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Monday, May 27, 2024

Developers ask city to negotiate, withdraw proposal to bring 1,500 houses to Southport

Project Indigo II would take up 391 acres but the application to develop the 1,500 house project has been withdrawn in order to negotiate revisions with the City of Southport. (Courtesy photo)

SOUTHPORT — Applause erupted from the audience at the onset of the town’s board of aldermen meeting Thursday evening as Mayor Joe Pat Hatem announced a major development would be tabled — for now.

Developers East West Partners and Bald Head Island Limited sent a letter to city manager Gordon Hargrove asking for their zoning and annexation applications for Project Indigo II to be withdrawn.

READ MORE: Project Indigo deemed ‘low financial risk,’ city leaders worry about unknowns

“We believe voluntary withdrawal of the Project Indigo phase two application at this time will afford the City of Southport and the applicants the time necessary to incorporate desired amendments and changes to the applications,” Bald Head Limited CEO Chad Paul read aloud before the aldermen.

Paul said he and the development team spent over two-and-a-half years researching and designing plans for the 391-acre Project Indigo II but did not want to compromise the integrity of the city’s and community’s wants and needs.

The project would be an addition to Indigo Plantation Marina, built in the 1980s and 1990s, bordering Smithville Woods and Cades Cove. Had it received the green light as is, the mixed-use development’s residential plan could have almost doubled the current 3,800 population of Southport with an incoming 1,500 condos, duplexes, townhomes and cottages. It included 80,000 square feet of non-residential use, such as retail, healthcare office space and a restaurant.

The land is zoned as a residential agricultural district (R20), which currently allows roughly 500 homes. Developers needed the city to annex a chunk of it, as only 15% is in city limits (the remainder is in the county, though remains extra-territorial jurisdiction of Southport). The project’s forward movement would require a change of zoning to planned unit development (PUD) to accommodate higher density.

Discussions about the project began last December and were first presented by city staff in March, the proposal has drawn ire from community members concerned with increased traffic and improper infrastructure to handle the vast addition of housing, as well as environmental concerns. More so, both residents and town leaders worry it would overhaul coastal Southport’s quaint appeal and character.

The planning board created subcommittees to meet with developers weekly and assess the project’s impact in the areas of traffic, infrastructure, character and design, and environmental issues. Seven public input meetings were held between March and June to assess feedback from the community as a whole.

Comments have centered on officials correcting existing infrastructure problems — lack of stoplights, narrow roads — ahead of entertaining population growth. A section of Highway 211, the main artery in and out of Southport, is undergoing widening by the North Carolina Department of Transportation currently, but won’t be completed until 2026. Still, others raised issues with where the additional people would park when arriving to the town. 

Developers said around 40% of the property would contain open space and public use, as houses would be built four per acre.

The city sought consultation from Development Planning & Finance Group and civil engineering company WithersRavenel to research the financial impact of the project. The reports indicated Project Indigo II would create a total tax base of $584.6 million — an $18.3-million increase to what Southport current receives — with property taxes accounting for the bulk of revenue.

The projections were contingent upon annexation, also meaning coverage of city services would be included. In essence, the city would have to add new positions to its payroll: three firefighters, three advanced EMTs, six police officers, two city staff accountants and one city administrative assistant.

Yet, the financial analyses did not assess costs the city may incur with big-ticket infrastructure items, like the development’s electrical system and water and sewer (though the latter is being transferred to Brunswick County). 

Still, the overall evaluation was Project Indigo Phase II would be a “low financial risk.”

The planning board wasn’t persuaded by the numbers and at its July meeting voted unanimously to recommend the aldermen deny the development’s request for higher density zoning and annexation.

Planning board chair Sue Hodgin said at the meeting the city didn’t have the electrical capacity to service PUD. She also added: “In a big picture evaluation, [it] does not add overall value to the health, safety, or welfare of Southport and its citizenry.”

The application was to reach its official vote by the aldermen Thursday, but out of the gate, the mayor announced it would be removed due to a change of events.

Had the board voted it down, East West and BHIL would have to wait six months to reapply, town attorney Norman Blanchard explained at the meeting. Instead, the developers chose to voluntarily withdraw — which means they can present a revised application again as early as they wish, though normally it can take up to 60 days, Blanchard indicated.

“We look forward to meeting with the city of Southport staff and its development attorneys to seek guidance on the necessary application prior to resubmitting,” the withdrawal letter noted.

It was revealed the aldermen had met privately with an attorney regarding the project in days leading up to the meeting.

The goal, Paul iterated after reading the letter to the aldermen, was to have a “healthy discussion and negotiation” with the city.

Both developers have worked in partnership with municipalities before. Bald Head Limited — developer of the secluded island of Bald Head — developed Indigo Plantation Marina in Southport. East West Partners is behind the public-private partnership of River Place in Wilmington. 

“We have never said one thing, or committed to one thing, and gone and done another,” Paul said. “Limited has never done that in 40 years on anything related to the city. And we’re not going to do that here.”

He assured the governing board his team would not be turning over an identical application in a month. Rather, he wanted to know what it will take to make annexation work and amend the plan according to feedback from officials.

“I’m confident that there should be a happy place after that negotiation,” he said. “It really boils down to annexation.”

Aldermen Robert Carroll wanted the town attorney to state for the record whether the council was under any obligation to negotiate.

“You can or not,” Blanchard replied. “That’s the board’s prerogative.” 

Alderman Rich Alt also made sure city clerk Dory Dutton confirmed no “policy move” could be made during negotiations without a public vote. He was more concerned, however, with the board showing favoritism toward developers.

“Why are we having special negotiations with one developer and not having it for everybody?” Alt asked. “Why are we considering raising density levels for one developer, rather than everybody?”

Former city planner for Southport and planning board member John Allen, who now serves as alderman, explained it’s allowed under PUD, the zoning developers are requesting. The process for PUD requires a public hearing to engage input, so the project is molded into what’s acceptable for a whole community. 

“If you want to, you can say PUD is some special zoning that people get that other people don’t get — and, yeah, that’s right. That’s the whole point,” Allen said.

“But it’s not zoned PUD yet,” Alt responded.

“My point was simply we have no obligation to negotiate with any developer,” Carroll iterated. 

Alderman Karen Mosteller reminded the board larger scaled projects, according to literature from the school of governments, likely would have development agreements. 

Alt agreed there is a threshold on the size the development can be agreed upon; however, he wasn’t convinced by the number suggested under R20.

Allen said senior planner Wes MacLeod of the Cape Fear Council of Government suggested 400 to 600 would be a solid estimation.

“But we don’t really know what that number is,” Alt insisted. “It could be 350, it could 600, but we know it isn’t 900. We have to figure out the baseline to know where we start negotiations.”

“So would you like the city to spend 50 or 100,000 dollars on a development prototype of the site, so we know exactly how many lots could be put on?” Allen asked.

“No, I want the developer to come in and tell me what he’s going to do,” Alt added.

Applause erupted again from a packed audience.

The exact number would be impossible to determine, according to Allen, unless an engineer was hired to survey and calculate the amount of units to build on the land.

“I think 400 to 600 is plenty good enough number to start,” he added. “It’s not like the range is somewhere between one and 50 billion.”

The mayor assured the public will be involved in all future discussions as developers resubmit for Project Indigo II, though no date was floated as to when that may be.

“It is the will of the people, input of the people,” Tatum said.

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Shea Carver
Shea Carver
Shea Carver is the editor in chief at Port City Daily. A UNCW alumna, Shea worked in the print media business in Wilmington for 22 years before joining the PCD team in October 2020. She specializes in arts coverage — music, film, literature, theatre — the dining scene, and can often be tapped on where to go, what to do and who to see in Wilmington. When she isn’t hanging with her pup, Shadow Wolf, tending the garden or spinning vinyl, she’s attending concerts and live theater.

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