Without much fanfare, Asheville City Council moves to put more power over hotels and downtown development in their hands, reversing nearly a decade of city policy
Above: Asheville City Council member Brian Haynes. File photo by Max Cooper.
Local politics, like any other level of politics, is often a study in contrasts. Sometimes, its decisions don’t have a huge amount of impact or are overruled by other levels of government. But plenty of the time big changes to our city begin not in Washington or Raleigh but within the art deco confines of City Hall.
That’s especially true when it comes to development. What can and can’t be built — and where – is one of the areas Asheville’s local government has the most power over, and what local elected officials and the bureaucracy that ostensibly serves them do (or don’t do), can have a huge impact on the kind of city we have around us. Sometimes it happens with fanfare and controversy as different sides spar with each other from the public comment podium and the Council dais.
Other times it attracts relatively little comment, or quiet discussion rather than raised voices. But the impact can be just as big even if the result is, on the surface, a jargon-filled policy or a technical rule change. On Sept. 27, Council agreed to put more control over what does (and doesn’t) get built in the city’s core — and what hotels are allowed anywhere in town — directly in their hands.
While it will likely be a few months before the formal rule changes come back before Council, this represents a major shift away from the way city government’s dealt with the shape of downtown for nearly a decade. That time which saw less development battles come before Council and more power shifted to city committees and staff. That approach, a major hallmark of the city’s development policies during the decade-plus tenure of City manager Gary Jackson, has become increasingly controversial. Last year’s elections in particular demonstrated deep opposition to some of the ways this policy had played out, and Council has shifted accordingly.
To understand why this shift is so important, and what drove it, it’s worth understanding a little history.
While the city’s made up of many neighborhoods, the rapidly changing nature of downtown Asheville over the past three decades forms a key part of Asheville’s story and its current challenges. Once nearly abandoned, it roared back as a center of economic and cultural activity, with increasing tourism, business and skyrocketing property values all marching right along.
As that happened, where exactly downtown should go and what should be built within it became ever more pressing questions.
In the late 2000s Jackson, the city’s development staff and elected officials agreed to march forward with the Downtown Master Plan, an attempt to overhaul the city’s development rules in the area, along with laying the groundwork for a bevy of other projects tied to Asheville’s core. For two years they, a range of appointed citizens and consulting firm Goody Clancy poured over the details of what the plan would look like. The city adopted the plan in 2009.
This wasn’t without plenty of controversy at the time. Leaders from Asheville’s African-American community said the plans still largely excluded them. Neighborhood activists believed it was too developer-friendly, and volleyed back and forth with the consultants crafting the new course. Also, while Council accepted the plan, each new program or rules change needed to be funded or approved on its own; the master plan just laid the groundwork. Some never came to pass, floundering due to political opposition or limited resources. Most notably, a proposal to create a powerful business improvement district independent of local government and funded by its own separate tax drew fire both from conservatives opposed to the tax hike and left-leaning Ashevillians who asserted it put power directly in the hands of the wealthy, and was accordingly scrapped.
While the master plan touched on many areas of life in the city’s core, its rules on development were perhaps the most significant change, and they’re the one that stuck.
Though things still looked pretty rosy when Council first started the ball rolling on the plan in 2007, by the time approval of its development rules came up the recession had Asheville’s leaders worried that downtown remained economically fragile, and lengthy development battles were a common sight in City Hall. Any project over 100,000 square feet automatically went before the elected officials, and those projects were a lot more likely to come up in downtown. Some, particularly in the business and development spheres, felt that process was too random.
Indeed, most of the elected officials wanted the changes too too. Upon her election as a Council member in 2009, Esther Manheimer (later elected mayor in 2013) said that moving forward with the plan’s recommendations was a key priority, and she believed the election results showed that the people of the city agreed. To its supporters, the master plan was the essence of necessary reform, arrived at after years of careful, professional deliberation.
So the plan called for tighter design guidelines in downtown but put less power in Council’s hands, shifting decision-making ability on all but the largest projects to the city’s Planning and Zoning commission. The ceiling for Council review shifted from 100,000 square feet to 175,000 (or over 145 feet tall).
But the controversy continued, and there was never a consensus on the plan’s wisdom. As the rules made their way before Council in late 2010, critics still believed it shifted too much power into the hands of appointed boards and powerful developers.
The main objection at the time came from Council member Cecil Bothwell, the only one of 2009’s crop of Council members to outright oppose the changes (Council member Gordon Smith was open to a lower threshold than the one proposed by the plan but ended up supporting its recommendations). Generally allied with neighborhood activists who wanted a tighter rein on development, Bothwell asserted the threshold change was arbitrary and undemocratic. Some downtown residents also criticized the changes, warning it would shift the nature of the area for the worse.
But the changes still had plenty of advocates too, including among residents and groups like the Downtown Association, who claimed that the new process was more streamlined and reasonable. In November 2010 they carried the day. The idea was to encourage mixed, denser residential and business development in the center of the city by creating a faster, more predictable, less lengthy (and thus less expensive) process for approval.
What happened was a bit different. While downtown certainly did see some housing and business development, one of the major beneficiaries of the master plan’s changes were hoteliers. As the local economy picked back up and tourism hit some of its highest levels ever, downtown Asheville saw a hotel boom. Since the new rules went into effect in 2010, the city signed off on seven hotels in the area with a total of 870 rooms, with more in the pipeline. By comparison, downtown added just over 700 housing units during the same time.
This coincided with housing costs rising to such levels that Asheville has recently made national lists as one of the most unsustainable places to live in the country, due to the gap between high costs and its unusually low and stagnant wages. City leaders have admitted the situation is a crisis, and that the city’s current approaches can’t contain it. Rents also went up for some local businesses as chain stores started to gain more of a foothold in downtown.
With all that in the mix, last year’s local elections showed some major dissatisfaction with the city’s current development policies, especially the proliferation of hotels, few of which had ever gone before Council.
Of the three victors in that election, two — Keith Young and Brian Haynes — were openly critical of the rush of hotels and declared it was time to put more power over downtown development back in Council’s hands. The third, Julie Mayfield, said she was open to the idea.
The new Council’s first meeting last December saw an immediate shift on the issue. Since that meeting just over five years before, the master plan’s reforms hadn’t been the object of a serious push for overhaul from the Council dais. They had become, at least from Council and staff’s view, a part of the way the city worked. While the plan recommended a four-year review of the changes, that date sailed by without scrutiny.
Late last year Council members new and old declared themselves committed to some form of overhaul and re-centering more power over downtown development back in their hands, though they differed on the exact way to do it. Council next got an update on the topic at its April 26 meeting, where one exchange summed up the tensions over the issue. Planning Director Todd Okolichany informed Council that a March public input session had not shown support for new hotel regulations. Haynes quipped back that if that sentiment actually represented the view of the general public, he wouldn’t be sitting on Council in the first place.
Since the new Council’s first meeting showed that the political terrain had shifted, staff had held multiple meetings. Alongside the March forum, they’d conducted an online survey, presented to the N.C. Lodging Association and a special meeting of the Downtown Commission.
At the end of all that, staff recommended sticking with the master plan, leaving power over all but the largest projects in its hands and that of the planning commission.
“The current review threshold was developed during the Downtown Master Plan (DTMP) process completed in 2009, which included extensive community input and engagement and was ultimately adopted by City Council,” the official staff report read. “Staff also reached out to several other cities in North Carolina in order to inquire about how those cities review projects in their respective downtowns. All of the cities that had design guidelines or standards, review downtown projects at the staff level with the rationale that those cities are trying to encourage growth and development in their downtowns.”
However, when it came to hotels, staff did recommend that Council review all future proposals over 50 rooms or more, asserting that this would give more opportunity to assess the impacts. While Okolichany noted staff focused on downtown, he added that Council could choose to make that rule apply to the entire city.
The projects would be considered “conditional zoning” which gives Council a fair amount of latitude to try to set terms on the acceptance of the project.
“While there is not consistent feedback about the growth and impact of the hospitality industry in downtown, it can be acknowledged that a number of the recent, larger-scale proposals in downtown are hotel developments,” Okolichany said, adding that staff did believe they needed to improve their process for informing the public about major developments.
Bothwell remained in favor of shifting back to the 100,000 sq. ft. limit, and asserted that the new hotel restrictions were necessary throughout the city.
“I think it would make sense to extend the 100,000 sq. ft. limit throughout the city,” he said. “We’re about to see a boom in the River Arts District as we redevelop the roads there, I think we’re very likely to see hotel projects start coming in there. It also could be very likely in West Asheville along Haywood Road, where things are taking off.”
“Various Councils will have to decide where they need to be in the moment,” Smith said, asserting that now the “100,000 number makes sense to me.”
However, he added that he’d like to see certain types of development given a higher threshold as an incentive. For example, a residential project that devoted 80 percent of its space to apartments and had a fifth of those as affordable housing “might not have as low of a review threshold if they’re meeting some of those big city goals.”
Mayfield liked the idea, “if it’s legal,” and also supported the lower threshold.
“When these rules were put into place in 2010 we were in a very different place in terms of development in the city and what we were trying to encourage,” she said. “We’re not in that place anymore. I think we should err on the side of having more involvement in the development that affects our downtown and the very core of it particularly.”
Haynes noted that the hotel restrictions needed to cover, at the very least, areas like the River Arts District and the core of West Asheville as well as downtown.
Smith wondered if the city only limited hotels in certain districts, if it would find “100 room hotels just beyond the district boundary.”
“I guess if there was a market for it, you might,” City Attorney Robin Currin said. “I guess that’s what you’ve got to decide.”
Smith replied that he was more interested in citywide restrictions on hotels for this exact reason: to avoid “unintended consequence of sprawling, big buildings outside these districts.”
“In some ways we’re talking about managing tourism in some aspect of this,” he added. “For me, I feel like this is a really clumsy way to go about it, to use this type of tool. I’d much rather work with Buncombe County and the Tourism Development Authority around a sustainable tourism study that would help us to work together to work together to decide what is our carrying capacity. How many rooms are enough here, how can we achieve environmental, economic, social sustainability with our tourism industry.”
Without that “bigger conversation,” he said, he didn’t think the core issues would be addressed.
Mayfield said she shared some of those concerns, and felt that more attention needed to be paid towards preserving downtown’s “historic fabric,” though she confessed that she didn’t know the exact answers.
However, she did suggest that any demolition of an existing downtown building might need to come before Council as well.
Manheimer noted that staff were looking at similar issues, but that it was a bit farther “on the horizon” than the more immediate discussions around hotels and Council’s power over development.
“When we hear reports about all of the benefits of tourism, we never hear about the costs; it’s not really been quantified,” Bothwell added. “Is it costing us more than its worth?”
Manheimer also favored a citywide review, though at around 20 to 25 units rather than 50 (something other Council members backed too. “That seems to me to be the only way to get a good handle on the growth of hotels in the area.”
Smith also wanted Council to, in the future, look at putting similar reviews to curb chain stores.
“As rents rise, big chains become more attractive to building owners,” he said, and staff should look into “review of applications for retail spaces of 3,000 feet or greater within the downtown district.”
Manheimer wanted a closer look at how such a rule would have affected chains that came to downtown in recent years. Wisler wanted much more extensive study before going forward with any such step, “to run by various organizations and the public.”
“People who do development in downtown might be freaking out about how much we’re saying is going to come to us,” Mayfield noted. “We’re not saying that means you’re not going to develop here. My view is if you are going to develop here what you build needs to add to the city. It needs to contribute to the incredible urban fabric and vibrancy of our downtown.”
“We are special enough here that if you’re going to build here and if you’re going to invest here, that building and that use, to some degree, has to contribute to the success of Asheville,” she added.
While no formal vote was taken, the level of consensus among Council means that more power over development in downtown, and hotels across the city, is likely in the cards.
Setting the stage
However, there’s likely conflict still to come. After all, as the March forum (and the initial passage of the master plan) showed, there is a constituency for the status quo on hotel and development rules. While the last election offers strong evidence that they likely don’t have overwhelming numbers, clout and cash are another matter. Likewise, Council members may differ more sharply when the specific rules come up for a vote.
The day after Council reached a rough consensus, Mayfield fielded criticism from some hostile hoteliers in the Tourism Development Authority. Some asserted that the comments at the March forum (where 18 people submitted comment cards against new hotel restrictions, versus 10 cards for) indicated public opposition to such measures and that hotels inside downtown and elsewhere in the city were “apples and oranges.”
A glimpse of another type of future conflict was the January fight over the hotel/condo project going into the former BB&T building. In January, Council approved the project 5-2, with hotelier John McKibbon offering a contribution to the city’s affordable housing trust fund, living wages for full-time employees infrastructure improvements.
A majority of Council lauded the arrangement, with Smith alluding to a “McKibbon standard” for hotels the elected leaders were willing to sign off on. However, critics asserted that the project still furthered the same problems as the rest of the hotel boom, that Council hadn’t driven a hard enough bargain. McKibbon’s company also refused to reveal how many employees would actually be paid a living wage (in many hotels only a minority of employees are full-time). As more control over hotels moves back to the Council dais, expect more disagreement over exactly what is and isn’t a good deal for Asheville. City Hall will see more development battles, especially if the hospitality industry continues its building spree.
In the meantime, the shift is a reminder that elections matter, and that even longtime city rules aren’t written in stone.