Saturday, July 20, 2024

CB planning board members voted on Harper Avenue rezoning despite financial ties to developer

A rezoning request up for consideration at Tuesday’s town council meeting was recommended by planning and zoning board members with two people from the board having business ties to the applicant. (Courtesy Carolina Beach)

[Update: Council voted 3-2 against the rezoning, with Mayor Pro Tem Deb LeCompte and council members Mike Hoffer and Joe Benson dissenting. Much conversation centered around the rezoning encroaching westward into residential areas.]

CAROLINA BEACH — A rezoning request up for consideration at Tuesday’s town council meeting was recommended by planning and zoning board members with two people from the board having business ties to the applicant. Yet, neither were required to recuse themselves from voting.

READ MORE: Resident petition started against height allowance of proposed Embassy Suites in Carolina Beach

At the April 9 meeting, Carolina Beach Town Council will consider a request from applicant Sally Sturdevant of STLNC LLC, from Hendersonville, to rezone 204 Harper Ave. from the mixed-use district to the central business district. Sturdevant also owns neighboring parcels 205, 207, and 209 Lake Park Boulevard, formerly the Welcome Inn, which closed in 2014

The Lake Park Boulevard parcels are zoned CBD, but 204 Harper Ave. is in the mixed-use district because it was utilized as a single-family structure. Sturdevant hasn’t submitted a development plan yet, but seeks uniformity among the parcels to enable future redevelopment.

The Cove House LLC originally bought the vacant Welcome Inn’s property in 2022 to build a new boutique hotel, but the plan didn’t materialize. Sturdevant purchased the parcels from Cove House LLC for $1.4 million on Feb. 28, according to New Hanover County property records.

Secretary of State records indicate STLNC LLC was incorporated on Jan. 31 with Sally Sturdevant as a registered agent. Sturdevant submitted the rezoning application as “STB LLC” on Feb. 23, six days before the purchase closed.

Planning and zoning board chair Wayne Rouse — a realtor with Coldwell Banker — was Sturdevant’s buyer’s agent for the February property purchase. Rouse disclosed his connection to the applicant at the beginning of the March 14 meeting and asked staff if it would be appropriate for him to participate in the public hearing for STL LLC’s rezoning request. He added the transaction had closed, he had already been paid, and he was no longer representing Sturdevant.

Planning director Jeremy Hardison said if a board member has a “specific, substantial, readily identifiable financial impact” in the outcome of a vote, it would be deemed a conflict of interest and the person would need to abstain from the hearing. 

Hardison used language from North Carolina general statute 160D-109 (b). The statute also states:

“An appointed board member shall not vote on any zoning amendment if the landowner of the property subject to a rezoning petition or the applicant for a text amendment is a person with whom the member has a close familial, business, or other associational relationship.”

Planning board members are appointed by council with three-year terms.

CB’s conflict of interest policy states it is essential for town officers, employees, and agents to avoid engaging in conflicts of interest, “whether real or apparent,” in order to preserve the public trust of town residents.

While Rouse, who was appointed in 2017, said he did not have a financial interest in the outcome and continued with the vote, vice-chair Jeff Hogan is Sturdevant’s business partner.

Hogan invested with Sturdevant in the commercial real estate firm JSL CB Properties LLC. Secretary of State records list him as the registered agent and a member of the company, along with a third partner Lawrence Hogan. 

Hogan didn’t mention his connection to Sturdevant at the meeting, but told Port City Daily he spoke to staff about it beforehand.

“They said as long as there’s no financial interest in the property that’s being done, then we’re not allowed to relinquish our vote,” he said. 

PCD reached out to the town for confirmation but didn’t receive a response by press.

Sturdevant is also an investor in the Carolina Beach wine and coffee shop The Vault, owned by Hogan, which opened in November 2022. Hogan added he has no blood relation to Sturdevant, which would have also required recusal.

Hogan owns Hang Ten Grill at 308 South Lake Park Blvd. and Celtic Creamery at 201 North Lake Blvd. as well. He noted his ownership in Celtic Creamery at the meeting and thought a potential development nearby, as Sturdevant was proposing, would not increase congestion because there would be an access at Harper Avenue.

This was brought up as parking and congestion was posed as concerning along Lake Park Boulevard.

“I wouldn’t have a problem with moving forward with this,” Hogan said at the meeting.

Attorney Ned Barnes represented Sturdevant at the hearing. He argued the rezoning would be aligned with the town’s land use plan by encouraging commercial and retail opportunities on Lake Park Boulevard.

Commissioner Ethan Crouch disagreed. He expressed concern the request would enable an excessively large, high density development in the space in contradiction to the land use plan and expand the CBD more westward.

Crouch was the only member opposed to commissioner Todd Piper’s motion for approval. Piper was for it as it would allow redevelopment along Lake Park, with accessibility from the back. It passed among the other six board members.

Hogan argued the business connection may have posed a concern if it was a close vote.

“Obviously, it was voted on 6-1,” he said. “So even if you take me out, there’s no perceived conflict.”

Hogan argued planning board members wouldn’t be able to do their jobs if they were required to recuse themselves from every request involving a business connection since Carolina Beach is a small town. 

“I have zero financial interest in that property,” he added. “I mean, I have partners that are all over this island but if they’re doing something that has zero financial gain to me, then I’m just supposed to vote on it on the merits.”

[Ed. Note: A previous version of this article incorrectly stated attorney Ned Barnes is with law firm Ward & Smith. Barnes does not work with Ward & Smith. PCD regrets this error.]

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