20052132 Ver 1_USACE Correspondence_20090730

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DEPARTMENT OF THE ARMY
WILMINGTON DISTRICT, CORPS OF ENGINEERS
69 DARLINGTON AVENUE
WILMINGTON, NORTH CAROLINA 28403-1343
REPLY TO
ATTENTION OF: July 29, 2009
Regulatory Division
Action ID No. SAW 200900425
Ms. Cyndi Karoly
Division of Water Quality
North Carolina Department of Environment
and Natural Resources
1650 Mail Service Center
Raleigh, North Carolina 27699-1650
Dear Ms. Karoly:
D ?s - a-1 3 2-
Q??c?oeR I
JUL 3 0 2009
DENR - WATER QUAUTV
WETLANDS AND STORIYIWATEIt BRANCH
By letter dated March 13, 2009, The Fund for Sandy Point, LLC, was notified of alleged
violations of permit conditions or limitations associated with the excavation of three navigation
channels and two boat basins within Department of the Army (DA) jurisdictional waters to
facilitate the development of single and multifamily housing, commercial businesses and
shopping centers, road crossings, marina amenities, waste water treatment facilities, and
municipal emergency departments, on property located at the Sandy Point Development, off NC
Highway 32, adjacent to the Albemarle Sound, near Edenton, in Chowan County, North
Carolina. Our District Engineer proposes to assess a Class I Administrative Penalty under the
authority of 33 U.S.C. § 1319(g) and 33 CFR Part 326.6. We are required to furnish you a copy
of the Proposed Order and the information contained in the enclosed Public Notice.
You may provide written comments on the Proposed Penalty Order at anytime within
30 calendar days after receipt of this notice. Your comments should be addressed to the District
Engineer, care of Mr. Justin McCorcle, Office of Counsel, Wilmington District, U.S. Army
Corps of Engineers, 69 Darlington Avenue, Wilmington, North Carolina 28403.
The violator may also provide written comments and/or request a hearing on the
Proposed Penalty Order at anytime within 30 calendar days after receipt of this notice. A request
for a hearing must be in writing, specifying in summary form the factual and legal issues that are
in dispute and the specific factual and legal grounds for the defense.
If the violator does not request a hearing, the District Engineer will withdraw, issue, or
modify and issue the enclosed Proposed Order as a Final Order. The decision will be based on
the administrative record, including any comments and/or evidence submitted by the violator and
members of the public. All evidence will be considered, and the decision will be based on a
preponderance of the evidence, that is, on the greater weight of evidence that is credible and
convincing to the mind.
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Please direct any questions regarding this matter to Mr. McCorcle at the address provided
above, or by telephone at [phone].
Sincerely,
S. Kenneth Jolly
Chief, Regulatory Division
Enclosures
,Permit: USACE Permit No. 200900425
PROPOSED ADMINISTRATIVE PENALTY ORDER
Under the authority granted by 33 U.S.C. § 1319(g) and 33 CFR Part 326.6, I,
Colonel Jefferson M. Ryscavage, District Engineer, Wilmington District, propose to issue this order
assessing a Class I Administrative Penalty for violation of the above-referenced permit.
Name/Address of Permittee:
The Fund for Sandy Point, LLC
C/O Mr. Sam Young
1820 Sandy Point Road
Edenton, North Carolina 27932
Permitted Activity:
The excavation of three navigation channels and two boat basins within Department of the Army
(DA) jurisdictional waters to facilitate the development of single and multifamily housing,
commercial businesses and shopping centers, road crossings, marina amenities, waste water treatment
facilities, and municipal emergency departments, on property located at the Sandy Point
Development, off NC Highway 32, adjacent to the Albemarle Sound, near Edenton, in Chowan
County, North Carolina, consistent with the application and plans for USACE Permit No. 200900425.
Condition(s) or Limitation(s) of Permit Reportedly Violated:
The Fund for Sandy Point, LLC, failed to comply with special condition 28. of the subject permit,
which states that, "The Permittee (and any successors and assigns) shall cause to be recorded in the
Register of Deeds for Chowan County the "Restrictive Covenants for Shoreline Preservation," the
draft form of which is attached as Exhibit E, and the "Restrictive Covenants for Wetlands
Preservation," the draft form of which is attached as Exhibit F ("Restrictive Covenants") for the
purpose of preserving and protecting certain riparian areas and wetlands located on the project site in
perpetuity. The Restrictive Covenants shall be recorded at least thirty (30) days before the Permittee
commences dredging the first of the three proposed channels in Albemarle Sound as authorized by
this Permit; provided, however, that no lot within the project shall be sold or conveyed without any
restrictive covenants applicable to such lot having first been recorded. The Permittee shall enforce
the terms of the restrictions set forth in the Restrictive Covenants, and, prior to conveyance of the
property, shall take no action on the property described in the Restrictive Covenants inconsistent with
the terms thereof. Conveyance of any portion of the property prior to the recordation of the
aforementioned covenants will require written approval of the USAGE."
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Description of the Nature of the Violation(s):
The Fund for Sandy Point, LLC, commenced dredging activities without complying with the
permit condition. The Fund for Sandy Point, LLC, recorded the Restrictive Covenant only after being
notified that they were not in compliance with the issued permit.
I propose to assess a Class I Administrative Penalty against the permittee in this case for $ 5,000;
however, this proposal is subject to revision in the interest of justice after all evidence and comments
have been received and reviewed. The amount that may be assessed as a Class I Administrative
Penalty may not exceed $11,000 per individual violation or a maximum amount of $27,500.
Issued this y of July 2009.
(3• /?? (tr"b
efferson M. Ryscavage
Colonel, Corps of Engineers
District Engineer
. . DEPARTMENT OF THE ARMY
Wilmington District, Corps of Engineers
69 Darlington Avenue
Wilmington, North Carolina 28403
Action ID No. 200900425 July 29, 2009
PUBLIC NOTICE
INTERESTED PARTIES: The District Engineer, Wilmington District, proposes to
issue an order assessing a Class I Administrative Penalty against The Fund for Sandy Point,
LLC, for a violation of permits granted under Section 404 of the Clean Water Act and Section 10
of the Rivers and Harbors Act of 1899.
PERMITS INVOLVED AND ALLEGED VIOLATION: The Department of the
Army issued Permit No. 200900425 to The Fund for Sandy Point, LLC, on October 18, 2007.
This permit authorized the excavation of three navigation channels and two boat basins within
Department of the Army (DA) jurisdictional waters to facilitate the development of single and
multifamily housing, commercial businesses and shopping centers, road crossings, marina
amenities, waste water treatment facilities, and municipal emergency departments, on property
located at the Sandy Point Development, off NC Highway 32, adjacent to the Albemarle Sound,
near Edenton, in Chowan County, North Carolina
Permit No. 200900425 was violated as follows:
The Fund for Sandy Point, LLC, failed to comply with special condition 28. of the
subject permit, which states that, "The Permittee (and any successors and assigns) shall cause to
be recorded in the Register of Deeds for Chowan County the "Restrictive Covenants for
Shoreline Preservation," the draft form of which is attached as Exhibit E, and the "Restrictive
Covenants for Wetlands Preservation," the draft form of which is attached as Exhibit F
("Restrictive Covenants") for the purpose of preserving and protecting certain riparian areas and
wetlands located on the project site in perpetuity. The Restrictive Covenants shall be recorded
at least thirty (30) days before the Permittee commences dredging the first of the three proposed
channels in Albemarle Sound as authorized by this Permit; provided, however, that no lot within
the project shall be sold or conveyed without any restrictive covenants applicable to such lot
having first been recorded. The Permittee shall enforce the terms of the restrictions set forth in
the Restrictive Covenants, and, prior to conveyance of the property, shall take no action on the
property described in the Restrictive Covenants inconsistent with the terms thereof. Conveyance
of any portion of the property prior to the recordation of the aforementioned covenants will
require written approval of the USACE."
2
The Fund for Sandy Point, LLC, commenced dredging activities without complying with
this permit condition. The Fund for Sandy Point, LLC, recorded the Restrictive Covenant only
after being notified that they were not in compliance with the issued permit.
AUTHORITY FOR PROCEEDING: This Administrative Penalty proceeding is
initiated under the authority of 33 U.S.C. 1319(g) and 33 CFR Part 326.6. The procedure for
assessing civil penalties in cases such as this is set out in the statute and the regulation.
Following the discovery and investigation of a violation of a permit, notice is given to the
permittee, the appropriate state agency, and the public. The permittee, the state, or any member
of the public may file comments within 30 days. If requested by the permittee, a hearing will be
held before a Presiding Officer who will submit a report and recommend a decision to the
District Engineer. The District Engineer will issue a Final Order on the case to the permittee.
Public participation in the hearing is permitted if a hearing is held.
PENALTY PROPOSED: The amount of the penalty proposed in this case is $5,000.
This proposal is subject to revision in the interest of justice after all evidence and comments have
been received and reviewed. The amount of the penalty that the District Engineer is authorized
to assess as a Class I Penalty is $11,000 per violation and not more than $27,500 total. In a case
involving multiple violators, each violator is subject to a separate, not joint, penalty.
REQUEST FOR HEARING: The permittee has 30 days following receipt of this
formal notice of proposed penalty to request a hearing. Written request, by the permittee, for a
hearing should be directed to the District Engineer within this designated comment period and
must state the specific reasons for requesting a public hearing. The request should specify, in
summary form, the factual and legal issues in dispute and the specific grounds for defense. The
permittee has a right to present evidence at the hearing; however, he may not challenge the
permit condition or limitation, which is the subject matter of this order.
COMMENTS/ADMINISTRATIVE RECORD: During the 30 day comment period,
any person may submit written comments on the proposed Penalty Order. These comments
should be sent to the District Engineer by 4:30 p.m., August 28, 2009. Any submitted comments
will be included in the administrative record relating to the Proposed Order. All information
submitted by the permittee and persons commenting on the Proposed Order will be placed in the
administrative record, which will be available for inspection during regular business hours at the
U.S. Army Corps of Engineers, Wilmington District, 69 Darlington Avenue, Wilmington, North
Carolina. (The administrative record is subject to the provisions of law restricting the disclosure
of confidential information.) Comments should be directed to:
U.S. Army Corps of Engineers
ATTN: Justin McCorcle (CESAW-OC)
69 Darlington Avenue
Wilmington, North Carolina 28403
PUBLIC HEARING: The permittee and all persons who file comments will be given
notice of any hearing held on this case. The permittee and all commenters will have a reasonable
opportunity to be heard and to present evidence at such hearing, if a hearing is held.
FINAL DECISION: If the permittee does not request a hearing, the District Engineer
may issue the Final Order on this violation on or after 30 days following receipt of this formal
notice by the permittee.
POST DECISION HEARING/APPEAL: Any Final Order issued under these
procedures shall become effective 30 calendar days following its issuance unless (1) a petition to
set aside the order and to hold a hearing is filed by any person who commented on the Proposed
Order and the petition is granted, or (2) an appeal to the United States District Court is taken
under 33 U.S.C. 1319(g)(8).