6/21/19: WHAT DOES THE TOWN CODE MEAN? CARVING UP OUR LOW-DENSITY TOWN BY DISREGARDING THE LAW: THE BEACON QUESTIONS THE PLANNING BOARD’S EXCEPTIONS TO NEW NONCONFORMING LOTS ORDINANCE

The question of giving certain property owners exceptions to the new nonconforming lots ordinance is a complex one that deserves much more thought and time than the Planning Board gave it Monday night, which was the first opportunity for the public to comment on the newly drafted zoning text amendment that defines those exceptions.

You will find the text of ZTA 18-09PB01, the proposed exceptions amendment, here:

https://www.southernshores-nc.gov/wp-content/uploads/2019/06/ZTA-18-09-PB01-Nonconforming-Lots.pdf. (See yesterday’s blog post for background.)

The new nonconforming lots ordinance, which ZTA 18-09PB01 proposes to amend, replaced the former nonconforming lots ordinance on Sept. 5, 2018.

The former ordinance was codified at Town Code sec. 36-132, as the new one is, and is still available through the version of the Town Code that is on the Town website. The former sec. 36-132 had been on the books for at least 30 years,

During the past year, The Beacon has repeatedly pointed out to the Planning Board that the Town has had a nonconforming lots ordinance on the books for decades that it has not enforced. Matt Neal, president of the Outer Banks Home Builders Assn., and Mike Stone of Southern Shores Realty Co. publicly have stated the same proposition.

It is The Beacon’s contention that the Town’s failure to enforce the former sec. 36-132 has led to the mischief of allowing some nonconforming lots to exist that never should have been created to begin with.

The Former Ordinance and the Town Council’s Intent

As previously explained, lots that are not 100 feet wide or 20,000 square feet in area are “nonconforming” because they do not meet the minimum lot width and area standards established by in the Town Code for most of the residential districts. (See The Beacon, 6/20/19.)

A key provision in the former nonconforming lots ordinance was the following, which I hope, when I read it Monday night to Planning Board members, they were not hearing for the first time:

“If on or after July 7, 1981, two or more adjacent and vacant nonconforming lots are in single ownership at any time, and such lots individually have less frontage, area or width than the minimum requirements of the district in which such lots are located, then such lots shall be considered and treated as a single lot or several lots that meet the minimum requirements of this chapter for the district in which such lots are located.”

The Beacon believes that both the intent and the plain meaning of this provision, which is subsection (a)(2)(a) of former section 36-132, were to require the treatment of two or more adjacent and vacant nonconforming lots in single ownership at any time after July 7, 1981, as a single lot. The two or more lots became one, in combination.

The Town Council that enacted this provision knew that the 100-foot-wide parcels developed in Southern Shores—especially on the oceanfront—were comprised of two 50-foot-wide lots, and it sought to prevent those smaller lots from being sold separately and developed.

That Town Council most likely also knew that restrictive covenants running with the deeds to the oceanfront properties and other parcels along Ocean Boulevard required a minimum building lot width of 75 or 100 feet.

Town Attorney Ben Gallop does not agree with this. He says the plain meaning of the ordinance quoted above is not what the Council intended.

Why not? Because, Mr. Gallop says, and he said it again Monday night, the Council did not use language about “combining” the lots, such as it used in the two sections of the ordinance that immediately follow this section.

The Beacon cannot begin to ascertain how often the Town has enforced these two sections, which address situations when a nonconforming lot is adjacent to other lots under the same ownership.

Monday Mr. Gallop cited a “principle” of statutory construction for his viewpoint about the ordinance’s language, but I can tell you that the overriding principle in any interpretation of any regulation or statute is to discern the intent of the legislating body.

The result of Mr. Gallop’s analysis is a nullification of the subsection I quoted above; ergo, it existed in the Town Code, but it meant nothing. That is a conclusion that the principles of statutory construction seek to avoid, and it does not make sense.

Undeserving Exceptions, Case by Case 

The reason this dispute between Mr. Gallop and The Beacon is relevant is because in the case of some of properties that get exceptions under ZTA 18-09PB01, there was—or may have been—a time after July 7, 1981, when they were part of a tract of two or more adjacent and vacant nonconforming lots that were in single ownership. It is also possible that one of the other sections of the former sec. 36-132 that required recombination applied. Consider:

The 50-foot-wide lot owned by Love-Gorman at 64 Ocean Blvd., formerly known as lot 3 in block 6:

This nonconforming lot is a hot potato.

And it is a clear case of the Town having dropped the ball.

This nonconforming lot was originally part of a 137 ½-foot-wide parcel that the Guptas, who are principals of SAGA Construction, Inc., bought through a 2013 court-ordered estate sale.

SAGA co-founder and partner Amit Gupta submitted the winning bid on Nov. 27, 2013. He later assigned his bid to 64 Ocean Blvd., LLC, a limited liability corporation managed by his brother and partner, Sumit Gupta.

Once owned by the Graves-Sackett family, this 137 ½-foot-wide oceanfront property consisted of two 50-foot-wide lots, known as lots 3 and 4 in block 6, and 37 ½ feet of lot 5 in block 6, which is to the north of lot 4. The family acquired the 37 ½ foot-wide tract long after Edward Spencer Graves of Lynchburg, Va. built an atypical two-story white flat-top house at 64 Ocean Blvd. for his mother.

According to Marinara McNaughton’s book, “Outer Banks Architecture,” Graves Cottage (see above) was designed by Harry Lawrence and built in 1948. It was part of what was known as the “Compound,” a collection of early beach homes in the vicinity, including founder Frank Stick’s flat top.

Writes Ms. McNaughton in her book: Mrs. Graves needed a second story because she had 17 grandchildren and entertained a “constant parade of houseguests.” (p. 87)

The deed conveying the Graves-Sackett property to 64 Ocean Blvd. LLC was executed March 20, 2014.

On April 30, 2014, according to the “Southern Shores Historic Flat Top Cottages” Facebook page and administrator Sally Gudas’s records, the Guptas’ 64 Ocean Blvd., LLC, demolished the Graves Cottage.

This date is critical.

This means that as of April 30, 2014, a single owner (64 Ocean Blvd., LLC) held title to three adjacent and vacant nonconforming lots at 64 Ocean Blvd., which, by operation of Town Code sec. 36-132, should have been considered and treated as a single lot.

This did not occur. Because it did not, what happened thereafter was a disgrace and, in The Beacon’s opinion, a betrayal of Southern Shores and its homeowners, especially those who are neighbors of what are now 64 and 64A Ocean Blvd.

On June 15, 2015, 64 Ocean Blvd., LLC, conveyed by gift the 50-foot-wide lot 3 to Nags Head Freehold, LLC, which was managed by the Gupta brothers’ father, Prem Gupta.

Not only did 64 Ocean Blvd., LLC, disregard the town’s nonconforming lots ordinance, it created two separate nonconforming land parcels: one 50-feet wide and the other 87 ½ feet wide, now known as 64A Ocean Blvd. (You may have noticed that there now is a sizeable house on the nonconforming 87 ½-foot-wide parcel, which has been under construction for years.)

On Jan. 22, 2016, Nags Head Freehold, LLC, executed a deed of sale to Steven Love and his wife, Kathleen Gorman, owners of 62 Ocean Blvd., for the 50-foot-wide lot known as lot 3. This deed was recorded Jan. 25, 2016.

Not coincidentally, on the afternoon of Jan. 22, 2016, the Southern Shores Town Council, by a 3-2 vote, thwarted SAGA’s bid to build a 16-bedroom wedding-event house on the entire 137 ½-foot-wide site by enacting the 6,000-square-foot house size limitation. (The Beacon previously erred in believing this 2016 meeting was in the evening. In fact, it convened at 3 p.m.)

Contrary to what Planning Board member David Neal said Monday night and others have said publicly at town meetings, Mr. Love did not buy the nonconforming 50-foot-wide lot 3 to “save” the town from SAGA’s development. The Town Council had already done that. According to witnesses, members of the Gupta family attended the Council’s meeting and, therefore, knew by the afternoon of Jan. 22, 2016 that their event-house project had been defeated. One reported Starkey Sharp, Mr. Love’s attorney, being present, but The Beacon could not confirm this with a second witness’s recollection.

The Beacon does not believe that Mr. Love and Ms. Gorman should profit from SAGA’s (64 Ocean Blvd. LLC’s) violation of the town ordinance, and they certainly would, if the Town Council approves the exception in ZTA 18-09PB01 that favors them.

They are not innocent bystanders in this transaction. Clearly, they had contact with SAGA principals before they bought their lot, and they had legal representation.

They also bought the lot with either implied or actual knowledge of the minimum dimensional requirements for buildable lots in Southern Shores and with either implied or actual knowledge of a restrictive covenant running with the lot that requires 75 feet of frontage. They should have known that they were buying a lot that did not meet Town Code standards.

The 50-foot lots at 76A, 76B, and 76C Ocean Blvd.:

These lots make up a curious situation that involves what I called at Monday’s Planning Board meeting “shenanigans.”

On June 21, 1971, Mary A. Price, C. Lee Campbell, and Ruth A. Dial, all of the same address in Falls Church, Va., jointly purchased a house built on three adjacent 50-foot-wide oceanfront lots from Kenneth and Jean Neland. These lots, nos. 3, 4, and 5 of block 7, comprised 76 Ocean Blvd. The original deed to 76 Ocean Blvd. dates back to 1947.

Subsequent to their purchase, Ms. Dial, Ms. Price, and Mr. Campbell—whom I speculate, but could not confirm, were a mother and her two children—changed their ownership so that they were not just tenants in common, they were joint tenants with right of survivorship (JTWROS). Attorney John G. Gaw Jr. handled this for them in a deed dated Aug. 11, 1981.

In a JTWROS, all of the tenants share equally in the property, and when one of them dies, his or her share passes by law to the surviving tenants.

Twenty years later, however, these three JTWROS divided up the three lots among themselves and sold them individually to Billy G. Roughton (lots 3 and 5, from Price and Dial, respectively) and his wife, Mildred Roughton (lot 4, from Campbell). This is not how a JTWROS generally resolves.

Where was the Town of Southern Shores when these conveyances occurred? Nowhere. Should the division of this prime 150-foot-wide oceanfront tract into three 50-footers have been allowed to occur under then-Town Code sec. 36-132?

The three lots comprising 76 Ocean Blvd. were not vacant on or after July 7, 1981, so that provision would not have applied.

But the former nonconforming lots ordinance, which was in effect in 2001, also provided that when a nonconforming lot was adjacent to one or more lots under the same ownership and any portion of a “proposed structure or required use” was located on two or more lots, the lots were to be combined into one single lot of record. (36-132(a)(3))

This provision of former sec. 36-132 had no ownership-date qualifications.

It is clear from the record of deeds for 76 Ocean Blvd. that whoever built the “proposed structure” (house) on the site, a portion of which was most likely located on two lots, also owned the adjacent nonconforming lot. (I could not discover when the house was demolished.)

Fourteen years later, when Billy Roughton, a very wealthy real estate investor and developer, died without a will, his widow arranged to give each of their three daughters one of the underlying 50-foot-wide lots. The same law firm that handled the dissolution of the Price-Dial-Campbell JTWROS, Vandeventer Black, assisted Mildred Roughton with inventorying and administering her husband’s estate.

Inasmuch as the Roughtons worked the deal with the JTWROS trio to split into three sections a parcel that should have been treated as a single lot, The Beacon does not regard them or their children as “innocent” bystanders.

 ZTA 18-09PB01 gives the Roughton sisters a special pass. It exempts a lot that is:

“one of three or less [sic] adjacent nonconforming lots under the ownership of related siblings on September 5, 2018.”

How is this even remotely fair to neighboring homeowners and to the community at large? How does it conform to the land-use plan?

Not only does this breakdown of a 150-foot-wide developed parcel into three 50-foot-wide lots appear to violate the former nonconforming lots ordinance, it overrules the restrictive covenant running with the land that requires all lots in the block to have 75 feet of frontage.

If this exemption is permitted, in time three large houses will likely occupy the now-pristine beach at 76 Ocean Blvd. in our “low-density” town. That should not happen.

2 Trout Run: This is a 50-foot-wide lot purchased by the current owners on July 27, 2017 from a family trust that also owned two adjacent, vacant 50-foot-wide lots.

The lot that fronts on Trout Run, which runs perpendicular to Ocean Boulevard, is known as lot 56 of block 31. The other two, identified as lots 1 and 2 of block 31, front on Ocean Boulevard. The two lots on Ocean Boulevard were sold to another party on Aug. 22, 2017 and remain vacant, as does 2 Trout Run.

If the former nonconforming lots ordinance that Mr. Gallop claims has no effect had been applied, these three lots would have been treated as a single lot and not been subject to division.    

Just as was true with Mr. Love and Ms. Gorman, the buyers of 2 Trout Run had either implied or actual knowledge of the minimum dimensional requirements of lots in Southern Shores and of any restrictive covenants running with the lot. Most likely, a covenant requires 75 feet of frontage, but The Beacon did not confirm this. In any case, the Trout Run buyers should have known they were purchasing a lot that did not meet Town Code standards.

Just last year a widow sold off a large vacant tract of land on Porpoise Run that she had purchased with her husband in 1972. He died in 1999. Two of the sales she made were of 50-foot-wide lots. Had Town Code sec. 36-132 been enforced, as The Beacon interprets its meaning, she could not have sectioned off her vacant tract of multiple adjacent nonconforming lots. She would have had to have treated it as a single lot.

The Beacon is greatly concerned about these nonconforming properties and others that have been created on the Town’s watch. We are seeking an independent legal opinion.

***

During the discussion that the Town Council had at its June 4 meeting about renewing its contract with Mr. Gallop’s law firm, Hornthal, Riley, Ellis and Maland, he said that “through the merger of multiple firms, essentially, our firm has been the Town Attorney since 1979,” when Southern Shores was incorporated—and, therefore, when it enacted all of its Town Code ordinances.

The firm has represented the Town “by name since 2001 or 2001,” Mr. Gallop said. According to his firm website profile, Mr. Gallop has been Town Attorney since 2008.

Where have all these lawyers been?

Ann G. Sjoerdsma, 6/21/19