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Showdown on building looms before GSO council

by Jordan Green

Three controversial rezoning cases to be considered by the Greensboro City Council on Feb. 5 will test the legislative body’s stance on high-density residential development near the new urban loop, as the city contends with a softened housing market that local officials and builders hope will be offset by a job boom over the horizon.

The influence of developers in land-use decisions – reflected in developers sitting on city and county government boards and funding political campaigns – has given rise to fatalism and anger among some opponents who see themselves as outflanked by a web of politically-connected players. Some opponents have also cited an ongoing drought and strained municipal resources as reasons council should take a more cautious approach with development.

Meanwhile, with home sales flagging, some developers are trying to pack more units per acre into building sites to keep sale prices down and profits up, while favoring relatively cheap land at the city fringe to available sites closer to the city center.

Hearings for two of the developments – a planned gated apartment complex east of the city proper on Business 85/Interstate 40 that is proposed by developer Roy Carroll and a condominium project underway on West Wendover Avenue – were continued from council’s Jan. 15 meeting at the request of the applicants. A third rezoning decision that would allow 228 apartment units to be built on 13 acres of land on West Friendly Avenue ended in a stalemate in January and had to be bumped up to the next meeting.

Only three council members, including Mayor Yvonne Johnson, voted against the rezoning, but the four affirmative votes were not enough to carry the day. One council member, lawyer Mike Barber, had to abstain from the vote because of a direct or indirect financial interest. Another, developer Robbie Perkins, missed the vote because of an injury. Five votes are needed to approve the rezoning request. The city’s legal department is reviewing an inquiry as to whether Perkins, who is president of the real estate company NAI Piedmont Triad, also has a direct or indirect conflict of interest.

Councilman Zack Matheny, who voted in favor of rezoning the property, received campaign contributions of $1,000 each in the last election cycle from Mike Winstead Jr. and Joseph McKinney Jr. of Mega Builders, the company proposing to develop the property. Councilwoman Trudy Wade, who also cast a favorable vote, received a $500 contribution from Winstead, while Johnson received $1,000 from McKinney.

While the legal department decides whether Perkins, like Barber, should step aside in his role as an elected official in this case, the private citizens pleading for council support have political roles of their own.

Linda Shaw and Bob Shaw, who hope to sell their property, are prominent local Republican Party leaders. Linda Shaw is a member of the Guilford County Commission. Her husband is a former Republican minority leader of the NC Senate. Winstead, the Mega Builders partner, is also a Republican county commissioner.

Another potential seller is First Baptist Church, which plans to give the proceeds to its Korean congregation to bankroll construction of a new church.

Robert Kirnard, a New York transplant whose property in the Hillside Homes neighborhood abuts the area slated for redevelopment, noted the influence of the real estate and development sector on the Greensboro City Council.

“Where I come from, they consider this the wolves guarding the henhouse,” he said. “Here, a lot of ’em have their own development companies.” Later, he added, “It’s all because Bob Shaw is a retired state senator. Linda Shaw is a county commissioner. Mike Winstead is a county commissioner. It’s like, ‘We’ve got this one in the bag.'”

City planning reports note the “possibility of wetlands on the site,” which features a pond slated to be reduced in size to make room for the apartment buildings. Kirnard said he is certain the site should be considered a wetlands area. Evidence of that, he says, is an 84-foot pier sunk under the foundation of a second house he owns on the western perimeter of the site proposed for rezoning. Kirnard said representatives of Mega Builders seemed surprised to learn of the wetlands. The city does not make a site visit to ascertain whether there are indeed wetlands, but instead notes the possibility and advises the developer to fill out the proper permits with the state, said Virginia Spillman, who works in the city’s storm water division. Robert Shaw disavowed knowledge of any wetlands on his or his neighbors’ property.

Kirnard said the Shaws, who operated the Friendly Avenue Inn fish restaurant until 2006, have been offered $1.2 million for their property, while First Baptist Church would receive $800,000. Robert Shaw declined to discuss any monetary amount, but church business administrator Tom Smith confirmed the latter amount.

Mike Winstead Jr. said rental apartments make the most sense for the site, which will be just inside the new urban loop and give residents easy access to a burgeoning job cluster blooming around Piedmont Triad International Airport and a proposed bicycle and pedestrian path. He noted that the project fits the city’s comprehensive plan for development; he might have added that the city’s planning staff has officially expressed its support.

Meanwhile an aborted plan to develop an adjacent parcel of land has fueled suspicions among neighboring residents that politically connected proponents of redevelopment are maneuvering behind the scenes to pull off a fait accompli. Two inquiries on property owned by Scott and Lynn Brogan, both significantly lower than their original asking price, have convinced the couple and their neighbors that the proposed West Friendly Apartments would devalue their property. Even more galling, Lynn Brogan said, the inquiries – at least one of which appears to be politically connected – bandied figures substantially below their asking price after it became known that apartments were slated for the Shaw and First Baptist Church properties.

“We have lost so much sleep over this,” Lynn Brogan said. She said she and her husband had signed a contract with Michael P. Winstead Sr., the county commissioner’s father, to develop their property. The elder Winstead confirmed in an e-mail message Monday that his son was also involved in the project.

Winstead Sr. “presented it that they were going to do two-story town homes like the ones up at Morgan Ashley,” Brogan said. “I believe they were starting at $160,000. He said that he knew what was required to appease the neighbors with buffers and all because they had just done that at Morgan Ashley. Very similar to ours. Great. Okay. Fine.”

Then, in August, the Brogans’ realtor, Alan Wolf of Yost & Little, received an e-mail message from the elder Winstead disclosing that neighbors had balked when he tried to add another floor to the development. Winstead Sr. wrote that he “met with about 15 of the neighbors a couple weeks ago and they made it very clear that they will not support any rezoning that would allow 3-story condos on the subject site. With the possibility of what might be developed on the property east of the site any town-house project on the subject site would be a significant investment risk. I am discontinuing my efforts to develop the subject property effective immediately.”

The elder Winstead said the current slump in the housing market makes it more difficult to sell town houses located next to apartments. He added that he has no financial interest in the Mega Builders project, but the timing of his withdrawal raised suspicions with Lynn Brogan.

“They set up the market to devalue our property, to make it not worth the price we were asking,” she said. “That goes to prove the neighborhood group’s point that that type of development is going to devalue the property next door.”

Later, after it became known that the Shaws planned to put their property up for sale, Lynn Brogan said the couple learned through their agent that an unidentified potential buyer had made an inquiry about their property.

“They had reevaluated our property and found that our asking price was $125,000 over the market value,” she said. “My agent told them to go to hell. I said, ‘You were polite. I would have said a lot worse.'”

Despite staff support for the project, the Greensboro Zoning Commission denied the request to rezone the Shaw and First Baptist Church properties in a 5-4 decision in early December.

The Brogans say a second inquiry about their propert was made sometime after the zoning commission turned down the request, but they could not say whether it was before or after the decision was appealed to city council. They later learned that the offer was made by an agent of NAI Piedmont Triad. At the time, Lynn Brogan said, she and her husband did not know that Councilman Robbie Perkins was the president of NAI Piedmont Triad.

“My inference is I find it hard to believe that this offer was made without Mr. Perkins knowing about it since this was already in process for zoning,” she said. “The first thing developers do is look at what’s going on with the surrounding properties. Given the amount of the offer, to me, that would say they might suspect that they could get our property for a significantly lower price.”

Perkins and the younger Winstead bumped into each other after a community meeting held at Mendenhall Middle School on Jan. 22. Perkins said then that he had no financial interest in the West Friendly Apartments project, and planned to vote on the matter at the next meeting. As a general rule, he said he does not anticipate that the slump in the housing market or the drought will compel council members to put the brakes on high-density development at the city’s fringe.

“We’re preparing for what’s coming,” he said. “In twenty-four months, FedEx will be coming online. We better have some places for people to live. I have a high level of confidence that the economy will turn around in two years.”

He added, “The statistics do not project that we will be overbuilt. We want to build multifamily housing close to where you work and where you play. The apartment product is the number-one investment product right now.”

Later, when informed that the Brogans had received an inquiry from an agent of NAI Piedmont Triad and that the couple had requested that the city’s legal department look into whether the Perkins might have a direct or indirect financial interest, the councilman said that although he owns 50 percent of the company, its agents operate independently.

“Before I talked to you, I didn’t even know our guys were out there,” Perkins said. “I don’t have any more control of what they make an offer on than I do you. If they were making an offer on behalf of a client of ours then I would know, but I don’t think that’s the case.”

The councilman suggested that without having prior knowledge of the offer and in the absence of a signed contract on the adjoining property, there was no reason to abstain from the West Friendly Apartments vote.

“We’ve got listings down the street, we’ve got listings up the street,” he said. “That area is an industrial area and we’re a commercial real estate company. It’s near the airport. If we didn’t have property listed on that street we may as well go out of business.”

Deputy City Attorney Becky Jo Peterson-Buie said an opinion about whether Perkins should abstain from the vote would be rendered before Feb. 5. She declined to say why the legal department determined that Barber has a direct or indirect financial interest in the matter, citing attorney-client privilege. The councilman did not respond to several inquiries from YES! Weekly.

With the housing market shifting from home sales to apartment rentals, developers have been forced to cut costs to make condominiums and townhouses more affordable. The younger Winstead indicated that declining demand from homebuyers was more operative in his father’s decision to withdraw plans to develop the Brogan property than anything to do with the property owned by the Shaws and First Baptist Church. Winstead noted that only one of 11 units of the nearby Turlington townhouses developed by Mega Builders had been sold.

Condominium construction on a noncontiguous parcel on West Wendover Avenue inside the new urban loop has run up against similar challenges related to dampening buyer demand and fixed overhead cost. With construction already underway, developer SRJ Properties requested that the six-acre parcel be rezoned to allow an additional 16 units and to raise the height of as many as four of the buildings from three to four stories.

Addressing the zoning commission last December, the lawyer representing SRJ Properties invoked a market reality well understood by at least one of the commissioners, realtor Paul Gilmer.

“As many of you know, the mortgage market has tightened up considerably,” Marc Isaacson said. “Mr. Gilmer and I were at a luncheon with the realtors association some time ago, so I want to be careful because I don’t want to perpetuate the problem that the media has been saying too much about the mortgage problems, but frankly the developer is trying to adapt to the market situation.”

To keep the condo units in an affordable $79,000-$99,000 range, SRJ Properties would have to add 16 units, Isaacson said.

“They have certain fixed costs in developing a condominium community such as this,” he said. “And if they can spread out those fixed costs by 16 additional units then they can keep the price more affordable and keep these units being marketed successfully. Things have slowed down and they’re looking to adapt to what’s going on with the marketplace, particularly in the mortgage market.”

In recommending denial, planning staff indicated that the requested RM-16 classification was a poor fit for the area, noting that it “is the highest density residential district in the city and is generally intended for more urban areas such as the downtown area that encourage taller buildings that are easily accessible to pedestrians and vehicles alike. This site, located on the city’s western fringe, does not have such a logical connection.”

The nine-member zoning commission voted unanimously against the request, with some members commenting that approving four stories could set a bad precedent, but one commissioner indicated he might side with the developers in the future.

“The market has changed,” Gilmer said. “We are going to have to be open-minded in the future. Whether we like it or not, developers bring a lot to the table and create a lot of jobs and everything else, and the market is drying up.”

Marcus Reed, whose property on Brewster Drive abuts the condominium site, said SRJ Properties has proposed adding a plant buffer to block out noise and light. That has relieved most of his concerns, but his neighbors may not be so easily placated. Reed added that he believes the area’s transformation from residential to commercial is inevitable, much as the intersection of Wendover Avenue and Interstate 40 did so 25 years ago.

Matheny said on Jan. 25 that he had not studied the West Wendover Avenue project, but that thought requests for high-density development on the city’s fringe should be considered on a case-by-case basis. Matheny received $500 each from Scott Bayer and Rani Hussami, two of the partners in the project, in the last election cycle. Other council members contacted for this story, as is typical, said they had not made up their minds about the impending vote.

Alongside NAI Piedmont Triad’s Robbie Perkins and Mega Builders’ Mike Winstead, another prominent Greensboro developer – who unlike his colleagues, does not hold elected office – has argued that high-density development at the city’s fringe makes sense because renters of modest means should be able to live in close proximity to where new jobs are likely to be created.

Immington Village, a gated apartment complex proposed by developer Roy Carroll, would include as many as 310 units, a swimming pool, a laundry facility, an exercise/fitness facility, a clubhouse theater and a cyber café. The 30-acre parcel lies along Business 85/Interstate 40 just inside the new urban loop on a geographical island separated from the city’s eastern boundary by almost two miles of farmland and property zoned for corporate office park that was annexed last November.

Joel Landau, a member of the Greensboro Planning Board, said he cast the lone vote against annexing the property, although documents prepared for the city council reflect that the board unanimously approved the annexation.

“I said [to the other members that] it’s too far out, that it’s spreading out too far from the city center and encouraging people to drive further at a time when we need to reduce fossil-fuel usage,” Landau said. “The argument of the developer was that it could reduce driving by providing housing, that we’re going to have people working in this area. I could see that if they were going to restrict the housing to people that were going to work there, but in practice that’s not going to happen.”

Landau said he also viewed with skepticism a finding by city staff that the police department could “provide service with a low difficulty” despite the need to add two more officers.

“Personally, I feel that since the police force is so overextended that it’s a reason to not put any extra stress on police response time,” he said. “It’s taking a bad situation and making it that much worse.”

For other reasons, the city’s planning staff recommended against rezoning the property from a mixed-use corporate park to a high residential classification, contending that “the proposal does not promote orderly growth on the city’s fringe” because the development “is not located in relative proximity to jobs and services that would allow for pedestrian connections or public transit options.”

Lawyer Henry Isaacson, speaking on behalf of the developer and owner before the zoning commission last December, contested that finding.

“Ladies and gentleman, we are proposing three hundred apartments a five-and-a-half minute walk from eight hundred jobs, not to mention the other jobs a short drive away,” said the courtly lawyer, who is the father of Marc Isaacson. “And there’s already bus service on McConnell Road because I followed the bus back into town last Saturday from this site.” He acknowledged that bus service does not currently extend all the way down McConnell Road to the interstate, but argued that the opening of the Millennium Campus at the NC A&T University farm on East Lee Street might hasten that eventuality.

Opponents advanced a variety of arguments against the planned apartment complex, citing noise from the interstate and the smell of animal manure that kicks up when the wind blows in the right direction. Many of the farms are registered with the state’s Voluntary Agricultural District Program, which protects them against complaints from new residents.

“Smart-growth candidates and contractors feel the need to reflect a sense among urban and suburban voters that given rising fuel prices, global warming and problems with the water supply, growth is going to have to happen differently in the future,” Donna Bonds, a Kernersville resident with cousins in the area of the proposed Immington Village, told the zoning commission. “Smart-growth citizens want revitalization and green building within city centers prior to the development of outlying corporate-housing sprawl.”

Many of the rural residents, including Barbara Starr, an elderly woman who lives on nearby Young’s Mill Road, greeted with salty skepticism the developer’s argument that the new apartment dwellers would be able to walk to work and other destinations.

“Eventually there may be something where they can walk to work, but right now there is nothing,” she said. “We drive to work. We drive to get groceries. We drive to go out to eat. We drive for anything we want to do other than sitting at home watching the grass grow. Which is fine with me.”

Despite opposition from neighboring residents and from planning staff, the zoning commission voted unanimously to approve the rezoning. The decision must be ratified by city council since it requires amending the comprehensive plan for development, and the council must also consider the planning board’s recommendation for annexation. A political action committee set up by Roy Carroll and his wife, Vanessa, called North Carolinians for Leadership in Government distributed $1,000 campaign contributions to six current council members about three weeks before the November election. Recipients include Mayor Yvonne Johnson, Mayor Pro Tem Sandra Anderson Groat, at-large Councilman Robbie Perkins, District 1 Councilwoman Dianne Bellamy-Small, District 3 Councilman Zack Matheny and District 5 Councilwoman Trudy Wade.

Planning Director Dick Hails said staff would prefer to see new jobs come to the area first, followed by residential development. Voters approved a $10 million economic development bond in 2006 that boosters argued was necessary to help prepare large, construction-ready sites that could accommodate large employers. The Generalized Future Land Use Map shows a wide swath of mixed-use corporate office park between Ward Road on the city’s eastern perimeter and the new urban loop.

“Just as there’s been substantial job creation in the western portion of the city, particularly out around the airport, we have areas set aside in the eastern and southern part of the city also to encourage balanced growth,” Hails said. “There’s not currently a huge demand for corporate-park and office development. I think in response to that we’ve really tried to take a hard look at what are the highest priority areas and to try to preserve this for future development.”

Barbara Starr put it another way.

“After we bring all these people in, we have to turn around and pay incentives, horrendous incentives, to bring the businesses in so that they can have jobs,” she said. “I don’t think there are many people hiring in that area. We have a curb market – we have two curb markets – a service station, an auto-body repair shop, and I don’t think we need three hundred and ten units to serve them.”

To comment on this story, e-mail Jordan Green at jordan@yesweekly.com.

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