Rejection notice

by David Forbes February 10, 2017

Parking, corporate expectations, technicalities, swearing, gentry pleadings, failed deals and more as Asheville City Council unanimously rejects a major hotel project

Above: Vice Mayor Gwen Wisler. File photo by Max Cooper.

For the latest chapter in a major political battle, the fight over the Embassy Suites had few of the traits one would expect. There weren’t any thundering denunciations or endorsements from local politicians. While Asheville City Council members don’t, with a few exceptions, thunder much anyway, missing from the prelude to this battle were even the usual rumblings of “community concerns” or “compromise” or “necessary decision-making.”

Given that the 185 room Embassy Suites — which came before the elected officials on Jan. 24 — was a proposal for a large hotel in the middle of downtown, that was surprising. There’s few things more controversial in local politics at this point. The fight over the profusion of hotels geared towards the well-off (or “upper-upscale” “boutique” and “luxury” if one prefers) taking up more and more of downtown has only escalated in recent years. The industry is, to put it mildly, not popular. The 2015 elections showed that Ashevillians were willing to vote accordingly, with candidates who’d made skepticism about the pace of hotel development a major point doing well.

At the heart of the backlash, as I detailed in a 2015 column, is the widespread sentiment that hotels are the vanguard of a particularly brutal strain of gentrification: places locals can’t afford built for people who don’t live here offering jobs that pay Ashevillians badly to benefit those who, in some cases, openly want the city’s working class and low-income populations forced out of downtown.

As last year began, Council found itself embroiled in a political fight over a major hotel, in the site of the old BB&T building. That time, a majority supported the hotel. Key to that support was the so-called “McKibbon standard,” named after the developer in that case. This “standard” is that a majority of Council agreed to consider approving a hotel if it provided infrastructure improvements, spots for local businesses, contributions to the city’s affordable housing fund and living wage jobs (though how many of those the McKibbon project actually provided remains a point of contention).

Yet Council remains, overall, divided on the issue of hotels. After all, the “McKibbon standard” was only supported by a majority, not by all, and even its proponents noted that while it offered some guidelines, there were still case-by-case decisions to be made. In September, Council agreed to take more direct control over future hotels, wanting all but the smallest to go before them for an up-or-down decision. But at the time the Embassy Suites hearing staff hadn’t brought those new rules forward — something that’s frustrated some on Council — and in the meantime, several hotels have gone forward under the older, more lenient rules. Many of them will never have a Council hearing.

The reason for the major difference was that due to the specific rules of the city’s zoning laws. Rather than a political debate, this was supposed to be a quasi-judicial hearing, with Council acting more like a legal board than a political decision-making body. Multiple Council members noted that city legal staff were particularly strict on policing these restrictions, informing Council members that they could be individually sued if there was any perception that their votes were not strictly based on the criteria. As City Attorney Robin Currin emphasized before the hearing, members of the public speaking at the hearing needed to “stay away from opinion on if this is a good idea or a bad idea.” Speakers at the hearing were even sworn in, though there were enough that they some had to put their hands on the backs of others for the oath to be ritually proper.

Like so.

The developer, Raleigh-based Parks Hospitality Group, came prepared. It’s not uncommon to see a developer hire a former Council member or mayor. Attorneys are rife within the political power structures of any town, and Asheville’s certainly no exception. Former Mayor Louis Bissette in particular is a common sight in City Hall, representing this or that corporation trying to get their development passed.

But the hotelier went a step further, bringing out an array of former city notables. Bissette was there, of course, but so were a former longtime city attorney and a former planner. All swore — in one of the lengthiest presentations a developer’s ever given before Council — that the project was completely within the city’s guidelines. A former Council member spoke in support of the project as well, as did representatives from the Asheville Area Chamber of Commerce and the Grove Arcade (both of whom also sit on city committees).

As Council kept mum head of time, it was hard to read the way they were leaning on this. Even most of their questions during the hearing were on technical matters though some of these — particularly on parking — were fairly revealing about the particular bases for Council’s skepticism.

But at the end of the night, there was something new: to a person, regardless of their other opinions, every last Asheville City Council member rejected this hotel.

Lucky seven

Why they did so, and why the developer claimed Council had to pass their proposal, revolves around seven standards. In a normal zoning hearing, Council can make their decision on a variety of grounds, including if they think that the zoning change wouldn’t benefit the public. In the “quasi-judicial” hearing, however, things are a bit more technically and legally complicated. Ostensibly, the developer has to prove that the proposal meets seven standards and Council, if they can’t find a reason in those standard to reject it, have to give it the go-ahead.

Those standards are:

1) That the proposed use or development of the land will not materially endanger the public health or safety

2) That the proposed use or development of the land is reasonably compatible with significant natural and topographic features on the site and within the immediate vicinity of the site given the proposed site design and any mitigation techniques or measures proposed by the applicant

3) That the proposed use or development of the land will not substantially injure the value of adjoining or abutting property

4) That the proposed use of the land will be in harmony with the scale, bulk, coverage, density and character of the area or neighborhood in which it is located

5) That the proposed use or development of the land will generally conform with the comprehensive plan, smart growth policies, sustainable economic development strategic plan, and other official plans adopted by the city

6) That the proposed use is appropriately located with respect to transportation facilities, water supply, fire and police protection, waste disposal and similar facilities

7) That the proposed use will not cause undue traffic congestion or create a traffic hazard

As one might guess, while some of these are fairly technical (impact on surrounding property value) others (“character of the area or neighborhood”) far more subjective. For any developer looking to bring forward a proposal like a new downtown hotel — something generally radioactively unpopular with the voting public right now — that poses a significant hurdle.

The developer tried to get around this by hiring, in city policy terms, the big guns. Not just Bissette — who’s often a go-to for developers heading before Council — but also former longtime City Attorney Bob Oast anr Blake Esselstyn, who had more than a decade of experience in the city’s planning. Combined with their other experts, they hoped to show that the hotel fell well within the seven standards, even the subjective parts. They also (likely in preparation for possible future legal proceedings)

Given the nature of the hearings, their presentation was very long (clocking in around two hours) and largely focused on technical matters, but many parts were revealing even to those who aren’t planners or urban policy masochists.

While the hotel would be right near two others, including across the street from one owned by the same company, Oast claimed the conference space it would deliver, its connection to multiple areas of the city and the economic doldrums of the area actually made it perfect.

“It’s on the western edge of downtown,” Oast said. “It’s in an area that’s long needed some sort of stimulus. You’ll hear later that it’s characterized by under-utilized and in some cases vacant properties.”

“There really is no better place for a hotel in downtown Asheville,” he continued. “We know that there are questions about the ubiquity of hotels in downtown Asheville. Even though I’ve been in Ohio for three years, I know that. But I want to re-emphasize: this is not in the center of downtown, it’s on the edge. We think this will actually relieve some of the pressure on downtown.”

He asserted that this particular hotel could actually spur development in that part of downtown and that some city plans identified it as an appropriate place for large hospitality buildings.

Then the parade began. Architects promised that the design of the hotel would meet the city’s guidelines and that it wouldn’t harm the safety of pedestrians in the area. A professional appraiser, Tommy Crozier, swore the hotel would actually increase nearby property values and provide about $250,000 in annual property taxes and $500,000 in hotel taxes (which go to the Tourism Development Authority, not local government).

At one point during the Crozier’s remarks, Council member Gordon Smith asked him to clarify “that when you’re using the terms ‘value’ and ‘highest and best use’ you’re talking strictly about dollar value or profitability, not community values or any other type of value.”

“Dollar value, yes,” Crozier replied.

Crozier also swore that “these hotels downtown sell out on a regular basis” and that the addition of another was called for by the market pressures.

A rendering of the proposed Embassy Suites project.

Traffic engineer Kevin Dean claimed that according to his assessment of the area, based on a day in November, the traffic impact would be “very limited.”

Esselstyn asserted, based on his experience working for the city and applying its development standards, that the project met all those, and would normally be approved. In fact, he claimed the clustering of this hotel near two others was actually a form of smart growth as it was dense development in the heart of downtown in an “under-used” area that city plans had specifically tagged for hospitality.

“This is outside the traditional core of downtown in something called the Patton River Gateway District,” he said, citing the downtown master plan, adopted in 2009. “There’s the statement that ‘hospitality is also highly appropriate due to highway access and walkable proximity to the traditional core, especially Pritchard Park and the Grove Arcade.'”

Gaps in the armor

But as the presentation continued, the questions from Council members on a number of the above standards grew more and more pointed.

Council member Cecil Bothwell pointed out to Dean that he’d picked a weekday in November to do his traffic assessment. While the engineer replied that monitoring traffic during a typical weekday was a standard practice, Bothwell pointed out that picking a day so late in the year meant that the calculations might not adequately account for typical tourist traffic into the area.

Smith pointed out that “while I have no doubt the witness did his best possible work,” during November there were wildfires throughout much of the region, meaning that traffic calculations might be even lower than typical for that time of year.

When Esselstyn cited city plans he claimed recommended the building of such a hotel in the area, Vice Mayor Wisler quoted a section of the city’s 2036 vision plan (adopted last year) that painted a very different picture.

“‘Thoroughfares are lined with thriving businesses mixed with residential and offices uses and neighborhoods are socio-economically diverse with a range of affordable housing choices,'” Wisler read. “So what that kind of talks about is diversity. I’m looking at this corridor and this proposal and it doesn’t look very diverse in the sense that it’s going to have three large hotels within a quarter of a mile.”

“But in a very localized section of the neighborhood,” Esselstyn replied, countering that within a slightly larger view of the corridor there were religious uses, social services and office spaces. “I don’t see this micro-cluster as a lack of diversity.” By that token, he said, one could consider Lexington Avenue as lacking diversity “because it’s mostly retail.”

“Mostly retail with some housing on top, and some hospitality uses,” Smith added.

Trevor Walden, the hotelier’s vice president for operations, ended up taking point to defend the project towards the end of the developer’s presentation.

“We do feel like it will be a successful project, like it will offer some uniqueness,” he claimed. While it may be within a literal stone’s throw of other hotels, “we feel like it’s a thriving market.”

Bothwell asked if Walden would pay a living wage. He claimed it would be “competitive” but that “I’m confident we’d be at or above those requirements” due to the demands of an upscale hotel.

Then Council member Julie Mayfield honed in on parking, noting that particular area had one of the most acute shortages in all of downtown. She wondered if Walden had considered additional public parking due to that.

“We feel like the spaces we’re offering will accommodate the needs of the hotel,” he replied. “It will suffice.”

“Well it will suffice for your guests: have you considered adding additional spaces that will serve the community at large, the workers that come in to Asheville every day and have a hard time finding spaces to park?” she asked.

“We’re open to that,” Oast replied. “The deck has 200 spaces, they’re not all going to be used at all hours of the day. During non-peak hours these could be made available to the public.”

But more Council members started to wonder about the impact on nearby parking, especially as it didn’t look like 200 spaces would be quite enough for the hotel’s workers to have parking along with its guests, especially as the proposed site for the hotel was currently being used for parking by the workers at the Hyatt across the street. Smith pointed out that those 200 spaces would receive demand for parking for guests in 185 rooms as well as 75 workers.

“So where are the workers going to park?” he asked Walden.

“In that general area,” the executive answered.

“That’s another impact,” Smith added.

Walden claimed that parking wouldn’t be an issue anyway. But Council member Keith Young pressed again about how the parking would accommodate the workers, Walden admitted that many of the workers would have to find spots in the already-strained surrounding area. Mayfield too wanted more clarification that the hotel wouldn’t make “parking in the area even more difficult.”

“I do not feel that our employers would add to that burden,” Walden claimed.

After the developer’s presentation, some locals — mostly those who owned or operated businesses in the area – encouraged the city to give it the go-ahead.

“You’ve heard me say for a long time: we’ve got to do something to develop our gateway to the city,” former Council member Jan Davis, who owns a nearby tire shop, told Council. Business in that part of the city’s core had actually faded, clean. “There was a lot of activity, that’s not there today.”

He claimed the Hyatt had boosted business in the area, including his, and believed the Embassy would as well, “this is an opportunity to clean up a bad area.” He further claimed that the city was losing business because of a lack of adequate conference space near the core of downtown.

Ruth Summers, director of the Grove Arcade (and a member of the city’s Downtown Commission), said she generally supported the expansion of the hotel industry downtown, including the Embassy Suites, but had concerns about the level of parking.

“The hotel industry has invested millions of dollars into our city,” Summers said, but “I feel that we’re at a tipping point, currently, with infrastructure issues.”

She encouraged the city to partner with the hotelier and find a way to subsidize Parks Hospitality building more parking spaces.

Corey Atkins, the chamber’s vice president for policy (and a member of the city’s Civic Center Commission), also encouraged approval, claiming it would revitalize the area, grow the tax base, and provide more events facilities within walking distance of the rest of downtown.

Montford resident Charles Rawls raised concerns that near two already busy intersections, the hotel would add more people trying to also enter and exit a parking deck in an area that already had issues with congestion and limited line of sight.

“It gets to be a little bit hairy sometimes,” he said. “I’m primarily concerned about safety, the traffic in that area is already a challenge sometimes, especially for people trying to go north on French Broad.”

‘It doesn’t sound like a great deal’

Oast then approached Council again, noting that while “we think the project stands on its own at is” and had adequate parking, they were open to adding more spaces, though “it would be quite expensive” and they were open to partnering with the city to add more spaces and had discussed the possibility with staff as “it’s not a cost we feel should be associated with our part of the project.”

“What I hear you saying is that if the city were to provide the funding needed your client might be willing to build the spaces,” Manheimer asked.

“Yes,” Oast replied.

Oast said that for $17,000 apiece from the city, they would be willing to build additional spaces.

“All so we can buy parking spaces on your client’s parking deck,” Smith said.

“But you wouldn’t have to pay for the land and we’d be willing to work with the city for terms with that,” Oast continued that the city would have the spaces for 30 years or some similar time period, “which is the life of your typical parking deck.”

Bothwell noted that the city would need to discuss such a thing far more extensively before even considering it, and Smith agreed. Oast replied with a specific written proposal to add 135 to 150 parking spaces if the city was willing to pay for their construction (at a cost, roughly, of $2.2 to $2.5 million).

Jackson added that while the additional spaces might be open to the public, the garage would remain private, its rates set by the hotelier and the money going to them.

“I don’t see how we can throw in $17,000 per unit and then just hand the property over to you,” Bothwell said. “That just isn’t going to work.”

“I agree with you: the city would be paying the additional costs but then the owner will reap all the revenue,” Mayfield said.

“Because it’s not a good deal,” Smith said.

“It doesn’t sound like a great deal for us,” Mayfield continued.

Manheimer noted that in the other cases where the city had a deck attached to a private development (the Aloft Hotel) the city instead owned the deck and reaped the revenue, and the hotelier leased spaces from them instead.

With that, discussion concluded and Wisler brought a motion forward that found that the development failed to meet all the city’s seven standards except for being appropriately located with regards to public safety and facilities. Young and Smith quickly seconded. Bothwell noted he “strongly agreed” about the negative impact on traffic and safety in the surrounding area.

Mayfield noted that she saw many positives to the development. But she still voted to deny. So did every other member of Council.

The next fight

Now Council is set to consider those long-awaited hotel restrictions at its next meeting on Feb. 14, meaning that the fight over hotels hasn’t gone away. While staff, back in September, didn’t support the hotel restrictions, they now recommend approval of the new rules.

Not everyone does. The Planning and Zoning commission, which currently has final approval over many hotel projects, voted against the changes 6-1, with several members noting that they didn’t believe the hotel boom was a problem at all.

That sets up a neat little political conflict, as Council specifically requested those rules, and it illustrates how — agree with them or not — the views of a major city committee are completely at odds with the vast majority of the public. Given that the debate those rules isn’t subject to the same constraints as the Embassy Suites hearing, expect a bit more fireworks this time. Maybe even some thunder.

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