Eroding Profit Margins
Because of faulty assumptions and corner cutting, Perry Homes put itself between a rock and a hard place. They’ve managed to turn a million dollar investment into a potential $100 million liability. They can’t develop this property profitably now. And they can’t sell it. Who would want to buy this land and inherit the liability every time a storm cloud floats by?
To protect downstream homes from flooding, they would have to expand the detention ponds by at least 40%. And that would eliminate so many homesites that costs could exceed income. I say “at least” because the issue is not just Atlas-14 compliance. While digging the S2 detention pond, contractors hit water that’s not going away.
That means they can’t achieve their detention goals by going deeper; they’ll have to go wider. And that will cut into marketable land even more.
Toxic for Perry Homes
Let’s face it. When Perry Homes bought this property, Kathy Perry Britton swallowed a poison pill. Woodridge Village now has a toxic reputation that will infect the rest of Perry Homes. No one will ever be able to trust anything Perry Homes says again.
But what to do with this land? If you’re Kathy Perry Britton trying to spit shine the legacy of dear old dad, you can’t keep it. And you can’t sell it. You can’t even give it away. No land conservancy organization would take it until the damage done to wetlands and streams was remediated. That could take decades.
The Real Value of Wetlands
However, there are two pieces of good news in this mess.
Time To Be Decisive
Just remember, Ms. Britton. Historically, 85% of Houston floods are non-tropical. So if you think you have eight more months to figure this out, think again.
Posted by Bob Rehak on 11/15/2019
808 Days after Hurricane Harvey and 57 after Imelda
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.
Last Phase-1 Dredge Gone; Phase 2 Will Be Announced Next Week
The last dredge from the Army Corps’ Emergency West Fork Emergency Dredging Program has left the river. State Representative Dan Huberty says plans for Phase 2 of dredging will be announced next week.
Great Lakes Dismantles Dredge
The last remaining dredge, operated by Great Lakes Dredge and Dock, finished dredging a 500,000 cubic yard contract extension in the area of the West Fork mouth bar around Labor Day. That brought the total amount of sand and sediment removed from the West Fork to about 2.3 million cubic yards.
The Great Lakes Dredge waited near the mouth bar for six more weeks, as the owners hoped for yet another contract extension that didn’t come. Finally, in mid-October, Great Lakes started removing its dredge, booster pumps, pipe and other support equipment. That was about the time the City applied for another FEMA grant to help with more dredging.
Now You See It
Now You Don’t
With Great Lakes and Callan Marine gone, any additional dredging efforts will start from scratch. And we need a Phase 2.
Millions of cubic yards remain in the West Fork Mouth Bar alone. And Imelda deposited immense of amounts of sediment in a growing East Fork Mouth Bar. And let’s not forget upstream dredging near US59 and the County’s planned Edgewater Park, which will have a public boat launch.
Phase 2 Options Moving Forward
Long-Shot Option: On October 15 or thereabouts, City of Houston Flood Czar Stephen Costello submitted another grant request to FEMA for additional money to dredge the mouth bar. That request is still pending. But it isn’t our only hope.
Sure-Thing Option: Luckily, thanks to State Representative Dan Huberty’s Amendment to SB-500, earlier this year, the State Legislature earmarked $30 million for dredging Lake Houston. Let’s call that Phase 2.
The crucial text of the Huberty Amendment reads, “… $30 million is dedicated to the Texas Water Development Board to provide a grant to Harris County for the purchase and operation of equipment to remove accumulated siltation and sediment deposits located at the confluence of the San Jacinto River and Lake Houston.”
According to Huberty, the County, City and State have been examining alternative plans and evaluating their cost-effectiveness. Huberty expects to hold a press conference next week to announce next steps. Stay tuned.
Please note that the two options are not mutually exclusive. The FEMA Grant could still come though and be used to extend Phase 2 dredging.
Posted by Bob Rehak on 11/15/2019
808 Days after Hurricane Harvey
Triple PG Sand Mine Denies Attorney General Claims
Surprise. Surprise. The Triple PG Sand Mine has denied all of the claims by the Texas Attorney General in the state’s lawsuit. The attorney general alleged that breaches in the mine’s dikes allowed wastewater to escape into tributaries of Lake Houston, the source of drinking water for two million people.
One Sentence Denial
When I first read the denial, its brevity shocked me – one sentence. It basically says to the attorney general “prove your case.”
I quote: “…Triple PG generally denies each and every allegation contained in Plaintiff’s Original Petition, and all amendments and supplements thereto, and demands strict proof thereof by a preponderance of the evidence.”
I called a lawyer to ask whether such brief denials were common. The answer: yes. My next question: Why?
Why the Brief Denial?
Basically, had the defendant made no reply to the claims within 20 days, it could have had a default judgement entered against it. So this blocks a default judgment. This also stops the clock, forces the Attorney General to reveal more of its case, and gives the defendant more time to develop an affirmative defense … if it has one. Triple PG can always amend its reply later.
AG Already Laid Out Evidence
The TCEQ has performed onsite inspections and overflights. The TCEQ report was made public with the AG filing. But the TCEQ isn’t the only entity investigating. So by delaying a settlement, the mine could be opening itself to additional fines. And the discovery of additional evidence.
The Mine Safety and Health Administration is also investigating the mine thanks to complaints from dozens of residents around the mine.
The AG could also amend its suit if new evidence becomes available.
In addition, numerous residents, including Tony Buzbee, candidate for the Mayor of Houston, have photographed the breaches in this mine’s dikes.
The longer they wait to settle this case, the higher per-day fines could go.
Hearing Delayed Again
The hearing scheduled for November 12 on a permanent injunction against the mine has now been rescheduled for November 25th.
Deny This
When I flew over the mine on November 4, 46 days after Imelda, Triple PG was only starting to fix the second of eight breaches. The TCEQ did not even find all of those breaches because many roads within the mine had washed out when they paid their surprise visit. So delays could add to Triple PG’s woes as they also run up legal fees.
Here’s what breach #2 looked like on 11/4/2019.
The Defendant’s response also included a one sentence prayer. They prayed that all charges would be dismissed and that they would be entitled to further relief, which they did not specify. The only other thing the AG sought was a permanent injunction barring the mine from discharging wastewater. But they might seek to recover court costs if found no guilty.
Posted by Bob Rehak on 11/14/2019
807 Days after Hurricane Harvey and 56 after Imelda
The thoughts expressed in this post represent my opinions on matters of public policy and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.