6/20/22: OPINION/ANALYSIS OF THE MIXED-USE ZONING CHANGE: A DISCONNECT, A COUNCIL OF TWO, AND A MISSED OPPORTUNITY.

The area outlined in red above is an undeveloped 7.9-acre commercial property tract in Southern Shores, part of which fronts on N. Virginia Dare Trail. (Courtesy of Dare County gis)

The Town Council recently unanimously approved a new mixed residential-commercial use of town property zoned commercial. Allowing “mixed-use” developments in Southern Shores, said Planning Board Chairperson Andy Ward, who spoke at the Council’s public hearing June 7 about the zoning text amendment that effected the change, “is a big leap for the town.”

Certainly, the Planning Board, which spent hours during the past few months thinking and talking about what was in the best interests of the town, thought so. The Town Council did not say much more publicly about the mixed-use concept than that members support it.   

We said two weeks ago that we would explore this zoning change, which has the potential to land condos next door to, or on top of, retail shops, and the “issues and problems that arise” for us because of the decision-making process that led to it.

We have reviewed the videotape of the Town Council’s public hearing several times since June 7, as well as watched Planning Board meeting tapes, and thought more about what we heard and what we know and have concluded that:

  1. A disconnect exists between the Planning Board and the Town Council, which makes us wonder how well they cooperate with, respect, and complement each other.
  2. Mayor Elizabeth Morey and Mayor Pro Tem Matt Neal, who were busy “behind the scenes,” determined the critical content of the mixed-use amendment to the Town zoning ordinance, and the other three Council members, whose comments June 7 reflected a lack of familiarity with that ordinance and confusion about what they were doing, just went along.
  3. With both the Planning Board and the Town Council focused on maximum allowable lot coverage for the new conditional use, both missed an opportunity to consider requiring “affordable” housing—what Dare County calls “essential and workforce housing”—  with the mixed-use change in what is known as “inclusionary zoning.” At the very least, the Town Council should have publicly discussed the potential for mixed use in Southern Shores beyond what Ginguite LLC, the commercial property owner that sought the zoning change, wants to do.  

We would like to stress to the Council members who were not included in the Mayor’s discussions with Ginguite and others before they voted June 7 on whether to approve its mixed-use ZTA that they have the option of motioning to table consideration of a ZTA.

Council members can (and should) take the time they need to understand what they are voting upon before they cast their votes. They’re making law!

FACTUAL BACKDROP

To authorize mixed use, the Town Council adopted at its June meeting a patchwork version of a ZTA that originated in February with Ginguite, a SAGA investor group that owns a marshy 5.2-acre commercial property at 6195 N. Croatan Hwy. (See The Beacon, 5/26/22, for background. We regret that we were on hiatus and did not track versions of this ZTA in the Planning Board.)

Ginguite purchased its property, which is adjacent to the Southern Shores Landing on U.S. Hwy. 158, in June 2014 with the expectation of developing it commercially, not residentially, according to SAGA Realty & Construction Co. Partner and CEO Sumit Gupta, who has been Ginguite’s principal representative. It had the option to do either.

Town Code section 36-207, which regulates the town’s C general commercial district, permits single-family, two-family (duplexes), and multifamily dwellings to be built in this district, per the standards of the high-density RS-8 multifamily residential district (section 36-203).

Sec. 36-207 also permits commercial “group” developments, with offices, retail stores, service establishments, etc., to be built. Until the Council approved mixed use two weeks ago, however, 36-207 it did not allow residential housing to be built with a commercial development on the same site.

According to Mr. Gupta, he met with Planning Director Wes Haskett earlier this year about developing the Ginguite tract, and the “consensus” that emerged from meetings he had with Mr. Haskett and other “town officials,” whom he did not identify, “was that the idea of bringing multifamily [dwellings] into group development was a good idea.”

For Ginguite to be able to combine residential and commercial uses on its tract, which has more than an acre of marshland and water and fronts on Ginguite Creek, it clearly needed sec. 35-207 to be amended.

The first ZTA (ZTA 22-02) that Ginguite submitted was skimpy. It proposed to add “group development of commercial and residential buildings” as a conditional use in the commercial district and specified only two conditions—one concerning the minimum building size, the other about connections between buildings—that a property owner would have to meet before being granted a special use permit.  

The applicant assumed that pre-existing requirements imposed by sec. 36-207 on commercial property developments would carry over to the mixed use. The Planning Board, which was very concerned about the relative percentage of residential and commercial uses in a mixed-use development and about maximum allowable lot coverage, did not agree.

After a lengthy Q & A with Mr. Gupta, the Board voted to deny recommending ZTA 22-02, advising him that Ginguite could withdraw ZTA 22-02 and submit a new ZTA with some of the items they had discussed. Subsequently, Ginguite submitted the more detailed ZTA 22-06.

In the meanwhile, the Town Council enacted a maximum density requirement of eight dwellings per acre for residential development in the commercial district (ZTA 22-04). This is the same density requirement that applies to dwellings in the town’s RS-8 multifamily residential district. (Most of us live in the RS-1 single-family dwelling district.)  

The Planning Board voted at its May 16 meeting to deny recommending Ginguite’s ZTA 22-06 because of a disagreement over lot coverage, and, in a highly unusual move, passed along to the Town Council its own version of ZTA 22-06 with its recommended requirements. The Board’s recommendations were not in a separate ZTA, but the Town Council treated them essentially as if they were.  

It is unclear to us how often Mr. Gupta met with Town staff and “Town officials” privately during the past few months, but we do know that Mayor Morey, Mayor Pro Tem Matt Neal, and Town Manager Cliff Ogburn met with Mr. Gupta on the morning of the Council’s June 7 public hearing on ZTA 22-06 because the Mayor told us so.

After the Council approved the mixed-use zoning change in a manner most favorable to Ginguite, the Mayor said that this ZTA effort consumed “a lot of thoughtful discussions” and “required some work,” and she thanked the staff, the Planning Board, and Town Council members for their contributions. She did not mention the Town Attorney.

We believe that in seeking to accommodate Ginguite, the Mayor took her eye off of the potential for mixed-use developments in the Town as a whole. We also believe that on June 7, she presented a “done deal” that discouraged Town Council members not privy to these “thoughtful discussions” from exercising an independent judgment.

ZTA 22-06: SITE SPECIFICITY . . .

To our knowledge, no Town representative brought up the possibility of enacting inclusionary zoning with the zoning change, presumably because Ginguite did not seek it.

But ZTA 22-06 is not site-specific. It applies to the Town at large. We see no reason why the Planning Board could not have recommended against Ginguite’s ZTA 22-02 and prepared its own ZTA on mixed-use development, giving more than just lip service to affordable housing.  

Mr. Gupta has pointedly said in public that any residential dwellings on Ginguite’s property will not be “workforce” housing; they will be “luxury” housing. Is this good planning policy for the Town’s future?

Inclusionary zoning is a term that refers to a host of different policies designed to set aside affordable housing in new developments (sometimes a percentage of “below-market” units). It is one of the tools by which municipalities nationwide are addressing the shortage of workforce housing. We wish the decision-makers in Southern Shores had considered it.

The point about site-specificity caused two Town Councilmen some difficulty during the Council’s deliberations on ZTA 22-06. One repeatedly asked if the ZTA applies to all commercial properties, or only to the Ginguite’s. Another asked whether what the Council was thinking about approving would allow the applicant “to do what he wants to do,” to get what he’s “asking for.”

It is discouraging to hear such confusion and wrongheadedness from Town government officials in deliberating an important town-wide zoning change.

Mr. Gupta told the Council that although a site plan for Ginguite’s property has not been prepared, a “design” has been circulated that envisions a “charming village” of luxury condominiums—with a walkway along Ginguite Creek, where boats could be launched—with small commercial buildings.  

We question the appropriateness of circulating that design. It should have had no bearing on the Town Council’s deliberations.

Inasmuch as that design was viewed by Town employees and representatives, in their public capacity, however, we believe it should have been included in the hearing materials provided.

Mr. Gupta assured the Council that Ginguite’s “intention” is not to enhance the value of the property with the mixed-use development potential and then sell it. Ginguite’s intention is not relevant to the Council’s deliberations, either.

We have learned on Dare County gis that the Ginguite property was zoned residential when Boddie-Noell Enterprises, Inc., which includes the Kitty Hawk Land Co., sold it for $1 million in 2003 to the Northern Outer Banks Associates LLC. We do not know whether it was zoned then for RS-8 multifamily dwellings or for RS-1 single-family dwellings.

According to online data, the Northern Outer Banks Associates LLC incorporated in 2003 and dissolved in 2016. Its principal address and agent were in New Bern.

Ginguite LLC bought the property in 2014 from the Wells Fargo Bank—in default?—for $535,000. By then, the 5.2-acre tract had been zoned commercial. Unfortunately, we do not have time to research how that happened, but it does seem like Ginguite LLC got a bonanza.

. . . AND MAXIMUM LOT COVERAGE

The maximum allowable lot coverage of the new mixed-use group development conditional use in the commercial district was the major sticking point between Ginguite and the Planning Board and the Planning Board and the Town Council.

The requirements for the mixed-residential and commercial conditional use now appear in the Town Code as Section 36-207(c)(11), which sets forth the minimum building size, setbacks, lot coverage, and other conditions that must be met for a property owner to obtain a mixed-use special permit. The majority of these conditions are standards already in the Code sections for the commercial district and the RS-8 multifamily residential district.

The Council adopted some of the recommendations made by the Planning Board, but only one of them is not already in the Code. It rejected the Board’s recommendation about buildable lot coverage, which the five-member volunteer Board spent months “deliberately” considering, according to Mr. Ward.  

The maximum lot coverage permitted currently in the Town’s RS-8 multifamily residential district is 40 percent of the net parcel area; the maximum lot coverage in the commercial district is 60 percent of the total parcel area, although that can be increased to 67 percent if the developer uses a sufficient amount of permeable pavement.

The Planning Board arrived at what Mr. Ward called “a pretty good average of 50 percent” lot coverage for the mixed-use conditional use by “blending” the maximums allowed in the RS-8 district and the commercial district.

Mayor Morey and Mayor Pro Tem Neal disagreed with the Board’s 50 percent, which the Board also decided could be extended to 55 percent with permeable pavers. They endorsed the 60 to 67 percent maximum lot coverage permissible in the commercial district.

The Planning Board also wanted to calculate all mixed-use lot coverage according to the “net” parcel area, the standard used in the RS-8 residential district. Net area is obtained after deducting acreage deemed unbuildable by “waterways, marshes, or wetlands.”

Not surprisingly, Mr. Gupta opposed this limitation on Ginguite’s commercial property, viewing it as a penalty for including residential uses in any development it might propose. Ms. Morey and Mr. Neal agreed with Mr. Gupta. They thought that mixed-use lot coverage should be calculated on the basis of the “total” parcel area, and they prevailed.

Mayor Morey led off the Council’s discussion about ZTA 22-06—and, thereby, steered it—with the pronouncement: “This is a commercial development, and we’re pulling in dense residential into it.” She wasn’t blending anything.

She then framed, and, thereby, limited, the choices before the Town Council by saying either it should vote to 1) impose the 60 percent maximum lot coverage standard applied in the commercial district or 2) use total parcel area in calculating a maximum lot coverage below 60 percent.

So framed, the Town Council’s discussion on lot coverage did not veer from these choices. 

Mixed use, said Mr. Neal, is a “new concept,” but it is a conditional use in the commercial district, not a separate zoning district, so commercial district standards should generally apply.

“If you make the restrictions [on mixed use] so much that the use wouldn’t even necessarily be utilized,” said Mr. Neal, who is a builder, “there’s no point in doing it.” (Just what is the point in doing it?)

In a conciliatory nod to the Planning Board, the two Town Council leaders endorsed the Board’s recommendation that the residential footprint in a mixed-use group development be a minimum of 25 percent of the net parcel area. 

A COUNCIL OF TWO

We do not wish to discredit the other three Town Council members, but they were not actively involved in the discussion of ZTA 22-06 and at various times showed hesitancy and confusion.

We wish that Town Councilwoman Paula Sherlock, who said she was “torn” between Ms. Morey’s two choices, had trusted her instincts and pursued her reasoning. She questioned whether the Mayor’s and Mayor Pro Tem’s position vis-à-vis the Planning Board’s position on lot coverage was “really a compromise,” but she did not say anymore. We would have preferred a real discussion, one that gave some consideration to the Planning Board’s “thought process,” as Mr. Ward called it.

We also believe it would have been beneficial for the Council to have talked about the other commercial properties in town that now may be developed with a mixed use. 

They include the 18.1-acre Marketplace and a 7.9-acre vacant property, with the address of 5391 North Virginia Dare Trail, that is only partially visible from the road. This tract is owned by the Stone family, owners of Southern Shores Realty Co. (SSR), Southern Shores Crossing, and other commercial properties. SSR owns a number of vacant residential lots in Chicahauk (Wild Pony Lane, Spindrift Trail) that are either adjacent to or in the vicinity of the 7.9-acre tract.  

We were always dismayed by the previous Town Council administration’s penchant for bringing “done deals” to Council meetings and not enlightening the public about the negotiation and discussion process that culminated in those deals.

“Done deals” short-circuit public discussion and discourage members of the public from participating in hearings. Why bother to comment if a decision has already been made?

If Mayor Morey is going to continue this practice—and Mayor Pro Tem Neal is going to assist her in doing so—the least they can do is fully disclose the meetings they held off-the-public-meeting record and the nature of their decision-making process. What factors did they consider? We believe the public has a right to know. So does the Planning Board, whose decisions have increasingly become superfluous.  

We also believe that all Town Council members have a duty to be prepared and informed enough on town issues—especially those concerning zoning—to exercise an independent judgment and to elucidate just what that judgment is.  That means doing homework, not just winging it. We would like to hear from all Town Council members that they know what they’re talking about.

Ann G. Sjoerdsma, 6/20/22

One thought on “6/20/22: OPINION/ANALYSIS OF THE MIXED-USE ZONING CHANGE: A DISCONNECT, A COUNCIL OF TWO, AND A MISSED OPPORTUNITY.

  1. Sorry, but anything SAGA does is a bunch of crap. They tear down flat tops to build mini hotels and just ruin things. Why don’t they stay in Nags Head where they have already mess up things?

    Like

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