Greensboro’s development game
The lawyer had stood before the Greensboro City Council and described his client’s business: a yard near the intersection of Holts Chapel Road and East Market Street set up to receive and sort construction waste – lumber scraps, concrete chunks and the like. The lawyer enumerated some conditions that would soften the impact to the neighborhood, including a buffer of Leland cypress trees along the eastern property line.
Tom Phillips, a council member who represents north Greensboro, questioned why such screening was necessary, prompting an intricate exchange among council members that drew in the city attorney and the planning director. They hashed out technical definitions for salvage yards and recycling centers, and revisited the city’s confusing mesh of decisions regarding whether Salvage America had been operating legally and why it now needed a special use permit to stay open.
Then residents of Heath, a well-kept African-American community of shaded streets that had been farmland before World War II and which now lies east of Salvage America’s mountain of construction debris, lined up to speak against their unwelcome neighbor.
Patricia Alexander of the Heath Community Umbrella Organization talked about Salvage America’s negative impact on neighborhood revitalization efforts. Her neighbor on Pine Street, Rose Murphy, spoke about dust causing problems for residents. Jerome Malloy, who lives in the tiny Camel Street community, complained that residents couldn’t sit outside because of the dust and some of them suffered from respiratory ailments.
“One of the things that is in our vision is to clean up our neighborhoods,” Alexander would later say as her grandson climbed in her lap and reached an arm around her neck. “We get up and clean up trash because a lot of our neighbors are sick and disabled or they just don’t care. The second thing is safety. We have gotten lights because we have some dark areas where people congregate.”
As Alexander sat at a dining table in the front room, her grandson unhinged his arm. He tried with difficulty to scoot a skateboard over the carpet and then found more success at another undertaking: swatting a rubber ball with plastic racket. Alexander’s front yard boasts a lush bed of grass and myriad flowers set off with paving stones.
About half a mile from her bucolic plot is Holts Chapel Road, an industrial corridor bereft of sidewalks. Salvage America draws at least half a dozen additional large trucks a day to a thoroughfare zoned heavy industrial; area residents without cars risk injury picking their way along the shoulder.
Alexander had put in a phone call herself to Mayor Pro Tem Sandra Anderson Groat, a builder whose offices are located on nearby Banner Avenue, to let her know the neighbors were mobilizing to oppose Salvage America.
At the July 2006 council meeting Goldie Wells, whose northeastern district encompasses the construction waste lot, introduced a substitute motion to deny the special use permit. Wells’ motion garnered support from Dianne Bellamy-Small, who represents neighboring District 1, and from Distict 5 representative Sandy Carmany.
With only three votes the effort to shut down Salvage America foundered. The five other council members present – Phillips, Groat, Mayor Keith Holliday, Yvonne Johnson and Mike Barber – voted to approve the special use permit.
The city’s planning staff had taken a markedly different view when the matter came before the Zoning Commission two months earlier. Minutes reflect that Planning Director Dick Hails told the commission there were at least 10 locations around the city designated for industrial corporate park uses.
“Some of those areas are very large and far from designated residential areas,” the minutes paraphrase Hails as saying. “As a result, staff does not believe that the finding can be made that this will not substantially injure the value of adjoining or abutting properties.” Staff recommended denial of the special use permit.
The city council vote caught Alexander off guard. Only two votes tipped the balance, and she vividly recalls which two votes she had counted on to fall in the residents’ column.
“Sandra Anderson is in this area and she had come to our National Night Out and to one of our meetings to ask for votes, and then when she voted she did not seem to feel that this neighborhood was important,” Alexander said. “She has built houses on Franklin Avenue. For her to expect people to buy houses from her and for her to not support the people….”
Like mayoral candidate Yvonne Johnson, Anderson Groat is one of the council’s three at-large members, not counting the current mayor.
“We would think that her and Yvonne Johnson would support us,” Alexander said. “Not because Yvonne is black but because she stays in this area.”
Salvage America had what could be considered a secret weapon in its campaign to stay on Holts Chapel Road. Arguing its case was Marc Isaacson, a lawyer who with his father handles the lion’s share of rezoning cases that come before the council. The Isaacson law firm contributed around $2,000 to sitting council members during the 2005 election cycle, dispensing $750, $500 and $700 respectively to the campaigns of Johnson, Anderson Groat and Barber.
The Isaacsons are known as pros in their chosen area of law: Since June 2005, they’ve won 25 out of the 26 land-use cases they’ve argued before city council.
YES! Weekly conducted a comprehensive review of all land-use decisions made by the city council from June 2005 through May 2007, which was cross checked against a list of all campaign contributions made to sitting council members over a two year period, generally in 2004 and 2005. The review found significant overlap, with real estate and development interests dominating campaign financing, individual members demonstrating a higher than usual rate of support for requests in which contributors had a financial stake, and generally showing enthusiasm for annexation and new construction on the city’s fringe.
The review found that 46 percent of campaign contributions to sitting Greensboro City Council members exceeding $100 came from real estate and development interests, with lawyers comprising the second largest sector. Almost half of the land-use decisions made by council members involved contributions from a developers seeking a favorable disposition, a lawyer arguing a case or a spouse of employee of one of the involved firms.
“I’ve never thought of this as any big secret,” Holliday said. “The people who are looking for good government because it affects their industries, that is the group that is somewhat more in tune with actions of local government than the general citizen that doesn’t connect unless they have an issue that comes up that directly affects them.”
Johnson, Anderson Groat and Barber have been reliable supporters of rezoning cases handled by the Isaacsons. Groat and Barber have voted with the Isaacsons with 100 percent reliability; Johnson voted only twice against rezoning requests argued by the Isaacsons.
The 74-year-old Henry Isaacson, a graduate of UNC-Chapel Hill’s law school who serves on the Piedmont Triad Airport Authority and the NC A&T University Board of Trustees, has been arguing rezoning cases since 1968. He makes no apologies for his participation in the political process.
“I don’t make them because I want to influence their decisions,” he said. “Me and my wife make campaign contributions because we want to encourage good candidates to run for office,” he said. “My one-hundred and two-hundred-dollar contributions I don’t think are going to make them change their votes.”
Presuming that votes are for sale would be selling elected officials short, Isaacson suggested.
“I think they are very intelligent people and I think they judge the case on how it’s presented, not who presents it,” he said. “Of course it’s important how it’s presented.”
The veteran lawyer said he doesn’t keep score of his track record. If he and his son have done well for themselves and their clients, it’s the result of hard work.
“What I think it is, is we do our homework, spend a lot of time preparing our cases,” he said. “And we don’t take every case that comes to us. A lot of property is not deserving of being rezoned to what the company or the individual wants it to be rezoned to. I wouldn’t take a case where someone wanted to put a salvage yard in the middle of downtown. That’s an extreme example.”
Johnson, whose 94 percent approval rate for projects pushed by political backers contrasts with an 84 percent overall approval rate for all land-use cases, adamantly insisted she does not let campaign contributions influence her votes.
“It doesn’t matter,” she said. “Is it good for Greensboro? That’s what I have to ask myself and pray about.”
Asked how she accounted for the variance in her rate of approval for land-use decisions when cases involving campaign contributors were culled from the field, she responded, “I think your statistics are limited; you need to look at the entire voting history.”
Johnson is not the only council member whose voting pattern showed a correlation with her list of political supporters. Anderson Groat’s rate of approval jumped 13 percent when campaign cash was on the table from developers, lawyers arguing cases, or employees and spouses tied to either sector.
Florence Gatten, an at-large representative who announced her retirement from the council earlier this month, demonstrated an aversion for requests argued by the Isaacsons by voting against them on five separate occasions. She’s had her own patron in the real-estate law community. She accepted a total of $2,950 from lawyers employed with the Brooks Pierce firm during the 2005 campaign cycle. Half of those funds came from her campaign manager, Reid Phillips, and his wife Anne.
After the Isaacsons, Brooks Pierce lawyer Derek Allen has appeared before the council the most times in the past two years to argue rezoning and annexation cases. The 35-year-old lawyer, who has been recognized by Business North Carolina magazine as a member of the state’s “legal elite,” attended UNC-Asheville on a tennis scholarship and graduated magna cum laude. The boyish lawyer has a pleasant rapport with council members, but can make a tough argument when the chips are down.
Gatten has only voted against a rezoning request argued by Allen on one occasion: On May 15 she voted with the majority to reject a project that would have replaced single-family homes in the Garden Lake neighborhood off New Garden Road with a cluster of condominiums and retail stores. The only other case that did not turn out favorably for the law firm was the successful effort to get the Cascade Saloon on South Elm Street designated as a historical landmark.
Gatten’s campaign manager, Reid Phillips, argued against the initiative for Norfolk-Southern Railway. The councilwoman cast one of only two dissenting votes in the decision.
“With Florence, she’s well respected among the members of our firm, and not just in our firm, but in all law firms, and not just with developers but people who care about the community,” Allen said. “Our firm, as big as it is, has people who are very involved in the community. Quite frankly, I don’t know who would have given the contributions.”
The constant refrain of real estate lawyers is that they only pick projects they believe in. Council members, in turn, are apt to say they vote strictly according to the merits of the project. From the perspective of business owner seeking a favorable disposition, however, money is often the price of admission to the political process. For elected officials, money can be a cause for regret down the road.
“I don’t know enough about it,” Johnson responded when she was asked about her vote on Salvage America’s special use permit. “Did I vote for that? There must have been some reasons at the time, but I don’t remember. I’d have to go back and look at it.”
If Johnson didn’t recall her vote, she was certainly aware of the ongoing controversy surrounding Salvage America.
Late in the city council’s most recent meeting on May 15, Wells noted that her constituents had recently complained that the company was not honoring the conditions to which it had agreed.
“They are dragging the process out,” Assistant City Manager Bob Morgan said. “We have fined them three times. We’re going to give them a deadline, and they must comply or we’ll take appropriate action to take away the permit.”
Johnson expressed displeasure about the situation.
“They gave us their word and we gave them an opportunity because they’re a business and they hire people, blah, blah, blah,” she said, stretching the last two syllables in exasperation. “And it’s been a night-mare.”
Chris Triolo would likely agree.
“When you get a letter saying you need to come into compliance or we’re going to shut you down it’s not a good feeling,” he said. “I have a lot of sleepless nights.”
With hair prematurely gray at the age of 32, Triolo is the father of an 8-month old girl, with a second child on the way. Wearing boots with the leather blown off the steel-toed tips and dirty blue jeans, the recycling center operator bolted around the modular office at Holts Chapel Road on a recent morning, rifling through a filing cabinet in search of legal documents.
A small placard on the cluttered wall of the modular office contained a droll message describing a tough if fatalistic worldview.
“I’ve been kicked, lied to, cussed at, swindled, taken advantage of, and laughed at,” it read, “but the only reason I hang around this crazy place is to see what happens next.”
Triolo recounted how he had opened his business after receiving a certificate of compliance from the Greensboro Building Inspection Office in May 2005, and how scarcely two months later the city’s Zoning Enforcement Division issued a notice of violation informing him that “salvage and scrap yards are not allowed in heavy industrial zoning without a special permit.”
Triolo’s headache du jour is the neighbors’ complaint that he has failed to meet the conditions of the special use permit. The first condition, wetting the debris after the trucks are tipped, is in effect. He had held off on two others – establishing a buffer of cypress trees and pouring a concrete drive – for fear that the city would reject his compliance plan and he would have to undo the work. Now, on May 22, the plan was approved, the 30-day clock was ticking, and Triolo said he had every intention of meeting the conditions and staying in business.
Running on a parallel track with Salvage America’s efforts to meet the city’s regulatory requirements, the company has filed a lawsuit against the city to try to reverse the Board of Adjustment’s decision to require a special use permit. It all hinges on whether Salvage America is a salvage yard (permit required) or a recycling center (permit not required).
After he received the order to get a special use permit or shut down, Triolo met with Jim Saintsing, the lawyer who closed the real estate deal for the lot. Saintsing referred him to Marc Isaacson who, in turn, would advise Triolo to meet with the neighboring residents and get in touch with Anderson Groat.
“This is my first venture in the political arena,” Triolo said. “I voted for George Bush, and my brother is going back to Iraq for the third time. If I could spin it all back to 2005, I would never have met Mr. Isaacson – he’s a good man. I hate politics, but I have to do it to run a successful business.”
The epithets tripped off his lips, and he made little effort to conceal his frustrations.
“As far as I’m concerned I got screwed,” he said, “considering the multiple thousands of dollars of Marc Isaacson’s fees I’ve had to pay.”
Later, he added: “I had to go get a lawyer just so I could stay alive.”
Since his introduction to Marc Isaacson, there had been no turning back on Triolo’s involvement in politics.
“I had the benefit of talking to Sandra Anderson,” he said. “It’s funny: I see her driving up and down this road every day because she works on Banner Avenue. She’s a big proponent of what we do.”
Since he began to interface with city government, Triolo has learned to read some of the decision-makers, particularly the three council members who voted against him.
“Sandy Carmany – she has DH Griffin in her district, so I think she knows the headaches it causes to the neighbors,” he said. “Goldie Wells and Dianne Bellamy-Small – I think they heard the neighbors’ complaints about the dust.”
Triolo’s business represents a tiny segment of the real estate and development sector. After all, with the city’s only landfill being slowly phased out, wood scraps from building projects have to go somewhere.
The real beneficiaries of city council land-use decisions are the developers who buy up land ripe for new investment or redevelopment, the builders who throw up new Harris Teeter grocery stores and town homes, the realtors who locate commercial tenants and homeowners, and the lawyers who facilitate a dizzying array of deals.
The vast majority of the real estate and development interests with a financial stake in council decisions live and work in Greensboro, which is not to say every part of Greensboro. The top three zip codes accounting for the most campaign contributions are 27408, 27410 and 27455. Nearly one in three campaign dollars received by sitting council members – and four out of seven received by Gatten – came from 27408, which encompasses the exclusive neighborhoods of Irving Park, Kirkwood and Buffalo Lake.
The rolls of campaign donors include prominent decision-makers and elites who not only circulate in the same social orbit but live side by side. For example, Jim Melvin, the former mayor who heads the Bryan Foundation, lives across the street from Replacements Limited CEO Robert Page; state Senator Kay Hagan resides on the same block as Kavanagh Homes president John Kavanagh.
The development game has its inside players, including former councilman Robbie Perkins, a realtor who is president of NAI Piedmont Triad, and former councilman Don Vaughan, whose law practice has found a steady stream of clients in neighborhood residents revolting against rezoning plans.
With the exception of Fairway Outdoor Advertising, a billboard company based in Augusta, Ga. that earns revenue from political advertising, the five largest sources of campaign funding to sitting council members are all tied in some way to building and real estate. They include the Brooks Pierce law firm; Southeast Properties of Chapel Hill; Pegram West, a Greensboro building supply company; and D. Stone Builders of Greensboro. Council members also regularly receive $500 contributions from the NC Realtors Political Action Committee, a statewide organization based in Greensboro, and the NC Homebuilders Association in Raleigh.
Developers who have received favorable zoning decisions matched by campaign contributions to sitting council members include Roy Carroll, Portrait Homes, Guilford County Commissioner Mike Winstead, D. Stone Builders, Kavanagh Homes, Joseph A. McKinney Jr. and Mark P. Reynolds. Every zoning requests made by these developers in the past two years has been approved by the council.
“You’re going to naturally see campaign contributions coming from people who are most affected by whatever level of government it is,” said Marlene Sanford, president of the Triad Real Estate & Building Industry Coalition. “The vast majority of what local government does is regulate real estate. That’s just natural. I’m proud of our people for participating in local government, whether it be making campaign contributions or serving on boards and commissions. More people ought to do it. Anybody can write a check. I do not apologize for an instant for people in the real estate business being involved in local government.”
Certainly not all developers are major donors. The only reported contributions from Carroll and Winstead were $100 donations to the Groat campaign. But almost without exception the same developers had land-use requests argued by either the Isaacson law firm or Brooks Pierce, which invested more substantial sums in the political process.
Though most renowned for the downtown Center Pointe project, which when completed will refashion the old Wachovia Building into a high-rise condominium and retail complex, Carroll is also responsible for a handful of development projects that are expanding the city’s geographic footprint in the northeast and southeast corners. The developer has at least two new projects in the pipeline. At its next meeting on June 11 the Zoning Commission is slated to consider an effort to carve out a multi-family residential project from corporate park beyond the airport and a rezoning proposal to transform agricultural land in the county into 50 single-family house lots.
Carroll initially agreed to an interview with YES! Weekly on condition that questions be strictly limited to development issues and not veer into the territory of campaign contributions, but a spokeswoman abruptly terminated a three-way conversation when it became clear that the story would delve into political subjects regardless of whether Carroll commented on those aspects.
“He just doesn’t have anything to speak on when it comes to campaign contributions,” Gillian Dickey said. “There’s no real connection. He’s happy to talk about development and making Greensboro better…. It’s not relevant to what he pursues. The concern overall is having any affiliation.”
Executives from the Koury Corp., the other developer contacted for this story, declined to return phone calls.
The galloping development on the city’s fringe coupled with lagging population growth and sluggish tax-base growth raises a question: Does sprawl suck the economic energy out of struggling inner-urban areas, drain city services such as police and fire, and saddle Greensboro with ever-widening concentric circles of gray fields and blight?
Snippets of comment from city council meetings and various formal reports provide half answers, but city planners and elected officials show little engagement with the problem.
Before stepping down as city manager in the summer of 2005, Ed Kitchen noted during his budget presentation that the tax growth rate had declined over the past three years. A tax increase would be necessary to sustain services. Stronger economic growth would be needed to enhance the tax base. Minutes also reflect that Kitchen proposed an expansion of the current annexation boundary line, and said that a bond issue would be necessary to pay for new fire stations to serve the expanded areas.
A review of city council minutes reveals that the city has annexed 791 acres since June 2005. To appreciate the significance, consider that Greensboro’s central business district covers only about 320 acres.
A running complaint among the leadership of the Greensboro Police Department has been lengthened response times as officers are stretched over an ever enlarging land mass. In January 2006 Greensboro Police Officers Association President Eddy Summers addressed the city council, noting that the recent annexation of the Reedy Fork area off US Highway 29 would increase calls. Staffing increases, he said, would “not fully accomplish the department’s response time goals.”
Council members took up that theme two months later when they considered an annexation request by developer Roy Carroll to absorb 50 acres at the intersection of McKnight Mill and Hines Chapel roads.
“Discussion was held with respect to the impact of limited police and fire capacity as criteria for establishing the level of support staff recommends in proposed annexations,” the minutes read.
Henry Isaacson argued the case. It passed unanimously.
Predictions that annexation would expand the tax base seem to have not been borne out. The “State of the City” report recently prepared for the Greensboro Partnership by UNCG professor Keith Debbage found that Greensboro’s tax base grew only 8 percent from 2000 to 2005, while Charlotte’s increased 28 percent over the same period. Coupled with public sector woes, Debbage noted the corresponding trend of wage rates lagging behind other North Carolina cities in every major industry.
Johnson, the at-large councilwoman running for mayor, indicated she sees no tension between the suburban fringe and urban core when it comes to residential and commercial development.
“You have to ask yourself, ‘Is Citibank hurting us or helping us?'” she said. “‘Is RF Micro hurting us or helping us?’ In both cases, I think they’re helping us. You have to look at providing opportunities and promoting business at the core and at the fringe.”
Phillips, whose district encompasses the newly annexed Reedy Fork area, also indicated he is not greatly concerned with development trends.
“If you’re doing it at a higher density, it’s not classified as sprawl,” he said. “I don’t know. Not everyone wants to live in closer to town. I think these annexations that we’ve done have not been bad.”
Some thinking among developers, planners and elected officials, to be fair, demonstrates a push to make Greensboro more livable, more walkable and less dependent on automobile transportation.
“Certainly Greensboro subscribed to the notion – and lots of other communities did too – that’s when planners would look at areas and try to put all the residential in one area, all the office space in one area, and all the movie theaters in one area,” said Allen, the Brooks Pierce lawyer. “You create these traffic nightmares because everyone’s going to one place at one time. I’m interested in mixed-use development, where you have the possibility of living within walking distance of a coffee shop or a sandwich shop. I think that is the way of the future. I don’t want to create anymore Wendovers.”
While typical projects championed by developers and planners stress density and often pair new residential areas with shopping centers typically anchored by a Harris Teeter grocery store, the developments are often self-contained and far from gray-field neighborhoods struggling from commercial flight.
“Affordable housing is being put on the margin of our city,” said Tonya Clinkscale, a construction project manager and licensed realtor who is a candidate for city council in District 1. “The people who use affordable housing have children without cars. I think it’s a dangerous trend. I think it’s going to take developers, city planners and the community to come together and talk.
“Our young people are going to need to be able to get jobs,” she added. “We need those young people to stay. Our communities need to be more self-contained. We need more stores. You can’t do that without addressing homelessness.”
It’s not that city leaders haven’t recognized the need to revitalize dying inner-ring areas like Cone Boulevard, Randleman Road, Phillips Avenue and High Point Road, where unused parking lots sprawl into the distance and bingo parlors and empty storefronts often anchor struggling shopping centers. To be fair, both fringe development and what’s termed “infill” are stated goals of the city’s planning document, Comprehensive Plan 2025.
“I think one reason developers prefer building on the city fringe is partly due to the ease with which it can be done,” city planning specialist Ben Woody wrote in an e-mailed comment. “Given that we have often already had city infrastructure in place on the fringe (roads, water, sewer), it is typically less expensive and easier to develop a green field (a large vacant, undeveloped site). When redeveloping inner-ring sites near the city core, developers will often encounter brown fields (polluted soils), aging infrastructure, oddly shaped parcels of land, and the expense of removing existing structures. Based on the above scenario, it’s pretty clear which situation would provide a quick return on an investment.
“From the city’s standpoint,” he added, “we fare better financially with infill development versus development on the fringe, as it places less burden on our existing resources.”
The city’s current development ordinance was adopted in 1992. It placed significant emphasis on segregating incompatible land uses, Woody explained.
“The city’s own development ordinance can be a hindrance to the redevelopment of properties,” he wrote. “Our current development ordinance is fairly suburban in nature, and as a result, occasionally its regulatory structure will act as a hindrance to infill development.”
When pressed, city planners acknowledge that fringe and infill development compete for investment. While incentives for infill development like relaxed parking requirements are floated, planners tend to caution against tampering too much with market forces.
Sanford, the Triad real estate and building industry’s chief spokesperson, conceded that infill better serves the city as a whole.
“Higher densities are generally going to be much more cost effective for public service,” she said. “The challenge has not been that we won’t propose higher densities. The challenge is that when we propose higher densities there’s a neighborhood revolt and the densities get negotiated down. It’s schizophrenic. You can’t be against both density and sprawl. You have to pick one.”
Almost by default, it seems, city planners and elected officials bring up the High Point Road-Lee Street Corridor Plan, a city-led initiative with business and citizen input that is in its beginning stages, when the question of what to do about the emptied-out inner-ring gray fields comes up. But where does that leave Randleman Road, North Church Street and Cone Boulevard?
“When retail locates they search for their sites based on the household income within a certain radius,” Sanford said. “When you get in an area like High Point Road, the incomes are in the rooftops in other areas. The incomes in the High Point Road area are not very high. Maybe it’s that incomes have declined; maybe they have not grown much. Then you have a challenge. When I was growing up, High Point Road, that was the glitzy strip; the mall was brand new. Now thirty years later there’s a lot of pawn shops and not a lot of new development. That’s kind of the natural cycle and the good news is that the cycle comes back around. The city has taken an interest in it.”
Maybe the poor are trapped within the market forces of real estate. But as the prosperity of downtown – half a percent of the city’s overall footprint – demonstrates, when the political and economic elites develop the collective will, they can make things happen.
“It makes me happy to look at Center City Park from my office,” said Allen, the lawyer at Brooks Pierce. “You talk about people who made contributions to Florence Gatten’s campaign. Those are the same people you’ll see that gave money to that park. That’s important. When we’re out there talking about quality of life issues it’s very abstract. Center City Park matters. The ease of getting around matters. Developers with good creative ideas do that with the help of lawyers.”
Then he mentioned a developer who, incidentally, may be the only viable challenger against Yvonne Johnson should he decide to run for mayor.
“Take people like Milton Kern,” Allen said. “Ten years ago downtown was dead. Guys like Milton Kern hanging it out there. Everybody says, ‘Wow, look at how downtown has changed.’ Developers did that.”
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