Consider the ongoing federal class action lawsuit involving Holly Plaza Apartments, a Town-owned property, in which the Town of Holly Ridge is named as a defendant. Public records show multiple lawsuits alleging mold contamination, water intrusion, and habitability concerns. The Town requested dismissal of the lawsuit based largely on “governmental immunity,” however, the judge rejected that argument. While some claims have been dismissed, major negligence and breach-of-contract claims against the Town remain active. Particularly concerning is that court records also reference an indemnity clause in the Town’s agreement with the Pendergraph entities that could require Holly Ridge to financially protect the management company against certain claims—essentially a potential “you cover us if we get sued” provision. Pendergraph has also filed a crossclaim against the Town, creating further disputes over who may ultimately pay legal costs, settlements, or judgments. The lawsuit alleges damages exceeding $5 million for purposes of federal jurisdiction, and town leadership has publicly discussed setting aside reserve funds to address potential litigation exposure, indicating they recognize the potential financial exposure.

No one knows how the case will end, but similar mold and habitability lawsuits nationwide have resulted in multi-million-dollar settlements. Public discussions also suggest substantial sums may already have been spent on evicted families' temporary lodging, settlements, legal fees, and related costs. At the same time, HR residents have raised concerns about future liabilities related to rapid growth, infrastructure expansion, and environmental issues, including PFAS (forever chemicals) investigations in portions of the proposed Project Ajax area. Whether those concerns ultimately become significant or not remains unknown. But that is the broader point: de-annexation is not only about taxes and services. It is also about limiting SH residents’ exposure to financial risks and liabilities that many feel are largely disconnected from SH itself.

While no outcome is certain, there is potential for multi-million-dollar litigation exposure, which could create real financial pressure for a town the size of Holly Ridge — particularly if insurance coverage does not fully apply. That naturally raises the question of whether taxpayers could ultimately shoulder part of the burden. It is a legitimate possibility that instead of “prospering together,” we “suffer together.” De-annexation would clarify the boundary between the services SH residents actually use, the taxes they pay, and the financial risks they are expected to absorb. Whether one supports or opposes de-annexation, these are reasonable issues for taxpayers to understand before deciding what kind of future they want to remain tied to. Our question is simple: if SH can keep core services, lower taxes, and reduce exposure to future town liabilities, then why remain financially tied to risks created elsewhere in Holly Ridge?