Taco Bell has moved into the former Nu-Quality ice cream shop on U.S. Hwy. 158 in Southern Shores, in front of the Marketplace.

Taco Bell in Southern Shores is now hiring!

The Nu-Quality ice cream shop on U.S. Hwy. 158 in front of the Marketplace has closed—after less than two years in business—and Taco Bell is opening in its space. Its name went up on the building just today.

Deputy Town Manager/Planning Director Wes Haskett announced at last week’s Town Council meeting that the Town issued building and zoning permits to Taco Bell June 29 for its remodel of the Nu-Quality facility, which, he said, will undergo no structural changes.

The sale to Restaurant Property Investors IV, LLC, of Virginia Beach occurred on June 30, according to a special warranty deed on file with the Dare County Register of Deeds.

The franchisee is only installing new kitchen equipment and replacing existing signage, Mr. Haskett said. You may have noticed that the building was re-painted recently in Taco Bell’s signature purple.

Nu-Quality is of interest to us because the Town Planning Board and Town Council bent over backwards to accommodate owner Spiros Giannakopoulos’s application to develop a drive-through ice cream business on the small vacant lot at 5415 N. Croatan Hwy.

When Mr. Giannakopoulos proposed his development, it was illegal under the Town’s zoning code, which then required drive-through businesses to be located on commercial sites that are at least 2.5 acres in size.

The Nu-Quality/Taco Bell site, which sits between two banks—one of which is a First National—is only 18,260 square feet, or 0.42 acres.

According to county records, Mr. Giannakopoulos’s limited liability company, “5415 OBX-LLC,” purchased the site in late 2017 from First National Bank of Pennsylvania for $275,000 and granted the bank an easement.

Longtime Planning Board Chairman Sam Williams ensured, however, that inconvenient town law did not hinder Mr. Giannakopoulos, whose proposed 910-square-foot, flat-top-style drive-through ice cream shop was designed by architect Christopher Nason, then serving on the Town Council.

We recount the story. It ends with quite a payday for Mr. Giannakopoulos and any investors he may have.

The Williams Rescue

Operating as “5415 OBX-LLC,” Mr. Giannakopoulos applied to the Planning Board on March 14, 2018 for its approval of a conditional use site plan and zoning text amendment (“ZTA”) “package.” The ZTA, known as ZTA 18-05, proposed changing the Town’s commercial zoning to grant a special exemption to drive-through ice cream shops, and ONLY drive-through ice cream shops.

Prepared by Mr. Giannakopoulos’s representative, Quible & Associates of Kitty Hawk, ZTA 18-05 was not very ingenious, but it did not need to be. It simply stated that “drive-through facilities . . . other than Ice Cream Shops shall be located on a lot greater than or equal to 2.5 acres within the principal structure.” It then defined what an “Ice Cream Shop” is.

(We have a copy of the original ZTA, which you will not find on the Town website.)

Mr. Giannakopoulos, who is the proprietor of a Nu-Quality ice cream shop in Elizabeth City, appeared before the Town Planning Board on April 16, 2018.

The late Glenn Wyder, a Planning Board alternate who had just been appointed to the regular Board, immediately challenged the rather clumsy zoning exemption at this meeting, opposing its obvious preferential treatment. It was then that Chairman Williams stepped up to say that he had already worked out a solution.

The Beacon had just started publishing two weeks earlier, and we were not yet savvy about examining applications in the Town’s Planning Department before attending Planning Board hearings. Had we done so, we likely would have discovered Mr. Giannakopoulos’s connection to Councilman Nason, whose name did not come up in any public hearings about the Nu-Quality project until the last possible date.  

To get around the formidable zoning obstacle, Chairman Williams rewrote the key provision of ZTA 18-05, which is to say he rewrote the Town Code. He proposed changing the Town Code to distinguish between small and large drive-through facilities.

Under Mr. Williams’s plan, a “small” drive-through customer-service facility could be located on a lot less than 20,000 square feet provided it fronted on Hwy. 158 and met other building requirements, all based on Mr. Giannakopoulos’s ZTA and tailormade for his ice cream shop.

A small drive-through facility had to have a “principal structure” that served items over “a general service counter for the customer to carry to a small seating area, to a motor vehicle, or off-premises.” (Now Town Code sec. 36-57.)

Mr. Williams’s ZTA 18-05 also specified that one parking space had to exist for every three customer seats, and each employee had to have an additional space. (Town Code sec. 36-163(3)(c)(12).)

Further, the drive-through facility could not exceed 2,500 square feet or be closer than 100 feet to any residentially zoned property, and it must allow for stacking of a minimum of six cars. (Code sec. 36-207(c)(2))

A “large” drive-through facility, under Mr. Williams’s scheme, would conform to the requirement of a location size that is equal to or greater than 2.5 acres, the then-current requirement for all drive-through facilities.

A Meaningless ‘Public’ Hearing

Mr. Williams’s unilateral, behind-the-scenes rewrite struck us as questionable when we heard it for the first time on April 16, 2018, as well as unduly preferential. But even more disconcerting to us was the lack of a public hearing before the Planning Board about the revised ZTA.

The Town had given notice of a hearing about Mr. Giannakopolous’s ZTA 18-05, and provided its text, but it had not noticed Mr. Williams’s version, which significantly altered it.

After a discussion of his new zoning plan with his Planning Board colleagues, the Chairman moved toward taking a vote on recommending it to the Town Council for enactment.

As we reported more than two years ago, Planning Director Haskett intervened to remind Mr. Williams that he needed to entertain public comment before he could take a vote. The Chairman was prepared to skip over that legal necessity.

But how could any members of the public comment on a ZTA that they had not seen or even contemplated?

Regardless, the Planning Board voted on the Chairman’s ZTA, and it passed 4-1, with Elizabeth Morey, who now sits as Mayor Pro Tem on the Town Council, dissenting without comment.

When we later asked Town Attorney Ben Gallop about the propriety of voting on Mr. Williams’s substitute ZTA without first giving the public notice of it and an opportunity to be heard on its merits, Mr. Gallop did not see a problem. He described what happened as ZTA-editing by the Planning Board—which is perfectly permissible—before taking a vote.

We did not agree. Although it retained much of the language of Mr. Giannakopolous’s ZTA, the new ZTA replaced the former’s intent and meaning with a different concept altogether, and it had an effect on more than just Mr. Giannakopolous’s business.

Indeed, it has directly led to Taco Bell’s move into Southern Shores. We doubt Mr. Williams would have promoted a change in the zoning to welcome this national chain of franchised fast-food restaurants to town.

Much later, after the Town Council had acted, we arranged to meet with Mr. Haskett for an interview at Town Hall. Upon arriving, however, we discovered that Town Manager Peter Rascoe was going to sit in on the interview, uninvited.

Mr. Haskett was forthcoming about meetings with Mr. Williams, the applicant, Mr. Rascoe, and other interested parties after the filing of the proposed ZTA, all of which he said were standard procedure.

But when we pursued the impact that Mr. Nason’s involvement may have had on the Town’s treatment of the Nu-Quality package, or whether Mr. Nason himself had participated in discussions, Mr. Rascoe quickly inserted himself into the conversation to ask if we were accusing him of “collusion.”

We did not pursue this line of inquiry further. Even when he was not being defensive, Mr. Rascoe specialized in giving non-answers to straightforward questions that he did not want to answer. The Beacon was still getting its feet wet then, and we were not prepared to take on Town Hall.

John Finnelli, the Planning Board’s Martin’s Point representative, explained at the April 19 meeting that the Town enacted the 2.5-acre zoning restriction because it didn’t believe a drive-through business “was appropriate for every location,” and it was “trying to keep congestion off of Juniper Trail.”

At the same meeting, Mr. Williams explained that he and Mr. Haskett had spent time examining the physical space and needs of the drive-through fast-food businesses across from the Marketplace in Kitty Hawk. He was careful to explain that he did not want to open the door to “burger joints” in Southern Shores and seemed surprised when his Board colleagues pointed out that “junior” burger joints could operate on the site.

Taco Bell is a Mexican food joint, not a burger joint, but we believe it qualifies as the type of business that Mr. Williams said he was trying to avoid.

Even more important: Unlike the fast-food restaurants across the street, access to the drive-through line at the new Taco Bell or any business occupying 5415 N. Croatan Hwy is directly off of busy U.S. Hwy. 158. There is no side street diverting traffic. We perceived this then, and still do, as a problem.

Town Council Approval; Williams’s ‘Retirement’

On May 3, 2018, a first reading of Mr. Williams’s/now 5415 OBX-LLC’s ZTA 18-05 was held before the Town Council, with Mr. Nason inexplicably absent. No mention was made of his financial interest in the Nu-Quality project.

The measure failed by a 3-1 vote, because Town Councilman Fred Newberry dissented. To pass on first reading the vote on the measure needed to be unanimous.

In dissenting, Mr. Newberry said he was concerned about the “process” that resulted in the Planning Board’s new zoning proposal and about possible traffic congestion at 5415 N. Croatan Hwy. (See The Beacon, May 3, 2018)

At the second reading on June 7, 2018, Mr. Nason was actually present, but recused himself. This was the first time that any mention was made in a public forum about his involvement in the Nu-Quality development.

This time the Town Council unanimously approved the small-large distinction in drive-through businesses in Southern Shores, and Mr. Giannakopolous received the zoning green light he needed. (A simple majority was all that was needed for approval.)

Ironically, before the second reading of ZTA 18-05, Mr. Williams announced that he would not seek reappointment to the Planning Board.

Mr. Williams served for nine years as the Planning Board chairman—from July 1, 2009 to June 30, 2018—and it is safe to say that he exercised a tight grip.

The announcement that he was stepping aside caught us by surprise. The Beacon had argued that he should be reappointed to another three-year term when his then-current term expired, but we discouraged his selection as chairman for a 10th year.

The Planning Board, which also sits as the Board of Adjustment, elects a chairperson and vice-chairperson at the start of every new fiscal year. During the years in which it repeatedly returned Mr. Williams to the chairmanship, it got into what we consider an indefensible rut.

Mr. Williams said he wanted to spend more time with his family, especially his grandson, as we recall he told us.

Just like the hearing for the first reading, the public hearing for the second reading of ZTA 18-05 focused on the Nu-Quality business and the desirability of ice cream, not on the change in the Town Code.

In all of his public comments, Mr. Giannakopolous emphasized that he was desirous of becoming part of the Southern Shores community and preserving the town’s family atmosphere and architectural traditions. He expressed an interest in moving with his family to Southern Shores and becoming a longtime business fixture.

We do not recall hearing anything further from Mr. Giannakopolous after Nu-Quality opened for business. Neither he nor Nu-Quality ever seemed to have a presence in Southern Shores, although the ice cream shop had its fans. The increased traffic we feared never materialized.

Of course, The Beacon brought up in June 2018 the what-ifs of Nu-Quality’s closure and the ensuing commercial fallout. It was easy to foresee that a mini fast-food restaurant would one day be operating on the small site, but it was also safe to say that no one expected the changeover to happen so quickly.

In recent conversations with Southern Shores property owners, we have discovered that many people thought Nu-Quality did in fact receive a special zoning exemption, not that the Town Code was changed.

As you might surmise, The Beacon was not in favor of changing the Town zoning code to accommodate an individual business owner who knew, or should have known, that the commercial property he had purchased was too small to operate the drive-through facility he had in mind. We do not believe a decision made by five elected officials to restrict drive-through businesses to 2.5 acres should have been so easily set aside just to feather the cap of a businessperson who decides to come to town.

We also did not like the prospect of traffic tie-ups on Hwy. 158 in front of it, or sudden, un-signaled left or right turns of vehicles into it—a prospect whose likelihood increases with a Taco Bell.

That Mr. Nason had a financial stake in the outcome just made the deal a bit more fragrant for us.

When the mini-Taco Bell opens on the site—it has to be “mini” because of the “small drive-through facility” Code requirements—Southern Shores will have its first chain fast-food restaurant, drive-through or otherwise, because the Town’s planning watchdogs wanted to support a Mom ’n’ Pop ice cream shop.

Go figure.

For the Record: $1.2 Million 

According to Dare County records, Restaurant Property Investors IV, LLC, of Virginia Beach, purchased the property from 5415 OBX, LLC for $1.2 million, an outlandish sum.

Mr. Giannakopolous could never sell that much ice cream, but thanks to Sam Williams’s zoning change, he did not have to. He pocketed a nice profit. We wonder who else did.

The latest assessed value of 5415 N. Croatan Hwy. for tax purposes, according to the Dare County GIS, is $710,900.

The sale did not occur through the multi-listing service, according to a local realtor we consulted.

W. Brock Mitchell, an Elizabeth City-based partner in the Outer Banks firm of Hornthal, Riley, Ellis, & Maland, which also employs Town Attorney Ben Gallop, prepared the deed.

But, according to the face of the deed available through the Dare County GIS, the Kill Devil Hills firm of Gray & Lloyd, LLP, electronically transmitted it to the Dare County Register of Deeds. Attorney E. Crouse Gray Jr. is well-known for representing SAGA.

All we can tell you about purchaser Restaurant Property Investors IV, LLC, is that its registered agent is Alan M. Frieden, a Virginia Beach tax attorney who has been in practice nearly 50 years. Mr. Frieden is RA for a number of limited liability companies, all of which use the same mailing address.

Ann G. Sjoerdsma, 7/15/20


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