SUNSET BEACH –– A de-annexation bill could get expanded to remove nearly 1,400 acres out of the Town of Sunset Beach’s planning control.
First filed in March, Rep. Frank Iler’s House Bill 385 includes just 30 acres in the Sea Trail community; a proposed new version –– on the shelf for now –– would tack on 1,354 more, according to figures provided by the developer’s attorneys. All of the acreage at stake is undeveloped.
Sunset Beach has drawn the ire of what appears to be the entire development community with financial interests in the small coastal town for its attempts to de-densify and slow down the approvals of multi-family and townhouse developments.
Development heavyweights and Rep. Iler, R-Brunswick, call the town’s agenda “anti-development.” A faction of residents has begged the town to wrangle growth and honor its 2017 land-use plan, which only encourages single-family lots while discouraging high-density development.
In recent months town officials and developers have publicly sparred, each accusing the other of spreading misinformation.
After a set of dueling press releases in late April, Riptide Builders’ key point-person, Todd Rademacher (who also happens to be the town’s former planning director), asked the town to correct public misstatements by a councilmember. In an emailed response, the town attorney directed Rademacher to cease and desist from communicating with town officials in a similar manner or he would “immediately take action to stop it.”
About 15% of town
Riptide Builders’ August 2020 purchase of 221 acres of undeveloped land in Sea Trail set off a series of events, with officials clamoring to control mainland growth where land is left before more building takes place. Meanwhile, the development community asserts property rights are being interfered, making it nearly impossible to plan and advance projects while the town’s land-use code is constantly in flux.
Developed in the ‘80s as a golf course community, Sea Trail was first annexed into the town in 1990. Sunset Beach’s marquee community had sat dormant since its 2013 bankruptcy; the convention center has collected dust since its inevitable 2018 closure.
A months-long cat-and-mouse game began when the town’s planning board started forwarding a string of ordinances to council to control growth, with the express purpose of limiting and de-densifying development. Hundreds of acres in the town’s MR-3 district were previously granted multi-family use by-right. In March, town council required special use permits for the dense developments in the district; the next month, the town increased the minimum lot size in the MR-3 district and tweaked the setback rules.
At each step, development interests have protested the changes to no avail.
Sunset Beach has extraterritorial jurisdiction (ETJ) in areas outside of town limits that still fall under its land-use control. Half of the acreage proposed to be removed from the town’s thumb falls within its corporate boundaries; half is in the ETJ.
Sunset Beach stands to lose approximately 15% of its corporate limits and 29% of its ETJ –– a combined 20% loss of land within the town’s land-use control –– should the revised version of the bill become law. The area includes a planned hotel, resort business, and numerous commercial and residential projects.
Property and sales tax are collected only within town limits. Losing land inside its boundaries means the town could forfeit both land-use control and taxes in these areas.
Assistant Town Administrator Lisa Anglin said the latest version of the bill would gut $36.5 million worth of undeveloped property from the town’s tax base. Once the property is put to use, this could equate to a $300,000 annual revenue loss to the town, with another conservative $200,000 in commercial tax revenue at risk (however, this figure is difficult to estimate, Anglin said, as the property is still undeveloped).
‘Jerks the heart out of Sunset Beach’
Late last month, the N.C. House Local Government Committee held a hearing on a proposed committee substitute of the bill, which would tack on nearly 1,400 acres of land owned by Bill Clark Homes, RHH land, Carolina Dreams Golf, The Coastal Companies, Chinaway Corporate Development, and Riptide Builders.
Rep. Iler warned the town months ago the bill could get expanded. At the June 29 hearing, Iler told committee members Sunset Beach is the only entity he’s aware of that’s opposed to the legislation.
“This, I told them, was going to be the last resort,” Iler said of the legislation. “Actually, the last resort is going to be the courts and the ballot box.”
Once town officials saw the Riptide sale last August, they “started moving as fast as they could to change things,” Iler explained. “If any progress had been made in three months, I wouldn’t be standing here.”
Sunset Beach Mayor Shannon Phillips spoke “from the heart” at the hearing on behalf of the town’s residents, without prepared remarks. “It virtually jerks the heart out of Sunset Beach,” he said of the revised bill. “Everything that’s commercial, is gone. Every buildable lot that could be future commercial, restaurants and all.”
As a former business owner and current construction employee, Phillips said he’s pro-business and works every day to attract new commercial clients. “Yet, now, all that’s going to be ripped away. Our tax base will go to nothing. It will completely destroy our town. We have no room for growth,” he said. “If this bill passes, it is detrimental to the town of Sunset Beach to the point that you almost could go ahead and pull our incorporation –– because we can’t survive.”
Phillips said the way things have transpired is not representative of “good citizenship.”
“This has virtually come down to: If you don’t let me do what I want to do, I’m going to take my ball and go somewhere else,” he said at the hearing.
Separately referencing a proverbial ball, the developers’ Ward and Smith attorney Whitney Christensen told committee members “the town moved the goal post.”
Ordinarily competitors, the developers came together to unite against a common problem, Christensen said. Some builders have had to cancel contracts with families; land is cleared and graded with interested buyers, but building is interrupted because the town keeps changing its rules.
“As you know, this is all happening in the hottest real estate market the area has ever seen,” she said at the hearing.
A diverse mix of housing is necessary to support the area’s golf courses, which beside the coastal views, are the town’s main attraction, Riptide’s Rademacher told the committee. “[O]ur golf courses are desperately gasping for air,” he said.
New and diverse housing could resuscitate Sea Trail’s convention center, which closed because there was “nowhere to put the visitors,” he said. Since Iler’s bill was filed, Riptide has faced retaliation from the town, with officials issuing violation notices and risk liens for grass growing too tall on properties that had not seen similar scrutiny for years, according to Rademacher.
“This is a private property rights issue as much as it is an economic development issue,” he said.
Rademacher’s successor in the planning department, Chad Staradumsky, shared the town’s side, explaining all proper protocols have been followed to date. The town has approved over 900 units for construction this year, the planning director said, while modernizing its code using commonplace procedures.
“We welcome the growth and we see it coming, but frankly our codes needed to be updated to handle these impacts,” he said. “[W]e feel that the town council and staff are being asked to forfeit their elected duties at the behest of a few.”
Quizzed by committee members whether the town had actually broken the law in its de-densification pursuits, the developers’ attorney Allen Trask said essentially, no. The parties substantively disagree on legal interpretations of the code, Trask said, but “there is no legal violation.”
“We’re not talking about, to your good point, what the town can and cannot do,” he told committee members. “We’re talking about what they should or should not do.”
At the close of the meeting, Iler said he may remove some of the commercial acreage from the proposed bill substitute. The committee chair agreed to have the bill displaced, meaning it’s been set aside for the time being while the parties potentially work things out.
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