Hotel dilemmas

by David Forbes January 24, 2017

A year after a controversial hotel vote set new political boundaries on the issue, Council again faces a similar dilemma with an election on the way. A look at the latest battle lines in the hotel wars.

Above: An image of the proposed Embassy Suites project, an eight story hotel that would be built across from another hotel, which in turn faces yet another hotel.

Ashevillians are angry about hotels.

While there were a lot of issues at play in the upsets of the 2015 local elections, the reaction to the hotel boom and the perceived rush of gentrification they brought with them, were certainly a major factor. It’s not hard to see why, as I detailed in a column earlier that year. In a city with a desperate housing crisis and incredibly low wages, for many locals hotels are places we can’t afford built for people who don’t live here offering jobs that pay locals badly to benefit those who, in some cases, openly want us forced out. So, as one might expect, there’s a bit of resentment.

Shortly after that election, a major hotel project by the McKibbon Group — the overhaul of the former BB&T building into the hotel/condo combo now known as the Arras — came before Council. The project was a bit unusual in some ways. It was an overhaul of an existing building, not the building a new one, but coming on the heels of the public backlash it also tapped into larger concerns. It also, unlike most of the hotels, actually went before Council for a vote. Due to the city’s zoning rules, most had only gone before the city’s Planning and Zoning Commission. Indeed, those rules were also a target of the public backlash.

Eventually, a majority of Council agreed to a set of conditions — infrastructure improvements, retail space for local businesses, contributions to the affordable housing trust fund and living wage jobs — and McKibbon’s project passed, with most Council members hailing the company as a good corporate citizen.

The conditions weren’t without controversy at the time. Council members Keith Young and Brian Haynes, who partly campaigned on slowing or halting the rush of hotels, voted against the project anyway. Critics of Council’s move noted, for example, that despite the hoteliers’ supposed commitments to a living wage, they only offered it for full-time employees. In plenty of hospitality businesses, many or even most workers are part-time, and McKibbon pointedly refused to specify how many workers at the hotel would actually make a living wage ($12.50 an hour at the time the project was passed, $13 an hour now).

Nonetheless, the “McKibbon standard” was repeatedly invoked over the coming months as where a working majority on Council was willing to go when it came to giving a hotel the green light. Things proceeded further as the year continued. Even Council members who hadn’t pushed for any new regulations on hotels in the years that they started proliferating downtown now asserted that new restrictions were needed. In late September Council came to a consensus, contra staff recommendations, to take more direct power over downtown development and require all but the smallest hotels to come directly before them for a process similar to that McKibbon’s proposal went through. They directed staff to draft up the necessary rules changes.

But those rules changes still aren’t on the books, something’s that frustrated some of the elected officials. In the meantime, three hotels have continued to move forward under the old rules, with only one headed to Council for final approval. Now, just over a year after the McKibbon standard was crafted at the Council dais, another controversial hotel proposal is back before Council this evening (barring a sudden delay). The Embassy Suites project, eight stories with 185 rooms, is across from a recently completed hotel. That hotel, in turn, faces another hotel just across Montford Avenue. All were built within the last decade.

Meanwhile, a recent data analysis ranked Asheville the second-fastest gentrifying city in the country and it is, once again, an election year.

Keeping silent

While the major hotel battles separated almost exactly by a year, might seem a case of legislative deja vu one thing is very different. While the Embassy Suites project is plenty controversial with the public, Council members have kept their mouths shut, in sharp contrast to the weeks leading up to the McKibbon vote.

This is due to the technicalities and interpretations of state and local zoning law which, while arcane, can have a major impact on what level of power Council does and doesn’t have in a given situation, and what gets built. That’s because the McKibbon project was what’s known as a “conditional zoning” hearing. To go forward in this case, a developer needs Council’s approval and the two parties can agree to a set of conditions. It’s common in these cases for elected officials to press for some concession to their goals (on affordable housing or sidewalks, for example) as part of a deal reached with the developer, and public statements before the formal hearing happens are pretty common.

The Embassy Suites proposal, however, is a “conditional use permit.” Jargon aside, that’s a more strictly technical hearing than the BB&T overhaul. When considering a conditional zoning decision, Council members can not only talk publicly, they can also make their decisions partly based on larger concerns about hotels coming into the city. By contrast, a conditional use permit is “quasi-judicial,” closer to a legal hearing than a usual zoning vote. Even members of the public wishing to comment on the matter are formally sworn in. Council is limited to basing its decision on a set of seven standards, and public comments are asked to stick to the same, though those range from technical (the project won’t negatively impact neighboring property values) to more subjective (how a project fits in with the character of the surrounding neighborhood). Those standards and how the developer asserts the Embassy Suites meets them can be found in the official city documents on the topic.

The office of City Attorney Robin Currin has, in this case, been particularly strict with Council about what the attorneys perceive as a lack of latitude on the issue. Several Council members said they were notified by city attorneys that if they voted against the hotels and there was any perception that their votes weren’t strictly made in accordance with the seven standards, or if they discussed the issue outside of the Council hearing, they could be personally sued by the developer.

That also means that, when it comes to any specifics of the Embassy Suites project and how they might vote on it, this time they aren’t talking to the press.

Shifting standards

However, given the continued rush of hotels, it’s a good time to revisit where Council members are in their views on how to generally address the anger and concerns of the public. On this, they were less constrained.

“I think Council is well aware of popular opinion,” Council member Gordon Smith said. “I continue to press for a sustainable tourism study” to “find some common vocabulary and some common facts” to better deal with the issues posed by the city’s tourism boom.

Smith was one of the main architects of the McKibbon standard, publicly requesting many of its core conditions as requisite for getting his vote and coining the term. He still believes that’s a good framework, though he thinks it could stand to be tighter on requiring living wage jobs.

“I think that would be a good jumping off point for anyone coming to Council,” he told the Blade. “But I think the wage piece could be better defined as far as who that includes. If a hotel developer chooses to engage in rising to that standard that the community has said is very important, that said I think we’ll have to look at each applicant on the merits and work it out case-by-case.”

Haynes, however, remains deeply skeptical of hotel development overall.

“I’ve gone so far as to say I’d like to see a moratorium on hotels, but I’d definitely like to see the pace slowed, especially on hotels built in the city center” he told the Blade. “I feel like locals, the people that live here, have ceded downtown to tourists. The more we build the worse it gets. I rarely go downtown now, even though I love it. But I don’t know how many people on Council feel the same way I do, I certainly don’t think a majority do.”

[Editor’s note: Haynes later sent a clarification that he continues to enjoy going downtown, but does try to “avoid visiting during peak hours or on the weekend.” — D.F.]

A year later, he still feels like the McKibbon standard didn’t go nearly far enough.

“I like the fact McKibbon made these concessions and it became a better deal, but even under the so-called McKibbon standard, the living wage its offering is the bare minimum to survive in this town,” he said. “The type of jobs we should be creating in this town are a different type outside of the hospitality industry. Thirteen dollars an hour isn’t enough.”

“I think McKibbon was a nice starting place, but I don’t think we should think of that as the gold standard,” he added. “We can do better.”

“We are hearing from many, many constituents about their concerns about the growth of hotels and the effect it’s having on our city, from appearance to the nature of the community,” Mayor Esther Manheimer. “Our last election revolved around that issue, it was key and it continues to be key. It’s a challenge popular cities across the country are having.”

“I think each case has to be weighed on its own,” she added, noting that the McKibbon case was unique. “It’s hard to translate that into these other situations. We also have to navigate the legal limitations we have to operate under.”

“We just don’t have much power to regulate,” Council member Cecil Bothwell said. “As far as I can see, under state law and under our ordinances we just don’t have regulatory amount of power over hotels. They’re a legal use of private property.”

The best they can hope for, he claimed, is a McKibbon standard style deal. “I like the model, McKibbon’s proved to be a good corporate citizen.” He does view a living wage as particularly important, as “I really don’t like bidding down the value of labor.”

“I think we’re moving in a positive direction,” Young said. While the McKibbon standard is great, a hotelier meeting those conditions wouldn’t necessarily garner his approval. But in the case of the proposal a year ago he felt the “overall floodgates opening” when it came to hotels required elected leaders to be very careful about which ones they approved.

“That was one of the main issues of the election,” he added. “You have to take into account the people you represent and their opinions and the city they want.”

“It’s a hard question, it’s not going to be universal,” Council member Julie Mayfield. “We’re not in a position, legally, to turn down hotels because we just don’t want hotels downtown.”

If people were really against hotels, Mayfield said, the city could technically ban them from downtown entirely, but “I don’t think that’s where Council is, that there should be no more hotels downtown in the near future. Though I may be wrong about that.

She does see some benefits to hotels like jobs (she asserts that from talking to hoteliers, more hotels are paying a living wage due to market pressure) and increased property tax revenue.

“New hotels are not all bad,” she said. “But there are frequently opportunities to work with hotel developers to get even more benefits that enhance life for the people that live here.”

Overall, she said, the McKibbon standard is still what the city should aim for when working out deals with developers. “It’s less should we have or not have it, but ‘it’s coming and how can we get it to benefit Asheville.”

“Citizens feel that there are too many hotels,” Vice Mayor Gwen Wisler admitted, continuing that she was receptive but added that the city has to navigate multiple constraints to its power to regulate development.

Wisler believes hotels will have to be decided on a case-by-case basis, but she added “I do think you’re seeing us hold them to a higher standard than five years ago” and while “hotels are a permitted use, we’re asking a lot more questions.”

‘What the hell is the hang-up?’

Another major piece of this controversy is the new rules requested by elected officials in late September, namely the fact that they’re still not in place. Part of the intention of those rules was to streamline the process so hotels wouldn’t fall under sometimes widely different procedures like those used for considering the Arras and the Embassy Suites. While Council have waited for staff to craft these new restrictions, at least three hotels have continued going forward under the old rules, meaning that the flow of controversies hasn’t decreased.

One of those, the proposed Parisian hotel at the former Bank of America site, is an example of the kind of flashpoint that can happen over these projects. Back in 2015, some of the realtors and developers involved in the project pushed to move the nearby Department of Health and Human Services rather than expanding it, on the grounds that having DHHS nearby attracted “undesirables” and the presence of homeless and low-income people in downtown was scaring investors away from the project. Despite those particular hateful whingings about the presence of the non-gentry in the city’s core, the developers ended up proceeding anyway (as did the DHHS expansion).

Now, because the restrictions Council requested last year aren’t in place, the Parisian is set to go forward to the Planning and Zoning Commission for final approval rather than Council.

The delay in putting the new hotel rules into place is a source of major frustration for some Council members.

“I’m really impatient with staff,” Bothwell told the Blade. “For almost a year, we’ve been wanting to change the rules so hotels came before Council and staff seems to have other things to do with their time as far as I can tell.”

“Why has it taken so long? We just don’t get it,” Bothwell continued. “While we’re theoretically in charge, we’re often at the mercy of the staff, but we’re pushing.”

“What the hell is the hang-up? Why don’t rules come through?” he exclaimed, noting that some of the rule changes requested by the elected officials are as simple as changing a number in the zoning code.

“I’m really disappointed that it’s taken this long and we still haven’t got that,” Haynes said. “The fact it hasn’t come back to Council 13 months after the election is just disappointing.”

Whether one agrees with his particular stance on hotels or not, Haynes noted, he believes power on such a controversial issue should rest with Council so that voters could hold their elected officials accountable and decision-making would be more transparent.

“If you support a hotel, you should say so with your vote and let the public decide.” Haynes said, though he declined to  “I’m new to this, maybe government just moves at this slow a pace. But it seems like we move some things at a faster pace and some things seem to move slower. This does not seem like something that should take a long time to get back to Council. This seems like something that could have been done six months ago.”

“If that were the case, these hotels that have slipped through the cracks would have had to come before us. Where the blame lies, I don’t know, but I am disappointed.”

“We were anxious to get that going and it seems like the delay has been too long,” Manheimer said, adding she was looking forward to seeing the new rules this Spring and hoped to have a clearer process for all hotels afterwards.

Smith was more sympathetic to the pace of the changes, noting that with the bond referendum last year, an overhaul of the city’s general zoning rules underway and booming development, “I think we loaded [staff] up with more work than their hours could actually handle.” He also anticipated the new rules, including the hotel restrictions, coming up for a vote in March or April.

“I always want things to move faster, I also understand Council has asked planning staff to draft a lot of things,” Smith said, but he asserts he remains committed to reform.

“That’s something Council was clear about, responding to the alarm that many people are feeling in regard to an overbuild of hotel rooms,” he said, especially after the state legislature decided to raise the hotel tax without any of it going to city coffers.

While Mayfield expected the rules to come forward more quickly, she added staff have claimed that the writing the technicalities of the new rules is more complex that it looks.

“I certainly don’t think there’s been any intentional delay on anyone’s part,” she added.

“I understand staff has its hands tied with how many things are going on, so I’m patient for now,” Young said. “But if it doesn’t come up we’ll have to do something about it. I think it will come up in a timely manner.”

But the “floodgates are still open,” Young adds, and he’s also wary of Council members being too far removed from the concerns of citizens on the ground.

“We get blinders on, just because we’re in office we don’t take a look at the individuals that put us there,” he said. “You have to be open and aware to the people around you and how they want Asheville to be.”

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