Tuesday, August 16, 2022

‘11th hour letter’ raises questions about how NCDOT regulates private sector

The N.C. Department of Transportation has exerted influence over this development for years.

The Hanover Reserve parcel, outlined in red. The Military Cutoff Extension runs through it, and Murrayville Road approaches diagonally on the bottom left. (Port City Daily/Courtesy New Hanover County)

NEW HANOVER COUNTY — It was June 14, the day before the deadline. Developer John Elmore wanted his project, Hanover Reserve, on the July 8 agenda of the New Hanover County Planning Board. The 62 acres on the outskirts of Murrayville had been in the pipeline for decades, and this would be a critical step forward. 

Hanover Reserve in its current form is a proposed mixed-use development molded by outside government influence, namely the N.C. Department of Transportation’s plan for the extension of Military Cutoff Road. 

Developers assembled these parcels and many more in the ‘90s with single-family lots in mind. But the finishing touches were now being put on an application for something different: a commercial node with multi-family potential, on an arrowhead-shaped tract, bisected by the route for NCDOT’s forthcoming extension.

The extension first came on the scene as a public concept in 2005. NCDOT selected its “preferred alternative” route in 2012, showing the Hanover Reserve parcel split vertically. Developers marched forward on single-family lots the next year, but were shut down in September 2013 by the county’s Technical Review Committee, which cited the NCDOT plans in their decision. 

Single-family lots were later approved in 2015 on parts of the tract outside the extension’s grip, as were some townhomes, but the arrowhead portion remained undeveloped for years, awaiting NCDOT action. NCDOT finally filed a condemnation action in late 2016 to obtain a right-of-way.

After that was settled, a reimagination took place. Hanover Reserve could be a flagship commercial node on a future corridor of significance, so went the plan. According to Elmore this idea sprang from the mind of the county’s former top planner, who had been turned down in seeking a connection to the new thoroughfare for Murrayville Road.

It could be a mixed-use hub stationed between a vast sea of single-family homes to the south and undeveloped land to the north, the last major complex northbound travelers will pass before crossing over the Pender County line. (Upon buildout, which is slated for 2030, Hanover Reserve “is expected to generate annual real property tax revenue of $652,000,” according to a fiscal benefits analysis generated in April 2021.) 

Elmore had worked through all of this in his quest to develop the property. He was prepared to move the Hanover Reserve application through public county channels and put the project one step closer to the finish line. 

Then a bombshell letter arrived.  

It was from the Wilmington Urban Area Metropolitan Planning Organization (WMPO), and it carried an unfortunate message. If the developers wanted to obtain their NCDOT driveway permit — a necessity — they must first make more than 15 alterations to the site plan. 

These ranged from minor variations to a potential deathblow. 

The developers had previously agreed to pay for the joining of Murrayville Road with the Military Cutoff Extension — a connection NCDOT first envisioned, then abandoned, but later legally signed off on. Hanover Reserve would be where it all converged. WMPO’s last-minute letter told Elmore to move the Murrayville Road hookup more than a football field south.

He pulled the application from the agenda and reached out to Commissioner Deb Hays.

“They are requiring us to move the connection of Murrayville 450’ south which is a non-starter,” Elmore emailed Hays. “This just put us out of business. Please call me.” 

A plan reshaped 

A final version of the Hanover Reserve site plan, submitted by the developers to New Hanover County. (Port City Daily/Courtesy New Hanover County)

The project was only briefly absent from the planning board agenda. It returned the next day upon Elmore’s request, after county officials deemed Hanover Reserve’s resurrection satisfied the advertising requirements of county ordinances. 

After consulting with his attorney, Elmore told members of the planning board in a memo that “we believe a number of these recommendations are on legally questionable grounds.” (Elmore declined to comment for this article.)

Three days before Hanover Reserve’s planning board hearing, Elmore reached out to WMPO executive director Mike Kozlosky with thoughts on the letter. 

“Three years ago, planning began and every agency involved including, DOT and WMPO, was consulted numerous times since its inception and until your 11th hour letter of June 14th we thought there was no opposition to this plan going before the Planning Board on July 8th,” Elmore wrote to Kozlosky. 

“Honestly, after seeing bullet point ONE I took the copy of your email I had been given and tore it up and threw it in the trash can.”

During NCDOT’s formulation of the Military Cutoff Extension, the department at one time pondered taking on the Murrayville Road connection itself, according to Elmore’s memo. But the state’s final blueprints left the road unconnected. 

In recent years Elmore worked with county officials to move away from single-family, and toward the commercial hub idea. (Port City Daily/Courtesy New Hanover County)

NCDOT and WMPO (as its local agent) have both landed in constitutionally tricky territory over previous maneuvers to pause the use of private property for unfunded road projects lacking a solid timeline. North Carolina courts have sided with aggrieved land owners, whose properties were frozen by the state with no compensation for years on end. Over the past two years, this overreach buckled NCDOT’s finances, with a combined settlement fallout hundreds of millions of dollars high. 

Though at first glance Hanover Reserve wasn’t impacted in exactly the same way as the flurry of “Map Act” lawsuits prescribe, it was caught in the whims of state road planners. The land was marked for condemnation on maps that varied throughout the years, making planning a project difficult. 

In late 2016 NCDOT filed a condemnation action to acquire a right-of-way on the Hanover Reserve land. Negotiations led to a pledge from NCDOT to provide access on the right-of-way for the Murrayville connection. The cost of the connection would be paid by the developers. 

The consent judgement in 2018 awarded a total $5.75 million to the landowner. With more security, the Hanover Reserve developers began work on site plans that installed the Murrayville connection at the location mandated in the consent judgment. 

The big-picture shift in this project — from a single-family venture to one of mixed-use — came at the urging of former New Hanover County planning director Wayne Clark, according to Elmore’s memo.

By this account, the county desired a connection for Murrayville Road along the Military Cutoff Extension. By the late 2010s, it appeared achievable only through private-sector investment. 

“This plan was a break from what we had historically been doing with the property, but we agreed to move forward and considered developing a plan that mirrored the county plan,” according to Elmore’s memo. 

Paramounte Engineering then came onboard, and the developers’ traffic engineer, Ramey Kemp and Associates, performed a Traffic Impact Analysis (TIA) — a routine endeavor required for large developments to obtain necessary permits. WMPO is tasked with reviewing these documents.

The developers’ traffic engineers submitted the TIA report to the WMPO first in December 2020. NCDOT asked for minor revisions in January. “[A]t no time did they mention or talk to our Traffic Engineer about the potential movement of the access point for Murrayville Road,” according to Elmore’s written account. 

After some back-and-forth over “traffic volumes for the u-turns,” the revised TIA was sent to WMPO on May 7. 

Meanwhile, Elmore pushed for his project to be placed on the July planning board agenda. Then the WMPO letter arrived. 

“Based on review of the analysis provided in the TIA report, the following improvements are required by the developer,” the letter began, followed by a lengthy list of demands. 

A spokesperson for NCDOT said the letter in question represents the wishes of four parties involved: New Hanover County, City of Wilmington, WMPO and NCDOT. (Initially, NCDOT directed Port City Daily to the WMPO, “as the letter you’re referring to is from them.”) 

The spokesperson added: “It is standard practice to provide a developer with final recommendations within 40 business days. In this case, we sent our recommendations to the developer in 30 business days from when a complete traffic impact analysis was received.” 

In an email to Kozlosky, in advance of the planning board meeting, Elmore wrote: “I do however believe that you have an obligation to tell me and the County who, if not you, came up with this last-minute scheme to move the road 450′ to the South which destroys this project.”

Kozlosky replied to Elmore that he was responding on behalf of both NCDOT and WMPO. The Murrayville connection had to be moved because “the combination U-turn/right turn movements at the Murrayville Road Extension tie-in location with Military Cutoff Extension were too high.” 

The NCDOT’s Congestion Management section was also involved in the TIA review, Koslosky said, given the size and location of the proposed development. This issue at hand was the proximity of a U-turn lane with the proposed Murrayville connection; it was too problematic and required Murrayville to be moved south for added separation, according to Kozlosky.

Showing signs of a potential compromise, Kozlosky added in the email to Elmore: “I was in contact with representatives from NCDOT yesterday and it is my understanding that they would support a modification to the design for Military Cutoff Road extension in an effort to accommodate the driveway at the existing location.”

On New Hanover County’s end, planning staff determined the outcome of negotiations between Hanover Reserve and the regulators “would likely only trigger a minor deviation from the master plan,” according to a statement from planning director Rebekah Roth. 

The development application was eventually considered by the planning board independently of WMPO’s conditions. When the two sides come to an agreement, the county can approve the changes administratively as long as a major overhaul of the master plan is not involved, Roth said in the statement.

Kozlosky, in an interview, said he and Elmore had a meeting following the July 8 planning board hearing. 

“Both NCDOT and Mr. Elmore’s traffic engineer identified some potential solutions that would retain the driveway at its existing location, and so further analysis is being conducted on those potential solutions,” Kozlosky said. “My goal is to have a solution that’s acceptable to all parties by the time that the item goes to the county commissioners for consideration.” 

‘They want you to do that?’

Chairman of the planning board Paul Boney minces no words in his characterization of the events. (Port City Daily)

“When did you get this letter?” asked Paul Boney, chairman of the planning board. 

The scene was the July 8 planning board meeting at the county courthouse downtown. Boney’s question was directed to Allison Engebretson of Paramounte Engineering, the representative for Hanover Reserve.

“We got it the same day that we submitted for this meeting,” Engebretson told Boney. 

“And that was?”

“The fourteenth of June.” 

“And how long had they had it?” Boney asked from the dais. 

“Since December,” Engebretson replied, apparently referencing Hanover Reserve’s submission of the first TIA. (Engebretson did not respond to a request for an interview.)

“So they’ve had it since December, and two weeks before this meeting they want you to do that? I find that disturbing at best,” Boney said. “I don’t know who from the DOT or MPO is here to speak to that. I don’t know if I really want to hear it. I find that disturbing.”

The planning board unanimously upvoted Hanover Reserve, sending the project to the board of commissioners for final approval. Like Kozlosky, Engebretson said there could be a middle path that will satisfy both the developers and regulators, and keep the project alive. 

“I hope that that will come quickly and that we will able to move on from this, so that we don’t have another six months of limbo on this project,” Boney said at the meeting. 

“You and me both,” Engebretson replied. 

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