After Superior Court loss, Ogden developers challenge NHC Commissioners in NC Court of Appeals
New Hanover County is in a legal battle with the development team, Coswald and Tribute Companies. It’s over how a parcel of land in the northern part of the county is developed.
Each political season brings the question: What power does the county commission have when it comes to directing development? The answer is complicated, but at a recent agenda meeting on January 28th, 2021 Commissioner Jonathan Barfield addressed the new board members:
“The one thing I don’t want to see happen that the county gets sued. We’ve had several missteps in the past where we’ve got it wrong and developers had sued the county and won and built what they wanted to build.”
The Coswald/Tribute versus New Hanover County case started with the developers wanting to use a special use permit back in 2019 to build a mixed-use development on 15.6 acres of undeveloped land off Lendire Road and Market Street in Ogden. The developers were proposing close to 290 apartments, along with some commercial space for restaurants, offices, and retail.
Below is a summary of the county’s decisions on the project and the eventual lawsuit filed by Coswald and Tribute against them.
The Planning Board Unanimously Approves the SUP
The county’s SUP has to follow 4 guidelines. They basically say that the project will 1) not endanger public health or safety; 2) be in compliance with zoning ordinances; 3) not impede the value of surrounding properties; 4) be in harmony with the area and be in compliance with the Comprehensive Plan.
From presentations from the development team’s attorney Matt Nichols, and engineers and builders associated with the project attested that it met all four of the SUP’s guidelines.
But four community members present at the meeting were convinced that this development would further increase flooding in the area.
Two residents specifically raised questions as to where the development’s stormwater would flow -- would it be into Howe Creek or Smith Creek? They asked because residents of nearby neighborhoods were worried that the stormwater would flow into Smith Creek compounding some pre-existing flooding issues with the watershed leftover from Hurricanes Florence and Dorian.
The civil engineer for the project, Tim Clinkscales, said that the stormwater would flow to the Howe Creek Watershed and that they were also proposing to build a stormwater pond.
The attorney Matt Nichols representing Coswald and Tribute Companies said that they would also install a fence near the Jacobs Ridge neighborhood, design stormwater facilities for the 100-year storm event, and would put in place multi-use paths along Lendire Road, ones that would connect to the overall improvements the North Carolina Department of Transportation (DOT) is planning to make as part of the Military Cutoff Extension and Market Street Median projects, slated to finish in early 2023.
Another important component to Nichols’ argument was that Tribute Companies would build a much better project than what is allowed ‘by-right’ in the B-2 zoning district, which allows for a strip mall or a ‘big-box store,’ like Walmart. He and his team also argued that if one of these did go in that traffic counts and stormwater issues would be much worse compared to what they were offering to build.
By the end of the planning board public hearing, all six board members voted unanimously to approve the project.
Commissioners Unanimously Table the SUP
Close to two weeks after the planning board’s decision, the commissioners were set to hear the SUP. But this time, the opposition had grown significantly since the hearing at the planning board.
Both emails entered into the record and the speakers who were present at the commissioner meeting complained of the same issues brought forth during the planning board’s hearing.
The commissioners, along with members of the public, reiterated the complaints that the roads weren’t prepared for future traffic that would come with the new development and that there wasn’t sufficient stormwater infrastructure to handle flooding.
Commissioner Rob Zapple said during the meeting that these issues hadn’t been resolved and that he couldn’t bring himself to rubber-stamp the project:
“But to approve this on faith that all these flooding issues and the road issues before those [improvements] are in place, we should hit the breaks and pause.”
And while former County Commissioner Woody White did see some of the same issues with the project, he did agree with Tribute that they were potentially building something better than what’s already allowed on the site:
“Because what I’ve heard is that the rezone improves stormwater, lowers traffic. Now if nothing’s done and a big box store shows up there tomorrow or next week; it’s a risk that these adjacent communities run is not making it better, a by-right use that you can’t come down here and complain about because it will happen.”
By the end of the hearing, the commissioners unanimously decided to give the developer 90 days to gather information as to how specifically Lendire Road and stormwater infrastructure would be fixed.
Here was the response from Nichols, the development team’s attorney:
“I think the difficulty is that we would respectfully contend that we successfully meet the criteria. I’m not here to reargue the case, but there’s an uncertainty of whether we wait and the commission decides to deny it.”
Commissioners Unanimously Deny the SUP
Because of the pandemic, the second public hearing wasn’t until June 1st, 2020. And Nichols’ worry did come to fruition: The commissioners voted unanimously to deny the special use permit because they were not convinced that the project was safe for the community, mainly because the roads nor the stormwater infrastructure had improved over the past 8 months.
In particular, former Commissioner Pat Kusek was not convinced that Lendire Road would likely be fixed by 2023:
“The timeframe is what’s bothering me, and I hear what you’re saying that we have some assurance from DOT that this won’t slip, but that’s my heartache here. We still haven’t fixed anything up there.”
Commissioner Rob Zapple was still unsettled by the lack of stormwater infrastructure,
“I’m just troubled by the amount of time that it’s going to take. I know everyone is working as hard as they can to get there, and what the impact will be if we have a large rain event any time in the next two years.”
Commissioners Win in Superior Court
Former Commissioner White previewed the legal trouble that was to come with the eventual permit’s denial back at their first public hearing in October 2019:
“Either side that loses this can appeal the case to Superior Court. And you have one judge that sits and listens and reads everything that’s happened and if the evidence is sufficient to grant the special use and this board doesn’t do it, the judge just orders us to do it. It might appear that we have the option to follow public opinion that we shouldn’t do this, but we have an obligation to follow the law because the judge has that obligation too.”
On September 17th, 2020, the Superior Court Judge George F. Jones did indeed rule in the county’s favor, saying that they could deny the permit because the developers didn't follow the stipulations in the SUP. One of the court’s main conclusions,
“Flooding of streets and homes occasioned by stormwater run off reasonably relates to public health and/or public safety and materially endangers both public health and public safety.”
The court also said that even with existing stormwater infrastructure in the northern part of the county, Hurricanes Florence and Dorian still flooded the area, supporting the county’s concern that adding more development, without the proper infrastructure in place, could further exacerbate these issues.
While the development team has said that the stormwater infrastructure that they will eventually place will be built to withstand a 100-year storm, the court found,
“Natural events, particularly storms, referred to as probability of frequency in terms of years (ie 100 year-storm) have occurred in New Hanover County with increasing frequency.”
In essence arguing that even with this new standard, the infrastructure could be compromised. But an odd contradiction is that the county ordinance only stipulates this infrastructure be built to handle a 25-year storm event.
The development team’s lawyers, Shipman & Wright, LLP, also argued in court that the county was judging the development based on their new Unified Development Ordinance (UDO) and not going off the prior rules when they submitted their application. But the court ruled,
“The UDO and the original zoning ordinance were identical - the latter having been incorporated into the former.”
The Developers Appeal the Superior Court Ruling
Coswald and Tribute Companies filed an appeal after the Superior Court ruling, in which they contend that they will make improvements to Lendire Road and to the stormwater infrastructure.
In the appeal filing, they also state,
“To be entitled to the issuance of a SUP, Tribute did not have to show that all drainage or traffic improvements were completed as of June 1, 2020.”
Basically, calling into question the validity of the commissioners denying the SUP only on one of the criteria. They decided that the project endangered public health or safety because,
“Drainage improvements have not been completed and traffic improvements planned for the area have not been completed.”
Coswald and Tribute deny that any of the project endangers public safety and that they submitted all the necessary documentation to support that claim.
The case is now waiting to be heard in the North Carolina Court of Appeals. In cases where the Appellate decision is not unanimous, parties can appeal to the North Carolina Supreme Court; unanimous Appellate decisions are only reviewed at the Supreme Court's discretion.
[Editor's note: New Hanover County declined to comment on the issue, as is standard practice for any pending litigation.]
Minutes from the Planning Board meeting - October 2019
Minutes from the Commissioner meeting - October 2019
Minutes from the Commissioner meeting - June 2020
Superior Court Judgment - September 2020, pp 1-26
Appeal Court Filing - pp 33-54