WILMINGTON — In the wake of government-ordered shutdowns to stem the spread of Covid-19, countless businesses have struggled to find workarounds or exemptions. Not every business has been successful but, after being banned in New Hanover County, personal vehicle sales were able to earn a reprieve — eventually.
When Governor Roy Cooper issued his stay-at-home order in late March, it left considerable wiggle room for businesses to be considered ‘essential’ — as well as a process to appeal their status. Like some of Cooper’s earlier orders, it left a fair amount of the interpretation and enforcement of the restrictions up to county and municipal authorities.
Shortly after Cooper’s stay-at-home order was announced, New Hanover County announced it would add its own additional restrictions, both to clarify and expand on what the state had deemed non-essential. The county order specifically closed auto dealerships, excluding auto repair shops and sales to essential agencies, a move that went beyond the state restrictions.
Two weeks later, the county relaxed this restriction, allowing auto dealers to resume sales provided they followed an 11-point safety regime. It was a win for local vehicle dealerships — but it didn’t come without a fight.
Local car dealer pushes back
Some of the initial pushback against the county’s restrictions came from Pat Koballa, best-known locally from decades of radio and TV commercials for the Stevenson Automotive group, where he worked for 32 years. Two years ago, Koballa left the group and now owns a Kia dealership in Wilmington.
On the morning of Saturday, March 28, shortly before New Hanover County announced it would be adding its own restrictions above and beyond the state order, Koballa emailed Commissioner Rob Zapple to ask that the county consider auto sales essential.
Zapple responded that, while the county did include auto repair services as essential, general sales to the public were banned by the order taking effect March 30. Koballa pressed his case, saying he felt his industry was being targeted.
“The need to purchase vehicles will occur during the Order for various reasons. Essential workers and first responders will have these needs. Our local residents will leave our county to purchase elsewhere or have outside dealers delivering vehicles into our community. Auto dealers do a lot for our local community and economy and I feel as if we were targeted in this Order,” Koballa wrote.
The county order remained in place. But the county didn’t necessarily have the final say over whether or not Koballa’s dealership was considered essential.
State, county, and municipal orders
While an order from the Governor effectively becomes the law of the land, under state law, when a county issues a state of emergency the municipalities have to officially consent. Usually, there’s little reason for them not to: New Hanover County has historically issued states of emergency for hurricanes, where partisan or ideological differences don’t often play into the response (if nothing else, hurricanes have typically been times of bi-partisan cooperation in the region).
But the Covid-19 pandemic is clearly different. It has already lasted longer than any storm-related emergency and there have been public disagreements, to put it mildly, about how to handle it. This included some internal disagreement among county commissioners on whether the initial emergency declaration was needed. According to county emails, on March 20, commissioners Woody White and Jonathan Barfield, Jr. both stated they did not support the move (White has been much more vocal about the issue since then, while Barfield has kept a lower profile).
So, because there was more disagreement than usual for a state of emergency, and because Koballa’s business is — along with several other major dealerships — located in Wilmington city limits, the city could issue its own set of emergency regulations, or simply decline to consent to the county’s order and operate under the less-restrictive state order.
Lobbyists and lawyers step in
By late evening on Saturday, March 28, less than twelve hours after learning the county was planning to ban auto sales, the North Carolina Automobile Dealers Association (NCADA) had drafted a letter to Wilmington Mayor Bill Saffo. The letter from the state’s dealership trade association was drafted by President Robert Glaser and General Counsel John Policastro and shared with Koballa, Parkway of Wilmington, and other attorneys (you can read the full draft letter at the end of this article).
In the letter, NCADA pointed out that the state order allowed auto sales and listed some ‘best practices’ to allow safe operation, pulled from a Wake County order that allowed dealerships to operate if they followed a safety protocol.
The letter asked Saffo both to exempt auto dealers from a citywide prohibition and to present NCADA’s case to the county.
“[S]hould the City of Wilmington decide to issue its own ‘stay at home’ order or similar restriction in addition to the Governor’s Executive Order 121, we respectfully request that the order declare that automobile dealers and auto sales, repair, and maintenance are ‘essential businesses’ that may still operate while maintaining necessary social distancing and adhering to other measures that protect the health of all involved. We also ask that you review these issues with New Hanover County leaders and local Health Department officials for their consideration as well,” the letter concluded.
Who makes the call?
Saffo received the letter on Sunday, March 29, and that evening he and Koballa exchanged texts.
“Maybe a better idea would be to have Gov Cooper health and human services sec Dr Cohen contact our health ppl. Ask your lobbies to call her or Gov to tell them it’s okay,” Saffo texted.
“Can you pass it along and if not who should it be forwarded to? I expect you have some encouragement power as well. Thanks for any help you can provide,” Koballa replied.
“Pat that letter should be given to the new Hanover Health dept. now. They are the folks who are asking for it. We are doing what the health experts are telling us. I’m not a doctor and since [this] is a public health crisis I have to depend on what they are saying. If they can get comfortable with it and say ok I’m ok,” Saffo answered.
Koballa then emailed Commissioner White, telling him that Saffo had declined to act on the NCADA letter or forward it to the county himself.
White emailed County Manager Chris Coudriet, asking if “the health department is the one requesting the stricter” rules. Coudriet said that was not the case.
“No, the team drew up a list of measures absent economic or political factors and made that available to the city staff last week at the city’s request, and we continued to make clear statements that we and the state were advising against an order to wait and see what the governor might do. That’s the list the mayor discussed at the city budget meeting Friday, and the list the mayors, the chair and vice-chair discussed during their call. They chose the items during the call and then lawyers wrote it up to include continued change into Saturday morning,” Coudriet responded, referring to the Saffo, mayors of the beach towns, Chair Julia Olson-Boseman and Vice-Chair Patricia Kusek.
White followed up, adding that over a dozen individuals or companies had contacted him, telling him the city was blaming the county for the stricter regulations. Coudriet said he had a “full group” of people who would “push back on that narrative,” including several department heads. Coudriet added that top Wilmington officials had asked directly if the county would recommend any specific additional regulations and that the county told them ‘no.’
While Courdiet denied that the county had any say in what Wilmington did, in an email to Health Director Phillip Tarte he did note that Tarte had reviewed and “proferred an opinion” on the safe operation protocol suggested by Koballa.
On Monday, March 30, the county’s order went into effect, including the ban on most auto sales. The City of Wilmington followed suit.
Mecklenburg checklist
Several days after the state, county, and city orders took effect, NCADA reached out again, this time to over a dozen Wilmington-area car dealerships. Sent on Thursday, April 2, the email from an NCADA attorney detailed the ‘Charlotte/Mecklenburg’ agreement, part of that county’s order which allowed auto retail sales provided an 11-point checklist was followed.
Before noon that day, the Mecklenburg checklist had made its way to Coudriet at least three times.
Koballa sent a copy to White, who said he found it reasonable but that only Olson-Boseman or Saffo could amend their respective orders. Capital Nissan Executive Manager Noah Woods sent a copy to Barfield, who also forwarded it to Coudriet. At the same time, the City of Wilmington began reviewing a copy, and City Attorney John Joye forwarded it to Coudriet for review.
Coudriet asked the Health Department to review it (noting that Director Tarte had already reviewed Koballa’s earlier suggestion).
Tarte responded that, while the Mecklenburg checklist provided “a measure of protection,” he continued to recommend prohibiting personal auto purchases. In an email to top administrators and officials, Tarte did note that business models that were completely online could conduct sales.
By the afternoon, Tarte was ultimately directed to contact each individual car dealership to inform them the county was not going to keep its order unchanged.
But, apparently, auto dealers hadn’t actually lost.
County reverses course
Ten days later, the county revised its order, allowing auto sales — provided dealerships adhered to an 11-point checklist that was, essentially, the Mecklenberg protocol (you can find the list as Exhibit A in the official April 13 order, here).
It’s not entirely clear what changed between April 3 and April 13, or what tempered or changed Tarte’s assessment that personal sales were best deferred until a later date. However, it seems that the arguments of local dealers did have an effect, if a delayed one.
Asked how the county came to the revised decision, staff deferred to Chair Olson-Boseman, who ultimately had the authority to revise the emergency declaration. Olson-Boseman issued the following statement:
When we initially implemented New Hanover County’s Stay At Home Order, it closed auto dealers except when they were providing sales assistance to an essential business, government, nonprofit or healthcare partners request — especially as it related to the emergency response to COVID-19. When we updated and extended the local order on April 13, we also lifted a few mitigation measures, like opening boat ramps and allowing more motor vehicle sales, which began to align us with the Governor’s Order. Some local measures stayed in place like restrictions on short term rentals and closures of beaches, considering our characteristics as a destination area.
You’re right that our Public Health director did consult directly with stakeholders. Those discussions and other conversations with key staff, along with research done by our staff and auto dealers, led us to Mecklenburg County’s 11-point process that they had implemented for auto dealers. So we adapted that process for our county, in order to make it safer and allow auto sales. One big piece of that 11-point process is to ensure it could be followed and adhered to. The city felt like that was possible, and with the collaboration and guidance from Public Health, we felt comfortable making the decision to phase back in auto sales with the extended Stay At Home Order. It was definitely a collaborative decision, and the mayor and I felt like it was something that made sense to loosen restrictions around.
NCADA – Letter to Wilmingto… by Ben Schachtman on Scribd
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