Today, the U.S. Army Corps of Engineers released the findings of its investigation into the wetlands on Perry Homes’ Woodridge Village property. The Corps said that the wetlands do NOT fall under its jurisdiction. Therefore, there was no violation of Section 404 of the Clean Water Act when Perry wiped out wetlands without first seeking the Corps’ permission.

Congressman Dan Crenshaw’s office released this text of an email the Corps sent to them today.

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Text of Corps Email to Congressman Crenshaw

“This e-mail is in response to your request (on the behalf of Congressman Crenshaw) to be updated on our investigation into activities on the Figure Four properties located in Porter, Montgomery County, Texas.  (Investigation file SWG-2019-00745).” [Editor’s note: Figure Four is the development arm of Perry Homes.]

“As discussed on the phone earlier today, the Corps of Engineers has finalized our investigation into this matter and did NOT find a violation of Section 404 of the Clean Water Act (Section 404).”  

“We did confirm the presence of uplands and wetlands on the tract. Some of the wetlands had fill material placed into them. Based on the facts associated with this specific location and per federal regulation these wetlands were determined to “isolated.” They lacked any known nexus to interstate commerce. As such, they are not “waters of the United States” and are not subject to federal jurisdiction under Section 404. In accordance with federal regulation the jurisdictional status (determination) of these wetlands was coordinated with the Environmental Protection Agency prior to finalizing.”     

“The property owner has been notified of the federal government’s findings and the investigation closed.”

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Wetlands Question Now Moot from Legal Point of View

Normally, in cases where a question exists, developers consult the Corps before destroying the wetlands. When I asked the Corps last August whether Perry had sought a “jurisdictional determination,” the Corps answered that Perry had not.

Perry later claimed that it had hired a private consultant to determine whether the wetlands were jurisdictional. However, to my knowledge, Perry never publicly released the results of the survey. Today’s ruling by the Corps makes that whole controversy moot.

Regardless of the Corps’ rulings on the jurisdictional question, the fact remains that the Corps found wetlands on the property and they found Perry Homes had attempted to fill them in.

Wetlands Question Still Explosive from Business Point of View

Let’s see how well that worked out for Perry and its subsidiaries.

• More than 400 people are suing them.
• Damages could easily exceed $100 million.
• The parts of Perry’s property that were wetlands refuse to dry out.
• The land may be unsuitable for building.
• The land has become a toxic asset that will scare potential buyers.

If Perry Homes tries to build on the land after all the publicity surrounding this case, any homeowner whose foundation cracks would have a ready-made court case.

This land appears to be unsafe, unstable, unbuildable, unsaleable, and a menace to downstream homeowners in its current state.

Plaintiff’s Engineer Points to High Hurdles for Perry to Clear

David Givler, PE, a consultant for plaintiffs in the Elm Grove flooding case found that LJA Engineering, a Perry Homes’ contractor:

• Seriously underestimated the amount of runoff from this property.
• Used outdated rainfall statistics that led to underestimating the amount of detention capacity needed.
• Constructed the overflow spillway between Taylor Gulley and detention pond S2 at a height that would cause North Kingwood Forest to flood.

When You’re In a Hole, Stop Digging. Literally.

It may be possible to fix some of these problems. But at what cost? Will the development ultimately be economic when residential lots are used to increase the size of detention ponds?

Five developers previously bought this land, studied it, and sold it rather than develop it. Maybe Perry should do the same. Maybe they should transfer it to Harris County Flood Control to create a giant detention facility.

How Perry Could Exit Without a Loss, Mitigate Flooding, Limit Long-Term Liability

A Houston Chronicle article quotes Houston Mayor Pro Tem Dave Martin as saying that Perry quoted a price for the land that covered their acquisition cost PLUS the labor they have into it. That led Harris County to ask CoH to share the cost.

When CoH refused, Perry dropped the price to $14 million (the alleged purchase price) from $23 million, according to Community Impact newspaper. The Montgomery County Appraisal District values the land at only a little more than $1 million.

It will be very hard for Perry to sell the land and even harder to develop it. So why doesn’t Perry just donate the land to Harris County Flood Control to help them mitigate flooding?

According to a national real estate tax expert that I talked to, Perry could then write off the value of the land PLUS the value of the labor they have in it. For a billion dollar company, the tax deduction could easily EQUAL or come close to the price they are currently asking for the land.

It would also:

• Give Perry a chance to recoup some shred of its once proud image.
• Let Harris County Flood Control move forward quickly with a detention project that could truly mitigate flooding.
• Help protect Perry from additional future flooding claims.

Posted by Bob Rehak on 5/10/2020

924 Days since Hurricane Harvey and 173 since 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.