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CAPE FEAR MEMORIAL BRIDGE: Updates, resources, and context

Pender County judge’s short term rental loophole is big enough to drive a dirt bike through

The current airbnb listing for Copperhead ranch.
Airbnb
The current airbnb listing for Copperhead ranch.

Last year, the City of Wilmington paid half a million dollars back to owners of short-term rentals after a court ruled against their attempts to regulate AirBNBs, VRBOs, and other STRs. The case had a chilling effect on attempts to regulate rentals — but few imagined just how far that would allow one STR to go in a previously peaceful corner of Pender County.

Imagine living next to a motocross track, with bikes riding, engines whining nearly every day — for over a year. That’s been the everyday experience of neighbors living along Carl Meeks Road in Rocky Point, Pender County. The name of their street is now synonymous with the constant noise of the speeding machinery uprooting their life.

Residents like Scott Walker aren’t happy.

“I like motocross. I like dirt bikes. I think they're great. Do I want them riding next to my horses? Do you want them next to your house? Probably not,” Walker said.

Scott’s wife Julia added, “anyone on a horse with this track nearby is at risk for safety concerns. But keep in mind a farm was well in place before their track.”

Another neighbor, Bill Mcabee spoke to concerns about the riders frequently trespassing.

“I go out and run them off all the time, five times a week probably. The signs, they ignore them. We put our own signs out, put out our own gates, fences, they just move them and things like that,” he said.

The neighbors acted. Gary Helm took the lead, repeatedly emailing the county about the nuisance. Pender County investigated and found the property owners violated the zoning code by allowing a commercial motocross company to run a camp out of the property.

Carl Meeks LLC was leasing the property to a company called Driven MX, which was advertising it as “Copperhead Ranch.” Driven MX ran a variety of racing and training programs using the track (earlier financial disclosures listed the property at 532 Carl Meeks Road as an “Event Space”).

A violation was issued to Carl Meeks LLC for allowing Driven MX to operate a commercial enterprise on the property.

An attorney for Carl Meeks said the LLC was “mortified” that Driven had violated the ordinance, and wasn't aware of their intention to charge additional fees when they agreed to lease the property.

Still, Carl Meeks LLC appealed to the county's Board of Adjustment (BoA), where in May a panel of five board members held a quasi-judicial hearing and found that the property was definitively in violation of local zoning ordinances. They determined it was a commercial property — characterized by charging a fee for its use — which was strictly prohibited under the current zoning ordinance.

As a consequence, the property owners were forbidden from operating their land as a commercial enterprise without a special use permit in the future, unless they wanted to pay fines.

Samuel Potter, the lawyer representing Carl Meeks LLC, said they were unaware wrongdoing had been committed but were eager to comply. Potter said one of the owners of the company, District Judge Chad Hogston, was anxious of any appearance of impropriety as an elected official, and was eager to make amends.

Pender advised them on how they could proceed, Potter said.

“[The county] made it clear at the time that if there were a motocross track that was on the property that was part of a short term residential program like Airbnb, or VRBO, or homestay, any of those types of things that they do not regulate short term rentals,” said Potter.

“They would view the motocross track as being ancillary, not primary, to the short term rentals. Beginning around that time, they transitioned to short term rentals where people could use the tracks,” he said.

Thus, Carl Meeks LLC found itself an unexpected loophole for the motocross track — operating as a short term rental (STR).

A significant loophole

Here’s what happened: the county doesn’t count operating an AirBNB as a commercial property, so Carl Meeks LLC continued to run as an STR. Since Carl Meeks LLC was prohibited from charging fees outside of the rent tenants pay to stay at the AirBnB, the motocross track was treated as an “amenity,” with no additional fee for use — just like a swimming pool or hot tub might be for the AirBnb.

Even though the county ruled that Carl Meeks LLC would be fined if it continued allowing commercial businesses to run out of the property — the LLC’s initial rule-breaking had no real consequence.

This designation has struck a nerve with neighbors who clearly view the AirBNB as a commercial enterprise.

Almost a year after the first violation was issued to the track owners, nothing has materially changed for the neighbors. Day in and day out, loud motorbikes rip past their property, sometimes trespassing on their land.

The activity — and noise — continues.

It’s worth noting that according to the AirBNB listing, the property has a three-bedroom home that can sleep nine people — but in the weeks following the hearing neighbors reported upwards of 20 riders out on the track. Large groups arrive with RVs and motorhomes, staying on the property, and not just in the small rental home that’s listed as the AirBNB. The motocross track itself is advertised on the AirBNB listing.

The county is currently treating the track as untouchable beyond the limitations around commercial use. The neighbors want to see this track shut down, but because of Pender’s inability or unwillingness to regulate STRs — and its lax noise ordinance which allows activity well into the evening — there is little remedy that neighbors can pursue at the administrative level, leaving civil action as their only recourse.

The Property

In an interview with WHQR, Potter suggested it was never the owner’s intention to creatively exploit STR control regulations as a side hustle.

The intention, he said, for 532 Carl Meeks Road was for local families who enjoyed motocross, including Hogston's, to collectively invest in a property where they could safely do so. They’d run the property as a club, with a monthly fee for local residents to use the land. It would help cover the often significant insurance costs, creating an accessible area for riders from Wilmington.

“The original thought here was for a couple of people whose kids ride motocross to buy property, and to share in the cost and the expense of that. And so it's the whole it's sort of a central tenant to the whole thing [...] to just not lose money and have a place like this to go,” Potter explained.

Potter said Hogston was skeptical of joining from the start because of his role.

“He is as careful as somebody can be. He did not initially get involved and didn't want anybody to know that he was involved. Because he didn't want it to appear as if he was peddling influence or power,” Potter explained.

But Potter acknowledged missteps by Carl Meeks LLC and Hogston have driven up tensions.

“So [the owners] made two mistakes, right, they made a mistake not realizing that when they started Copperhead, and they made a mistake and not screening Driven MX, as far as complying with the law is concerned. We've remedied those things. And I think it's put in place, you know, policies and procedures that would keep either of those things from happening,” Potter said.

He said the owners, including Hogston, “Didn't really have an appreciation for how many people would come down.”

The volume of riders at the root of many of the neighbors' complaints.

Despite these complaints, Potter said there's no intention to stop riding entirely, so long as Carl Meeks LLC is complying with the issuance of the Board of Adjustment.

“I don't know why they would stop doing it. If they're complying with the law, and they enjoy it,” he said.

Photos of the track obtained by WHQR
Photos of the track obtained by WHQR

‘We don’t regulate’

Trey Thurman, Pender County’s attorney, spoke strongly against the county intervening at the May BoA meeting.

“We do not regulate people riding dirt bikes, unless it is a business activity, or ATVs, or whatever it is, if you want to go on your own property, and ride a dirt bike 24 hours a day, subject to the noise ordinance, which kicks in at 11 p.m., and goes until half an hour before sunset, and sunrise, I'm sorry. You can't, we don't regulate,” Thurman said.

A letter obtained by WHQR shows attorneys for Carl Meeks LLC sent a “proposed order” to Pender county officials, including Thurman, the night before the meeting. The order agreed to prohibit commercial usage of the property but advocated that so long as Carl Meeks LLC did so, they would have the right to continue to use the property's amenities unrestricted.

What impact the letter had on the county's decision-making process is unclear, but the language is very similar to what Thurman said at the following night’s hearing.

Potter confirmed that the letter was an attempted peace offering from the LLC to the neighbors. It included new screening mechanisms for tenants, detailed recordkeeping of parties using the space, and time limits on the use of the track. But those terms were never adopted.

He pulled back their offer during the May Board of Adjustment meeting, citing that the neighbors in attendance clearly would not be satisfied with the proposals.

“We came here today and put a set of rules and regulations on the table, that would be enforceable by zoning, that would resolve this. But quite frankly, I don't see that it is. Talking to my client about whether we want to propose them or not. And I think at this point, we do not,” he said during the meeting.

Potter’s withdrawal seemed to come as a result of neighbor's repeated assertions that the owners had something to do with the policy action around the property — specifically Judge Hogston, who was the initial registered agent for Carl Meeks LLC when the company was formed in 2020.

The neighbors struggled to find an attorney to represent them in this matter. They finally landed on Brett Deselms, who works out of Jacksonville — outside of Judge Hogston’s district.

But the county has not been overly cooperative with Deselms’ efforts. He filed a public records request in June pertaining to the May board of adjusters meeting, but it took the county almost two months to produce the desired records — despite being relatively recent.

“They're supposed to respond as promptly as possible,” Deselms said.

His clients, the neighbors of Carl Meeks LLC, often speculate that the county is granting preferential treatment to Judge Hodgston — but Deselms isn't convinced.

“I know that's my client's perception, right. So oftentimes, perceptions are clouded and things of that nature. So that's why I asked for these documents to provide some kind of peek behind the window here to clearly demonstrate that the county is going to treat him like anybody else. But unfortunately, if I do not get anything from the county, I just don't really have much of an answer to that question,” Deselms said.

Potter says the neighbors have it wrong. Hogston has done everything to comply with the county — nor would he have any direct involvement in any potential judicial remedies.

“They've outright accused Chad of corruption, and said the reason why Pender County is not taking this seriously is because he's a judge, which is ridiculous. [...] He's not somebody that hears or decides zoning for land use matters. That goes to the Superior Court,” he said.

County officials declined to discuss the motocross track on the record with WHQR, citing the quasi-judicial nature of the ongoing situation.

But, even without any insight from the officials, there’s another potential explanation for Pender County’s reluctance to intervene: local governments across the state of North Carolina face a precarious legal landscape surrounding short term rentals (STRs).

The North Carolina General Assembly has passed several pieces of legislation on STRs over the last decade, giving them considerable leniency under a conservative legislature focused on a broad application of property rights.

That means STRs have become something of a legal no-man’s-land in counties and towns that don’t want to find themselves in expensive legal battles.

Wilmington’s failed attempt to curb STRs

In 2011, North Carolina revised its regulations on short term rentals, prohibiting local governments from carrying out inspections and issuing fees to STR owners.

In 2019, the legislature doubled down. The limits previously established on property inspections for STRs were clarified to be grouped under The Vacation Rentals Act, strengthening legal protections for owners and further diluting local governments.

Additional legislation included language preventing governments from making owners seek registration or permits for their property.

But the City of Wilmington didn’t follow the new law — which it argued, in the face of fairly clear statutory language, applied to inspections and not zoning.

At the time, facing pressure from some community groups, most notably Residents of Old Wilmington, the city adopted a new ordinance implementing a swath of regulations for STRs. These included caps on the density of rental properties throughout the city and special zoning conditions for proposed STRs. Because in some places there were already more STRs than the caps would allow, the city implemented a lottery system to choose who could register and who would have to stop operating their rental.

These new regulations were met with frustration from owners. One owner, having already purchased a house for the purpose of operating a rental, was denied registration through the lottery system and took the city to court as a result, with help from the Institute for Justice, a libertarian nonprofit law firm.

The N.C. Court of Appeals found Wilmington in violation of state statutes. As a result of the suit, Wilmington paid out half a million in dollars in returned fees, over $300,000 in legal fees to the Institute for Justice, and at least $175,000 in outside counsel for its own failed legal defense.

Wilmington Mayor Bill Saffo told WHQR last year that the lawsuit has stopped the city from passing any new regulations on STRs. “We're also keeping our eye on the legislature that is very-pro property rights, with activists in that body,” he explained.

“And we thought we came up with a pretty daggone good compromise that a lot of other cities around the state were looking at. Well it was challenged, we were taken to court. And unfortunately, we lost, which kind of opens up the door for any property owner to put a short term rental in,” Saffo said.

The chilling effect

The decision sent shockwaves throughout neighboring communities, and caused places like Southport, dense with vacation rental properties, to reevaluate their own regulations.

In September 2022, the Southport Board of Aldermen rescinded permitting requirements for short term rentals, likely as a response to Wilmington’s litigation. The staff also began the process of refunding permit seekers to avoid the large-scale payout that Wilmington was forced to provide.

But the aldermen didn't touch zoning ordinances prohibiting short term rentals in residential areas. This is similar to the City of Asheville’s approach, which has so far staved off civil litigation while being able to regulate STRs (Wilmington didn't pursue a zoning-based approach to regulation, although the Residents of Old Wilmington group was still pushing for it as of last summer).

The Wilmington case and subsequent reactions from nearby towns show the ongoing tension between local and state governments on the issue of regulating short term rentals. Towns known for their tourism are caught in a bind: pressured to protect housing for existing renters, especially low-wage hospitality workers, while bowing to legislative pressure to not regulate STRs. For places like Wilmington, with historic downtown areas, there are also often clashes between STR owners and residents’ groups, who worry about what transient guests and potentially non-local ownership will do to the carefully maintained and often legally regulated aesthetics of their neighborhoods.

It’s not just an issue of potentially bad neighbors and NIMBY concerns — it’s part of the region’s housing problem. In the Cape Fear region, those AirBNBs and VRBOs are big business. According to the 2020 census, vacation homes and rentals make up 5% of homes in New Hanover County, 12% of homes in Pender, and 23% of homes in Brunswick County. 46% of homes in Wrightsville Beach are vacant for vacation properties. That’s why destination towns like Asheville, Wilmington, and Southport have been in the headlines for these regulations: local leaders talk about protecting renters who can’t compete with vacationers for scarce housing.

A proposed bill filed in the North Carolina Senate this spring threatened to eliminate nearly all power local governments have over short term rentals. It stalled in committee — but shows Raleigh’s continued interest in protecting the property rights of rental owners.

Given the legislative eyes focused on STRs, some local governments have become too wary to regulate the industry at all. Even, it seems, in a case where a noisy motocross track passes as an “amenity.”

While Saffo probably didn’t imagine a motocross track, he did seem concerned about how far STRs could go without regulation.

“They could come back with a much more property rights friendly type of concept and say, You can do them anywhere you want, when you want, and how you want to do them. And you don't have to talk to the city in any way, shape, or form. Our concern was, you know, we were hearing concerns from neighbors and neighborhoods that indicated they were having these huge parties and wedding venues, and there was no way for us to contact an owner,” Saffo explained.

“We’re living with what the courts said we can do," he added.

High and dry

Given the difficult legal terrain around STRs, it is unclear what remedy the neighbors of Carl Meeks LLC can pursue within the county — outside of a class-action lawsuit.

Residents could seek a nuisance complaint, but Potter is skeptical that a jury would find a property owner using dirt bikes on their own land an “unreasonable” use.

Attorney Brett Deselms sent a cease and desist to Carl Meeks LLC. But Potter responded to say they wouldn’t abide by the letter.

Residents are still left wondering what to do. Deselms is awaiting a response from Pender County before deciding his next steps.

“I don't know why the county attorney would be advocating for loopholes. The county attorney's job is obviously to advocate for what the county wants,” Deselms said.

“Maybe that's what the county's interpretation is, is that it's fine. I think it'd be appropriate for the county attorney to advance that. But if it's an interpretation that is contrary to what the staff wants, that'd be very odd,” he continued.

After seeing the showdown over Wilmington’s STR regulations, Pender may not want to stick their nose into an issue that may result in owners bringing lawsuits against them.

But for the neighbors, this isn't an abstract legal battle over rental regulations, this is everyday life — a life that has been loudly, dramatically altered.

Many of the residents own livestock, like cattle, they’ve moved to get away from the noise. Scott Walker has horses that people can pay to ride. He says the dirtbikes have made that business untenable.

One of the neighbors, Loraine Mcabee, lives near the property and worries about the Walkers.

“They've lost money on that because people don't want to ride in a nice peaceful area with that going on. Plus, the horses get spooked, so that's a safety issue. And there's zoned agriculture and horses, as far as I know, are agricultural,” she said.

Bill Mcabee, Loraine’s husband, agrees. “They've had riders that were out there and come across the edge of the property line closest to this way, which is probably only less than 1000 feet, to where the riders are. And they were scared that the horses were going to buck them off. So they quit coming.”

Even if the neighbors wanted to leave, residents allege they're losing property value because of the track — and they are doubtful they would be able to sell their homes under these conditions.

“That over there has devalued this property here. I would say at least $200,000. Oh, absolutely,” said Harris.

“I wouldn't buy this,” Ms. Mcabee concluded.

James has lived in Wilmington since he was two years old and graduated from Eugene Ashley High School in 2022. He has long-held a passion for the city’s many goings-on, politics, and history. James is an avid film buff, reader, Tweeter, and amateur photographer, and you’ll likely see him in downtown Wilmington if you stand outside of Bespoke Coffee long enough. He is currently receiving his undergraduate education from Wake Forest University in Winston-Salem, NC, and intends to major in Politics and International affairs.
Kelly Kenoyer is an Oregonian transplant on the East Coast. She attended University of Oregon’s School of Journalism as an undergraduate, and later received a Master’s in Journalism from University of Missouri- Columbia. Contact her on Twitter @Kelly_Kenoyer or by email: KKenoyer@whqr.org.