MINUTES BOARD OF ALDERMEN NOVEMBER 9, 2017

Mayor Blair called the meeting to order at 5:30 p.m. in the Council Chambers of Town Hall.

Attendance: Mayor William J. Blair III, Mayor Pro Tem Darryl Mills, Alderman Elizabeth King, Alderman Henry E. Miller III, and Alderman Lisa Weeks; together with Town Attorney John C. Wessell III, Town Manager Timothy W. Owens and Town Clerk Sylvia J. Holleman.

Pledge of Allegiance

Invocation by Pastor John McIntyre, Wrightsville Beach Baptist Church.

PUBLIC COMMENTS: SUE BULLUCK FOR THE CHAMBER OF COMMERCE.

On behalf of the Wrightsville Beach Chamber of Commerce, Ms. Sue Bulluck thanked the Board members and everyone who attended the oyster roast. She said they had a good turnout and raised about $5,000 of which a quarter will go to the school. She referenced the recent election and congratulated the incumbents and the new Board member. She said, “I represent the Chamber. I represent those folks who are calling themselves the commercial entities of our Town. This year is a first for us because commerce, as a commercial entity, for the first time is considered within our cost effective ratio. So, we are on a different plane. It used to be the first two rows of houses along the beach and whatever the recreation benefit was. That is no longer the case; we’re under a new formula. Yes, the residential is the most important and keeping it and having our way of life is what we are about. But we have to be protective and we have to look toward our commerce and our business now in a new way. For that I thank you. For those of you, who attended the forum, all of you committed yourselves to maintaining our commerce and we appreciate that.”

CONSENT AGENDA APPROVED UNANIMOUSLY BY MOTION OF ALDERMAN WEEKS AND SECOND BY MAYOR PRO TEM MILLS.

a. Approved August 10, 2017 Recycling Workshop Minutes and Regular and Closed Session Minutes; and September 14, 2017 Regular and Closed Session Minutes.

b. Acknowledged previously approved special events for December.

c. Acknowledged departmental quarterly reports covering the months of July, August and September, 2017.

d. Approved request from the Wrightsville Beach Museum to continue the “Loop through History” Event.

e. Adopted Resolution No. (2017) 2046 approving a Contract with Conduent Government Systems, LLC for information technology hosting and support services in the Fire Department. Once complete, allow the Town Manager to execute the contract to renew a five-year contract for the Fire House Software (Conduent).

f. Approved revised 2017 Board of Adjustment Meeting Schedule to cancel the November 16th meeting. MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 2

PRESENTATION OF FY2015-2016 AUDIT REPORT BY MARCIE SPIVEY, CPA, MARTIN STARNES AND ASSOCIATES.

Ms. Marcie Spivey, CPA with Martin Starnes and Associates, presented the following FY2016-2017 Audit Report: 1) The Town received an unmodified opinion which means we did not have anything that we saw that would make us say the financial statements had any material misstatement. 2) Ad valorem taxes; the collection rate is very good. 3) Audit process regulations are changing every year and now require more back and forth with your auditor; so it is a year-round process. 4) Your committed items are future debt payments and capital outlay. 5) Total fund balance increased about $1.4 million. 6) If you have receivables, we have to say that is a hold on your money. 7) Ad valorem taxes went up about $3,000. 8) Sales and services had about a $300,000 increase – almost entirely due to the parking meter fee increase. 9) Unrestricted Intergovernmental increased about $180,000 in part due to the ABC distribution. 10) Expenditures stayed pretty much the same as last year; public safety was the largest portion. 11) One standout was about $200,000 in Public Works Maintenance. 12) There was an increase in Public Safety of about half a million dollars. 13) Environmental protection decreased due to less capital outlay. 14) In Water & Sewer, the operating revenue went up about $400,000 due to a planned maintenance fee increase. Ms. Spivey said, “One big change next year is the Government Accounting Standards Board passed GASB 73. This affects your OPEB (Other Post Employment Benefits) and that will affect your enterprise funds. It will be based on the interest rates at the time of your actuarial study. The study that you are having in the current year will be affecting your statements next year. I just wanted you to be aware that that could be a big change for next year.” The Board thanked Ms. Spivey for the presentation.

ACCEPTANCE OF DONATION OF $2,107.32 FROM THE WRIGHTSVILLE BEACH FOUNDATION IN HONOR OF ALDERMAN LISA WEEKS FOR THE INSTALLATION OF A BIKE RACK FOR THOSE RIDING BICYCLES TO COUNCIL CHAMBERS OR THE RECREATION CENTER; AND ADOPTION OF BUDGET ORDINANCE NO. (2017) 464-B TO RECOGNIZE THE DONATION.

Program Supervisor Katie Ryan stated that the Wrightsville Beach Foundation would like to donate a bike rack to the Town to honor Alderman Weeks for her service to the Town. She then recognized Jim Smith, President of the Wrightsville Beach Foundation, to explain the project. Mr. Jim Smith said, “We do not have a bike rack here and we wanted to honor Alderman Weeks and do something unique. Our board voted unanimously on this design. Alderman Weeks has been a champion of the park division and of the Foundation; she was one of the founders of the Foundation. She began the “Taste of Wrightsville Beach” that just donated $8,200 to the “Weekend Meals on Wheels. Also, the “Taste” brings the Town businesses together to show off their goods. It is a great fundraising organization that is a lot of fun for everybody in Town. She also started the Farmers Market. Alderman Weeks has served on the Board of Aldermen for two four-year terms. She has never wavered in her efforts and we are honored to have had her to work with. This is a special bike rack. Tim Owens and Katie Ryan have suggested the location to the right of the entryway and, I think, Tim will have Evan do some landscaping there. It will have the Wrightsville Beach logo on it and it will all be done in vinyl so it will last for a long time to come. Thank you, Lisa, for all you have done for the Town; we really appreciate it.” Alderman Miller then made the motion to adopt Budget Ordinance No. (2017) 464-B to recognize the donation. The motion was seconded by Mayor Pro Tem Mills and unanimously approved. MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 3

PUBLIC HEARING TO CONSIDER A TEXT AMENDMENT TO CHAPTER 155 TO CREATE A SMALL PARKING LOT EXCEPTION FOR THE C-3 ZONING DISTRICT.

Planning Director Tony Wilson reviewed the following background information: “On Sept. 5, 2017 the Planning Department received a text amendment application from Authorized Agent Faison Sutton and petitioners NSJBS, LLC and Isabella Holding Company, LLC requesting a zoning text amendment to create a small parking lot exception in the C-3 Commercial District. The Town’s existing parking lot ordinance does not allow for this type of use, so exceptions are needed for a small commercial parking lot. If approved, the amendment would allow small parking lots on lots up to 12,000 square feet and must be adjacent to an existing C-3 business. The C-3 Commercial Districts are located at the Marina Street area, Causeway Drive, Seapath Marina/Parking Lot, The Landing, and the old Scotchman site located on Salisbury Street. There were no comments from the Police Department or the Fire Department. The Public Works Department looked to see if it meets storm water requirements. It is consistent with the CAMA Land Use Plan. It went to the Planning Board on October 3rd and the members voted unanimously to forward a favorable recommendation to the Board of Aldermen for the proposed text amendment. Staff recommends that the Board of Aldermen consider Ordinance No. (2017) 1770 and the associated statement of consistency. We will open this public hearing but we will not vote on it at this time. Then we will go to the conditional use permit public hearing and come back to this text amendment if you choose to do so.”

Authorized Agent Faison Sutton stated that she was an attorney representing the owners of 212 and 216 Causeway Drive as well as the owners of Poe’s Tavern. She said, “We will refer to 212 Causeway Drive as the Poe’s site and 216 Causeway Drive as the MOI site. My clients are all in favor of the proposed text amendment that creates the small parking lot exemption. The text amendment will benefit businesses in that C-3 Commercial District by allowing them to provide off-street parking to serve their customers. Businesses that are able to provide adequate parking will be more successful and will ultimately improve the Town’s revenue base. We have worked with your Planning staff as well as the Town Attorney for the text amendment and we agree with the final version that is being presented to you tonight.”

Mayor Blair opened the public hearing for the text amendment at 5:59 p.m.

Ms. Sue Bulluck, representing the Wrightsville Beach Chamber of Commerce, said, “I am not sure how I feel about the process of text amendments to make changes in our ordinances but I am in favor of the design and reutilization of these pieces of property over on Old Causeway. It will promote commercial development there and it will help facilitate the businesses that are there and that will generate more revenue in the commercial sector. So, I stand here for the Chamber and personally to say I think this is a good idea.”

With no further input from the public, Mayor Blair closed the public hearing at 6:01 p.m.

Mayor Pro Tem Mills asked how this was different from the parking lots that already exist for some of our business district.

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Mr. Owens replied, “I didn’t compare it to any of our existing parking lots. They have improved one condition there; they are still backing in the right of way but it is now on private property. They will meet all storm water ordinances. Some of the changes that have been made were mainly setback requirements – buffering requirements. Some of those things were relaxed. You have small confined lots next to existing businesses and in this case, they want to provide their own parking for their customers. I am not sure you will have a lot more of these given the price of land. Just for clarification, I think the next process is – you have closed the public hearing and Tony will now go into the conditional use permit part of it and you will come back and vote on the text amendment and then vote on the conditional use permit part.”

PUBLIC HEARING TO CONSIDER A CONDITIONAL USE PERMIT FOR POE’S TAVERN, LOCATED AT 212-216 CAUSEWAY DRIVE TO CREATE A SMALL PARKING LOT.

Mayor Blair administered the oath to those wishing to address the subject.

Mr. Wilson reviewed the following background information: “This is for a conditional use permit. The property address is 212-216 Old Causeway Drive. The property is zoned C-3 Commercial. The petitioner is requesting to demolish the existing one-story MOI building and turn it into a small parking lot for Poe’s customers. There are twelve existing parking spaces on lots 51 and 52; and twenty-four parking spaces will be added in this small parking lot. When completed, Poe’s will have a total of fifty-seven parking spaces on site, if this gets approved. On September 5th, our department received a conditional use permit application from Faison Sutton, authorized agent for NSJBS, LLC and Isabella Holding Company LLC. The applicant is requesting to create a small parking lot on lots 51 and 52 on Old Causeway Drive. The property is located in the C-3 commercial district and consists of five parcels; lots 51, 52, 53, 54 and 55. The existing 4,300 square-foot one-story building was built in 1956 and was the former location of the MOI Restaurant. The current use of the property on lots 51 and 52 is just a vacant structure that has been vacant for more than ten years. The parking calculations for Poe’s Tavern from the original conditional use permit; they were supposed to have seventy parking spaces. There was a parking exception that was granted by the Board of Aldermen in 2014 for fifty parking spaces. Staff feels it is consistent with CAMA Land Use Plan Policy 9.1.A.5. Public Works commented that the existing dumpster would be required to meet Section 95.20 for screening of solid waste containers. This went to the Planning Board on October 3rd and the members voted unanimously to forward a favorable recommendation to the Board of Aldermen. The spaces on the street will now be mostly on their property instead of about three feet on the Town’s property. We will have some vegetation around it. Planning staff would like for the Board to consider the conditional use permit for this small parking lot located at 212-216 Old Causeway Drive and consider staff’s comments. Since they are adding the parking, staff does not feel they will need the fifty parking spaces in the exception and it should be reduced from fifty to thirteen. We would ask the applicant to combine lots 51, 52, 53, 54 and 55 into one parcel. Right now, it is five parcels. They will upgrade the existing dumpster. We added two tonight and I made them aware. We had some questions about bike racks and the availability so we are requesting that they install some more bike racks. Then, this would be used for Poe’s customers only and cannot be used as a paid commercial parking lot. This MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 5 did go to the Planning Board and the Planning Board did not agree with conditions one or two. Staff still has those up their but they did not support the first two conditions. This conditional use permit is tied to Poe’s building only and then we have other parcels that we are now tying to the conditional use permit. That is one reason why we are asking for those parcels to be combined. Staff recommends that the Board of Aldermen consider this request.”

Mayor Pro Tem Mills asked what the advantage was of number two to the Planning staff. Mr. Wilson replied, “Again, it would be that the original conditional use permit is tied to one piece of parcel – Poe’s building. Now, we are tying it to other parcels and the staff feels like those should be combined. Typically, they are combined.”

Alderman Weeks asked, “If there is future interest in building a commercial property on the parking lot, they would have to unbundle that back and go back and get a parking exception again?” Mr. Wilson replied, “Yes. They would have to get it approved.” Mr. Wessell said, “You are effectively creating one conditional use permit to encompass all of this use. So, if anybody wants to change that use in the future, they have to come back to the Board of Aldermen in order to do that. One of the reasons for combining the lots is, if this was a vacant lot and there were five vacant lots there and somebody wanted to build this project on those five vacant lots, the Town would require them to combine those lots before they built it. Otherwise, you are not going to be able to figure out where the setbacks are; you are not going to be able to figure out what the square footages are, and things of that nature.” Alderman Weeks said, “A building is a little bit different than a parking lot, though.” Mr. Wessell replied, “I will give you an example of the problem that you might run into. If they wanted to expand the existing Poe’s building and these lots are not combined, I do not know where the setbacks are measured from. Do you measure them from the lot that Poe’s sits on? Do you measure them from the lot where the parking lot is? From a regulatory standpoint, it would be easier for the Town to deal with.”

Mayor Blair said, “Wouldn’t they be subject to additional parking requirements? If they went to do what you said, there would be other conditions that would have to be set – new conditions to change that conditional use permit.” Mr. Wessell replied, “They would have to change the conditional use permit in any case, yes.” Mayor Blair asked if it would have to still follow the same process, regardless. Mr. Wessell replied, “It would have to, yes.” Alderman Weeks said, “Would it make sense, maybe, to join the lot numbers just in the parking lot as one parcel?” Mr. Wessell replied, “It is not the end of the world if it stays like it is but, to me, the logical thing is to combine them. It is one project. If it was from start to scratch, it would be one lot, so it makes sense to combine them. I am a little unclear as to what advantage a developer gets from leaving the lots individual lots.”

Alderman Miller said, “The logical thing would be if they decided, for some reason, to sell a lot.” Mr. Wessell said, “But they cannot do that; they have a conditional use permit that applies to all of it. They just can’t whack a lot off and get rid of the parking that is required under the conditional use permit. That is what they are doing tonight; they are creating parking that goes with this project, so they can’t just unilaterally make the parking go away.” MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 6

Alderman Miller said, “They could if they just come back up here.” Mr. Wessell replied, “That’s right. They would have to come back in and get the conditional use permit amended in some fashion to get rid of the parking lot if that is what somebody wanted to do.” Alderman Miller said they would have to come back to the Board regardless of what they do in the future. Mr. Wessell said he would agree that either way they would have to come back.

Mayor Blair opened the public hearing at 6:13 p.m.

Authorized Agent Faison Sutton stated that she was representing the owners of 212 and 216 Causeway Drive as well as the owners of Poe’s Tavern. She said, “Three years ago, I was here with this Board and we were requesting your approval of a conditional use permit to allow us to open and operate the new Poe’s Tavern and Restaurant. That conditional use permit was obviously granted and it included the parking exception for fifty of the required seventy parking spaces. However, since Poe’s opened in 2015, it has quickly become a very popular restaurant at the beach for both locals and tourists alike. This popularity has caused the limited parking situation to become a critical issue. Over the past two years, the owners of Poe’s have worked in good faith with the Town and also the neighbors to consider different options for addressing this parking issue. The owners of Poe’s firmly believe in being a good corporate citizen and they have tried several different ways to alleviate the parking problem. Ultimately, they decided that the only way to adequately resolve the parking problem is going to be to build this small commercial parking lot. So, if this conditional use permit and the text amendment are both approved tonight, the owners of Poe’s are going to be making a substantial investment by purchasing the MOI site and the Poe’s site and then converting the MOI site into this small parking lot to serve its customers.” Ms. Sutton distributed copies of a rendering of the proposed parking lot to the Board and then continued. “We have already described in our conditional use permit application how the proposed conditional use will satisfy the standards that are required by law and I ask that you enter those details into the record. In addition to the standards that are in our application, we also believe that the conditional use permit will be mutually beneficial for Poe’s, the Town, and the neighboring businesses for several reasons: First, the small parking lot will alleviate the parking problems in this important commercial corridor on Causeway Drive by providing additional off-street parking for Poe’s Tavern. Second, the small parking lot will allow for additional patronage at Poe’s and also at neighboring businesses because some of the metered spaces will be freed up for use by other businesses and the public. And third, the small parking lot is going to be an upgrade to the current MOI site, both aesthetically and practically. The MOI site obviously has become an eyesore after years of non-use and it would be replaced by a pervious and nicely landscaped parking lot that could have buffers in between. We generally agree with staff’s report, however, we do have a serious concern with the proposed conditions one and two. Condition one would reduce the previously granted exception for fifty parking spaces and would reduce it from fifty spaces to thirteen. Condition two, which would require all five of the original lots to be combined into one parcel. We discussed this in great detail at the Planning Board meeting last month. Members of the Planning Board actually voiced their concern before we even presented our position. Ultimately, they voted unanimously to recommend approval of the conditional use permit without conditions one and two. We feel like if those conditions were imposed, it could severely limit the future use of the MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 7 property. Although, combining the lots is a very simple act to do, dividing them in the future would be much more difficult, if not impossible. Reducing our current parking exception and requiring the lots to be combined could, in effect, limit the MOI site to only being a parking lot forever. That may not be the highest and best use of the property and it may not be in the Town’s best interest. This limitation on the future use of the property could destroy the Town’s ability to permit the sort of creative development down the road for that property, which is one of the few remaining commercial properties at the beach. We feel like the owner should not be penalized for making this substantial investment. This could benefit not only Poe’s, but also the Town. So, the owners wish to preserve their options for the future and not be forced to limit their marketability of the property. In addition, the fifth condition that was put on tonight, we’re fine with that. Of course, the parking lot is intended for only Poe’s customers. We will agree that we can’t use it as a paid parking lot so long as we don’t also have conditions one and two imposed on us. At the Planning Board meeting, when we were talking about these conditions, we did suggest one alternative to proposed condition number one. That was, as long as the MOI site is being used as a small parking lot, then the parking exception for Poe’s could be reduced to these thirteen because that is all that would be needed. But, if the MOI site is no longer used as a small parking lot, then the Poe’s exception would be reinstated back to the fifty. I think you were saying we would have to come back, well, if our conditional use permit from 2014 is still in effect, I think it should be that we wouldn’t have to come back if we decided to do something different with the MOI site. We would still have the right to operate Poe’s because we still had that parking exception for fifty spaces. As for condition number two, we don’t have a suggested alternative and we would just ask that that condition be removed. In closing, I encourage you to approve the proposed conditional use permit but with the modified conditions as I’ve just described.”

Mayor Blair said, “The reduction of fifty spaces down to thirteen – I’m unclear why you think that. You still have to come back for a conditional use regardless of what changes there. I am deferring to our Town Attorney’s interpretation.” Mr. Wessell said, “My view is that this is simply an amendment to the existing permit. As I said earlier, they are going to wind up with one permit for all these properties, which is going to be a restaurant and a parking lot. I disagree strongly with the concept that you could cut this parking lot off and go back to that fifty-parking-space exception, even if it was left in there, without first securing an amendment to this conditional use permit from this Board of Aldermen. That is just not my take on it at all.” Ms. Sutton said, “It would not work if we had conditions one and two. But if we didn’t have conditions one and two, we’re still allowed to be in the configuration they are, and we still have the right to keep that fifty-space exception; then, potentially, the MOI site could be used for something else if they got approved. But the Poe’s site, on its own, has been approved to have a restaurant with a fifty-space exception.” Mr. Wessell said, “Well, the problem I see with the fifty-space exception is that they’re just asking for the fifty-parking-space exception to remain in place. I think you’re opening yourself up to uncertainties if you allow that fifty-parking-space exception to remain in place because you don’t know what’s going to happen. I think this is going to create confusion; it’s going to create uncertainty; and I think it is a bad plan.” Alderman Weeks said, “What if there is a reverter clause? If they wanted to put a commercial project on the parking lot, could there be a reverter back to Poe’s parking exception?”

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Mr. Wessell replied, “Wouldn’t it be better, because you all are going to create something that doesn’t attempt to anticipate what changed circumstances might be. Wouldn’t it be better to say take away the fifty-parking-space exception. If, down the line, they want to come back in here and ask you to let the parking lot go and turn it into something else; then they can continue to operate Poe’s. They can ask you for a parking exception at that point in time. They would be asking for the exception they essentially, in my view, have given up by creating this lot.” Alderman Weeks said, “As a business owner, I think this Board has been very amenable to parking exceptions just to try and support businesses like Poe’s. Future Boards might not be as amenable to that and, I think, that’s kind of protecting their interests a little bit. That’s what I sense they are trying to do.” Alderman Miller said, “Let’s not misunderstand what you’re saying. I think the difference is that they’re still going to have to come back if they want to separate that lot. If they want to do what she said, that is separate that lot at some future date; I think she’s asking them to put parking on that lot. If they want to take that out and do something different with that site, not separate lots, they would have to come back in and ask for that permission. What she’s saying is she would like for the parking, if we do reduce it to thirteen, to automatically go back to fifty instead of having to come back and do that whole process again. I have to agree with her, as a business owner; that opens up Pandora’s Box. If all we’re doing is letting them have the parking back that they had, we still get the opportunity to approve that one site but we’re asking for a bigger bite of that cake and I don’t know that that’s fair.” Mr. Wessell said, “I don’t represent Poe’s; I represent the Town of Wrightsville Beach and in my view, the thing that is better for the Town of Wrightsville Beach is not to leave that fifty- parking-space exception in place. I think it is going to create problems; I think it creates uncertainties. It can be dealt with at the time if that’s what they want to do. But, if you leave it in place, I think it’s going to create uncertainties and it is just not the best thing for the Town.” Alderman Miller said, “I don’t think we’re suggesting to leave it in place, right? Are you asking us to leave it in place?” Ms. Sutton replied, “No, we’re fine with it going down to thirteen so long as we’re using the MOI site. But if something changed and someone wanted to do maybe a mixed-use building on the MOI site, they would of course have to come get it approved; but the Poe’s site shouldn’t be penalized for that. Poe’s should be able to have what they were granted in 2014 which was a fifty-space exception.”

Mr. Owens said, “If this is approved, you’ve got one site, basically, with multiple lots and multiple things going on. If they take the parking part out of it, they’ve got to come back and amend Poe’s conditional use permit. So, if you leave the fifty-parking- space exception in there, that’s still part of the Poe’s conditional use permit and the other portion comes back through the conditional use permit process, too. I agree with John (Wessell), to me, it’s cleaner if we remove that parking exception and grant it to somebody else if they need it. But either way will work. It is up to the Board. I don’t think I would have the reverter clause; I would just leave it at fifty with the parking exception and not have that weird reverter clause. The two options are either go back to thirteen or have the fifty and not have a reverter clause.” Mayor Blair said, “I’m less concerned about combining the lots, but I think as a matter of consistency, the way we have done parking on this beach, what you said is what we’ve always done. And I don’t know that we can make judgements for future Boards. I can’t imagine under any circumstances any Board that comes up here would not be supportive of Poe’s. But, I don’t know that it’s our job to predict future – I’m not sure I feel good about that.” MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 9

Mayor Pro Tem Mills said, “I don’t know that they are asking us to predict anything. I think what they’re saying is they were granted something three years ago and they want that back in the event this additional piece goes in another direction. They don’t want to be penalized.” Mayor Blair said, “Can that be done easily?” Mayor Pro Tem Mills said, “I think what Faison (Sutton) is suggesting is the reversion – she didn’t use that word; Alderman Weeks did; but that’s what they were talking about. I think if we approve it, yes.” Alderman King said, “Does it have to be attached – the parking lots – to the original conditional use permit?” Alderman Weeks said, “Well, that’s number two, isn’t it?” Mr. Wessell said, “Whether you combine the lots or not, it’s essentially one conditional use permit.” Mr. Owens said it was an amendment to Poe’s conditional use permit. Alderman King said, “So, this is an amendment to the original conditional use permit?” Mr. Wessell said, “Essentially, that’s what it is. The reason the parking exception is being reduced is because they’re providing additional parking. That’s the reason it’s going down. What they’re trying to do, right or wrong, however you want to look at it, is they’re trying to hold on to a right that they’re essentially giving up by providing additional parking. That may sound somewhat, as Faison (Sutton) mentioned, unfair on the Town’s part; but at the same time, I don’t think you’d want to create a situation where these rights are out there in limbo, and they’re recreated automatically at some point in the future because circumstances change, without you folks having the right to even consider whether it’s good or bad for that right to be recreated. Because that’s what you’re giving up if you allow the fifty- parking-space exception to stay in place, whether it’s reverter-wise or it just simply stays in there. You’re giving up the right to consider whether it’s appropriate, whenever whatever happens in the future happens.”

Alderman Weeks said, “Are you all good with number four?” Ms. Sutton replied, “Yes, and three. I would just say one more thing, the conditions actually severely impact the development plan; the financing. The owners are prepared to close shortly after, assuming this gets passed. They’re buying two sites: the MOI site and the Poe’s site. The two sites have been separately appraised; so if we are going to be required to combine them, that’s going to change. That could potentially derail the project. It is critical to the owners that they not be required to combine the lots and that they not lose the exception that they were granted in 2014. So, we’re asking you to not include those two conditions. If you’re not comfortable with that, then we may need to re-group with our clients.”

Alderman Weeks said, “Can you show Lot five again?” Ms. Sutton said, “There is a recorded plat that shows it better. When John (Wessell) mentioned that we would not know where the setbacks are, while they are originally five lots, the plat that went on in 2014, it has already recombined the five lots into two separate lots; so we do know where the setbacks would be if they were done separately.”

Ms. Pat Bradford, 464-B Causeway Drive, said, “What would happen if the applicant wanted to then increase the outside patio. I think I heard you say tonight that it would come back for a conditional use permit – right?” Mr. Owens said, “To amend the conditional use permit.” Ms. Bradford said, “I support the Town Attorney’s position. He’s a wise man and you hired him to give you his opinion; to represent the Town. Now, when I go by that building, I see a real estate sign on the outside of the building that Mr. Miller is vice president of that company; is that correct?” MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 10

Alderman Miller replied, “Yes. I’m actually Senior Broker and I’m an independent contractor with that company. I’m a 1099 employee. I have no ownership interest. I have nothing to do with this project. I have consulted with the Town Attorney and I appreciate your question.”

With no further input from the public, Mayor Blair closed the public hearing at 6:34 p.m.

Mr. Wessell reminded the Board that they could not approve the conditional use permit until they approve the ordinance amendment.

Mayor Pro Tem Mills said, “I still don’t really see the big issue about the combination of lots. I think Faison (Sutton) addressed the setback question and I hear what Mr. Wessell said about that. I could go either way on that. On those other conditions, I think clearly the big one is the parking space exemption that we’ve got to grapple with. I get both sides of it and I’m struggling with it. I hear these folks, before they make this big investment; they need some degree of certainty to move forward with that. On the other hand, our Town Attorney has basically told us we really shouldn’t do that. Since I make my living advising people on legal issues, I have a certain inclination to go along with the attorney’s advice. The other conditions, they apparently didn’t have a lot of problem with and I don’t see that as a big deal.”

Mayor Blair said, “I don’t know that I have a big problem with the combining of the lots. It might make some difference, but not much. I actually have to agree with you on the parking exception, the way it goes down. My hope is that Poe’s is successful and stays and does their thing. All the years we sit up here and work on these parking exceptions; do the math and the way we work it, from a consistency standpoint, to me, the math is easy. I can’t imagine future Boards penalizing anybody on this beach for a successful business. My inclination is to probably keep condition one and agree to the rest of them. I agree with the Planning staff. I guess I do agree with number two. I’m with John Wessell on the parking exception for the spaces.”

Mayor Pro Tem Mills asked how we would monitor number five. Mr. Wilson replied, “Probably through complaints when we see something like that happen or complaints from other businesses – signage and complaints.” Mayor Blair said we could say it would jeopardize the conditional use permit if violated. Alderman Weeks said, “I was curious why that parking lot had to be attached to the conditional use permit. Could they not just buy that lot and if we amend it with a text amendment to allow a parking lot, could it not be a ‘stand-alone’ and just have ‘Poe’s only’ parking there as a private business owner’s right to permit who can park there? Why do the two have to be connected?” Mr. Wessell replied, “My thought is that it is simply an extension of the existing use. It’s just as though you built a grocery store and you treat the parking lot as a separate operation altogether. It’s one and the same. They’re asking essentially for a significant exception to the existing parking lot requirements in order that they can create a parking lot to service Poe’s – and that’s the only reason they want it there. So, it seems entirely appropriate that it be one conditional use permit – the building and the parking lot. The sole purpose of the parking lot is to facilitate the operation of the business.”

MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 11

Alderman Weeks said, “If the text amendment were approved as a ‘stand- alone,’ how would that look going forward without being attached?” Mr. Wessell replied, “I think then you could use it for whatever reason you want to. This is what the small parking lot exception says, ‘A small parking lot in the C-3 Commercial District that is located immediately adjacent to an existing C-3 business, is used in conjunction with such business, and includes no more than a total of 12,000 square feet’. So, the sole reason for the parking lot there, in fact, its very existence is dependent upon it being used in conjunction with Poe’s. So, to me, it’s one operation plain and simple and that is why I see it as one conditional use permit.” Mayor Blair said, “Is a parking lot a permitted use in C-3 as a stand-alone?” Mr. Wilson replied, “No, the parking lot is always a conditional use permit.”

Alderman Weeks said, “I appreciate the future vision that that could potentially be a viable commercial entity and I was just trying to help it along.” Mr. Wessell said, “You all have the right to do whatever you like here. I’m not dictating anything. If you want to treat these as two separate parcels and they can be used independent of one another, you have the right to do that.”

Alderman Miller said, “I think the applicant, whether she said it or not, has told us that they have an issue with this and I hear Mr. Wessell not jumping up and down and saying this is something I strongly tell you not to do. I appreciate the advice; I don’t ever normally disagree with my attorney and I don’t disagree with him now. I understand what you’re telling us. I also understand that I think I heard you say that there is no way for them to do anything without coming back before us whatever we do tonight. We do have somewhat of a reputation of not being business friendly. I think the general public does not get that. You have a restaurant and a parking lot; they want to go eat and Poe’s is doing a good job. But technically and legally, I understand. I understand their concerns and I don’t really hear a really good reason not to just let it happen. I do understand the fifty-parking-space exception, and I don’t think they should get an exception to keep from going from fifty to thirteen but I don’t really have a problem with letting them have the fifty back because they have to come back here and ask if they are going to do something differently.” As a point of clarity, Alderman Miller said, “I will say to those in this audience, since it was brought up, I always consult with the Town Attorney if there is a perceived issue. I have done that on three occasions and it has not been an issue. You can’t just recuse yourself because you want to; you have to have a reason to do it. I do not have a financial interest in this decision tonight and, if I did, you would have heard it at the beginning of this meeting.”

Alderman Weeks said, “I can’t imagine somebody would buy a parking lot or want a parking lot just for a parking lot. Obviously, the last part of the request for the creation of a small parking lot adjacent to an existing C-3 business – could that be struck on the text amendment? What are the unintended consequences down the road for something else?” Mr. Wessell replied, “The only thing I can say is this exception is a fairly significant exception from the existing standards that apply to new parking lots at Wrightsville Beach. It’s a fairly significant departure from that. And it was made to accommodate these folks. If you cut them apart, you are basically changing pretty significantly the standards for parking lots and they could be built as stand-alone parking lots, I guess, at that point.” MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 12

Mr. Wilson said, “That’s one of the reasons the staff and attorney were asked to do this. It ties into an existing use. There are other properties around Town less than 12,000 square feet – small lots that, if you take that out, could become commercial lots. So, this would apply to a lot of commercial lots.” Alderman Weeks said, “If you put the caveat on there that you cannot charge for parking there, does that kind of solve it?” Mr. Wessell said, “You get back to the question that was asked earlier, how do you enforce that and it is difficult to enforce.” Mr. Owens said, “The text amendment, to me, we tried to narrow the scope of it so it didn’t apply to everybody because we do have some decent standards as far as setbacks and landscaping and this kind of goes against all of that. So, we just wanted to narrow the scope of where this could happen; so we narrowed it to C-3 and it has to be adjacent to an existing business.” Alderman Weeks said, “Adjacent to or part of their business?” Mr. Wessell replied, “Well, it is both, the way it is written. It puts us in a bit of a dilemma because, and I don’t mean to backslide what I said earlier, you’ve got the right to separate this in any way you want to. But if you allow these lots just to be built without any connection to an existing business in order to accommodate their wishes, you may be creating some unintended consequences that nobody has really thought through because this was not created with that in mind at all. It never was considered simply because the way it was written, it was tied specifically to Poe’s.” Mr. Owens said, “And one of the consequences, I believe, is that under our current ordinances, they would not have been able to back out into the right of way. So, the Town in this situation would have picked up eleven spots on Old Causeway Drive. So, this kind of allows them to back into the right of way. It is not a very good situation; it’s happening all over Town. All we wanted was to try to clean that up. You have to have one drive to come in and out of. So, that is sort of one of the consequences.”

Mr. Blair said, “If we are going to veer off of this presentation and this conditional use permit and the way it is written, we should be smart enough to allow ourselves to go through whatever process that might be to make sure we don’t agree to something that turns out to be a problem. If that item is so important to Poe’s, we need to take a look at a different way to do it because I do think we would be going against what we usually do and currently do on parking exceptions.” Mr. Wessell said, “I’m less concerned about combining the lots. I had forgotten what Faison (Sutton) said earlier about the plat that has been recorded that may well have combined the five lots into two. I don’t know that that remedies my concerns but it certainly lessens those concerns. So, maybe the requirement that the lots all be combined is not as significant as it might be. I guess I’m more concerned about leaving in the fifty- parking-space exception simply because of what I said earlier that you cannot guess what’s going to happen in the future and you’re basically locking somebody into something in the future and it may or may not work; you just don’t know. If you want to leave it in there, though, it’s okay. Just leave it in there and let them keep the fifty- space exception or if you want to do that reverter, we can do that.” Mr. Owens said, “I wouldn’t do the reverter.” Mr. Wessell said, “As to Alderman Week’s question, the direction you’re going in, that’s a more significant change that I would be uncomfortable making tonight, only because of what I said that there are potentially some unintended consequences if you just allow these things.” Alderman Weeks said her question had been what those unintended consequences were. Mr. Wessell said he was not sure because he had not thought that through. MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 13

Mayor Blair said, “Since we are coming to a halt, would it be appropriate, because I think we are all trying to get to some place that works, to have a discussion with Mr. Wessell to figure out how to try to accommodate whatever it is we are trying to get to here.” Mr. Wessell said, “If you all are inclined, I understand what is being proposed and I can write a clause that says that.” Alderman Weeks said, “I think there could be some conditions around a reverter, too.” Mayor Blair said, “I just don’t know what it means to other things. I would like a little analysis about what we are doing.” Mr. Owens said, “I’m still not sure why you would do a reverter. It is either you go back to thirteen or you allow the fifty. The only thing I can see for future Boards, if you have another person ask for an exception on that street, you have fifty parking spaces tied up.”

Ms. Sutton said, “Today, we have the fifty-parking-space exception that was granted and to get it taken away from us.” Mr. Wessell said, “It is not a right; you are here tonight to give up that right. The Board has the authority to change that.” Ms. Sutton said, “We don’t feel like it should be taken away. We feel like we are doing a really good thing by buying more property to add a new parking lot and investing more and it feels like we are being punished. Again, we’ve offered up the suggestion that you can take away our fifty and move it down to thirteen so long as we’re using the MOI site as our small parking lot. But later down the road, if something changes and that MOI parking lot is not needed, we should still be able to operate Poe’s the way we were originally granted. The MOI site may become some wonderful commercial project that also benefits the Town. It is not stuck as a parking lot.”

Mayor Blair said, “It would be my suggestion that we table this for the moment and you get with the town attorney to see if there is a way to do this in a way that doesn’t turn the Town’s ordinances and consistency upside down. We want to work with you, I’m just not exactly sure how to word it.” Ms. Sutton said, “That’s fine. I wish we could have talked about it before but a month ago at the Planning Board; the Planning Board unanimously agreed with us and recommended it. When I saw the agenda this morning, I didn’t realize this was still an issue. I thought it had been agreed that those conditions were not in the best interest of Poe’s. But I’m hearing you all and there is obviously some disagreement. I think that’s fine if we need to table it and come back next month.” Mayor Pro Tem Mills said, “With some thought to what could be unintended consequences; we don’t want to create a monster here.” Alderman Weeks said, “We have to look at what somebody else could potentially leverage and spin it the way we had not intended.” Ms. Sutton said, “I think the Poe’s owners would rather us take the continuance until John (Wessell) and I can work together. They would rather do that than get this passed with those conditions.” Mayor Pro Tem Mills made the motion to continue both public hearings to the December 14th meeting at 5:30 p.m., or as soon thereafter as possible. The motion was seconded by Mayor Blair and unanimously approved.

PUBLIC HEARING TO CONSIDER A ZONING TEXT AMENDMENT TO CHAPTER 155 TO ALLOW A HOUSING DEVELOPMENT OF TWENTY-ONE (21) UNITS PER ACRE FOR SINGLE-FAMILY UNITS OR DUPLEXES AND COMMERCIAL SPACE LOCATED IN THE C-2 ZONING DISTRICT.

MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 14

Mr. Wilson said, “We will do the same thing here; we will open the text amendment and then go to the conditional use permit and come back. You have in front of you the zoning text amendment application that was changed. The only thing that changed on the application was the date. I gave that to you and I will talk about a change on the conditional use permit. On June 29th, staff received a text amendment application from Paramounte Engineering LLC on behalf of 19 East Salisbury Street for a text amendment to Chapter 155. The petitioner has requested to amend Chapter 155 to allow for a group housing project, located in the C-2 Zoning District. The project has two components: 1) A Zoning Text Amendment that allows for group housing and commercial use in the C-2 District: and 2) A Conditional Use Permit for the proposed project. The approved project that was already there was for The Helm. The approved project consisted of around 43,000 square feet for the principal structure and it has 36,000 square feet of residential and 23 residential units, and approximately 6,690 square feet of commercial space. That project was approved and is still approved today. The proposed text amendment will allow a housing development of 22 units per acre for single family or duplexes and commercial space located in the C-2 Commercial District. The setbacks for the C-2 will apply to all structures in the group housing development with the following exceptions: 1) zero setback from the 1939 property line shall be permitted (that is the property line at the oceanfront); 2) a ten- foot minimum separation between structures shall be permitted with the conditions that the walls adjacent to the structures are two-hour fire-rated walls. We came up with that for the exceptions to typically a seven-and-a-half-foot setback with fifteen feet between structures. The group housing will have that two-hour firewall. The roofs will be constructed of metal and that will help with fire protection. The group housing development will comply with the principal building height in the C-2 Commercial District (40 feet). This went to the Planning Board on August 1st. When it first went to the Planning Board, there was zero commercial development applied for. At that meeting, the vote was 3-3 for the proposal. The discussion was that they wanted to see some commercial aspect to the project. The owners did hear that and they came back at the next meeting with the commercial aspect. At the October 3rd meeting, the Planning Board voted unanimously to forward a favorable recommendation to the Board of Aldermen for the proposed text amendment. The Town of Wrightsville Beach has two commercial districts: one on East Salisbury Street and the other is located on the south end. This text amendment will probably just apply to the property development here. It has to be one acre or more. It is consistent with our CAMA Land Use Plan Policies 9.1.A.7 and 9.1.A.11. The Planning staff recommends that the Board of Aldermen approve the text amendment to Chapter 155 along with the statement of consistency. There have been some questions about limiting the amount of commercial space to 10% of the area. There is only one building – Building K – we will talk about that in the conditional use permit hearing. The building is only a total of around 4,000 square feet so, we felt like the 10% gave them about twice what they were asking for.”

Alderman Weeks said, “Why was it worded “no more than 10%’?” Mr. Wilson replied, “I don’t know the reason. We looked at the project; they only have one building – Building K. The floor area is only 2,000 square feet. We looked at that and doubled it.” Mr. Owens said, “This is their text amendment and we helped them with it. The 10% basically fit in to what they were showing.” MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 15

Alderman Weeks said, “It is a limiting statement instead of the other way around. The 10-foot setbacks – I was kind of surprised that the Fire Department didn’t want to at least explore sprinkler systems because we are building buildings closer together.” Mr. Wilson said, “It was discussed but you cannot require sprinklers in residential; you can ask them but you cannot tell them to do it.” Alderman Weeks said, “But this is group housing development. Speaking of unintended consequences, what other parcels on the beach could this be replicated, not just in C-2 but other commercial properties on the beach?” Mr. Wilson replied, “It has to be an acre or more and we didn’t do an analysis, I will have to look at the two C-2 Districts. I don’t know if any of those at the south end would be an acre or more.” Alderman Weeks said, “How about other C Districts?” Mr. Wilson replied, “There could be some.” Mr. Owens said, “It is limited to C-2.” Alderman Weeks said, “But this is a precedent that we’re setting.” Mr. Owens said, “There would have to be a text amendment to make it C-2, C-3, C-4 or C-5.” Alderman Weeks said, “So the Marina District, The Landing.” Mr. Wilson said, “The Landing – I don’t know if that is an acre. The Marina Street Area – I don’t know if one person has an acre down there; they may.”

Mayor Blair opened the public hearing at 7:04 p.m.

Mr. Jeff Keeter, attorney representing the applicant, said, “When we were looking at the property and what would be feasible on that property, we recognized, that the highest and best use of that property would be residential. We also recognized that it was a C-2 Zoning District. Group housing was a concept that was in the subdivision regulations. It wasn’t even included in the Table of Uses where it could be applied. I met with John (Wessell) about this a little bit and, after back and forth, we decided that the best way to approach it was to put it before the Board to consider. The plan for this project was to make this group housing concept a residential use and have it, under a conditional use permit, exclusive to C-2 zones. I believe one of the requirements, originally, was that it would have to be an acre in the group housing ordinance; so we kept the one acre – this site is 1.1 acre. We went through the ordinance and determined what sections would need to be modified and massaged. Those have been included in this text amendment. What we have in front of us is an opportunity to allow group housing in a C-2 zone that is one acre or more, there being only two aggregations of the C-2 zoned property in Wrightsville Beach – the Mercer’s Pier area and the Oceanic Pier area. We proceeded on the basis of a residential group housing project. When we got to the Planning Board, of course, there was some consternation concerning the commercial aspect being lost. My client heard that and withdrew instead of coming to you with a divided vote, and took a step back and said ‘what can we do to accommodate that desire to have commercial’. They redesigned the plan to come up with the commercial aspect of the project. What the group housing will allow is primarily for residential purposes but it will allow commercial use of up to ten percent. That accommodates the commercial unit that we anticipate constructing and it also addresses some of the concerns that the Planning Board and others had with regard to the use of the property being exclusively for residential purposes. What is being proposed is 22 units; 21 of which will be residential; one of which will be commercial. The commercial site you’ll see on the plan is tied into – one of the accesses will come onto the ramp that leads up to Johnnie Mercer’s Pier. That ramp is located on property owned by my client but Mercer’s Pier has an easement for

MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 16 that ramp; a non-exclusive easement. Today, we obtained a joint-use maintenance agreement with Mercer’s Enterprises. So, we have an agreement about our plan to tie into that ramp. The zoning ordinance text amendment change is intended to accommodate a residential use in a commercial area while allowing also for there to be a commercial component in that group housing project.”

Alderman Weeks said, “In Building K, will both floors be commercial. Our packet says just the first floor and the top floor will be residential.” Mr. Keeter replied, “That’s correct. The ground floor is going to be the access way; there will be parking and the elevators for ADA compliance. The first habitable area will be a commercial unit; upstairs will be a residential unit.” Alderman Weeks said, “So, 2,000 square feet or roughly 4% of the entire project will be commercial.” Mr. Keeter replied, “I don’t know what the exact numbers are.” Mayor Pro Tem Mills said, “Is the second floor prohibited from being used as commercial?” Mr. Keeter replied, “It is not prohibited but it is not what we’re asking for. We thought that the first floor with an access off the ramp with a nice walkway would be more conducive and more inviting for people to come up there for whatever the use might be. That is yet to be determined and whoever buys or rents that will have to come back to the Board for a conditional use permit modification.” Alderman Weeks said, “But the entire building has to be constructed for commercial.”

Ms. Sue Bulluck said, “I put things in categories and I look at things as a rock or a gem. As I see this process, it is a gem rating as something else. It is not a rock; but it is sure not a gem. We are changing a use profile to a group housing definition. If you will remember our discussion years ago about density and the uses in two, three and four. That term was left out of the uses for a good reason; it didn’t fit multiple housing and it didn’t fit mixed use. It still doesn’t. What I think we’re trying to do here in a text amendment is to make something that shouldn’t exist without a full zoning or ordinance process. I was the one that stood up in Planning Board meeting and said, ‘I’m concerned about changing a commercial district to a residential district’. They came back and the discussion was held with John (Wessell) and with staff about the percent. If we follow this precedent and we look at what we are doing in the Land Use Plan Committee, what is it that is going to prevent the establishment of a precedent that says in mixed use, we only have to have 10%? That to me shoves things to a residential perspective. I think we’re heading in the wrong direction with this process and how it is being done. If they were doing 30% commercial; if they were doing something that was flexible that really benefitted and could be claimed as commercial mixed use, then I could buy into it. It’s a beautiful project but it is a residential project; it is not a mixed use and it is not anything but a residential project in a commercial zone with 4% commercial. I will come back during the conditional use permit hearing and go over the items that I don’t think it meets, but I think the use of this text amendment process gives real pause to what the unintended consequences might be later on; either legally or challenges in terms of future development.”

Mr. Neal Briggi, 4B W Henderson Street, said, “I think the number is 4.5% for commercial so I have a hard time using the word with the letter “C” or C-2 Commercial as applying to this project. It, basically, is a long-term decision you are making and for all the reasons that Sue (Bulluck) just talked to, I agree and the people that I represent do not think this is a good decision. The other issue has to do with that October 3rd MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 17

Planning Board meeting where what became revealed to the Planning Board was the fact that there seemed to already be some pre-indication given to the petitioner that 10% would be okay – they would not have to go as high as they were originally suggesting so I do not understand the steering that the petitioner got form our staff or how it came about that even got us into this situation at 10% or less. That seems to be rather mysterious just as you doing the text or the conditional use permit right now; this all seems to be a little murky. So, I would like you to consider what the Town is going to stand on as far as commercial districts – commercial component of that moving forward. And also, give direction to staff as to how they engage in pre- negotiations before it goes to the Planning Board. Was that guidance? Was that steering? It just seemed to be absurd.”

Mr. Mike Edmonds, 601 North Channel Drive, said, “I do agree with Neal (Briggi) and Sue (Bulluck) in that 10% is not enough. We are losing commercial space. If this text amendment is tied to 10%, that is not enough and it needs to be increased for commercial. That’s why I disagree.”

Ms. Pat Bradford, 464-B Causeway Drive, said, “I agree completely with what the previous three people have said. And I would point out that when the CAMA Land Use Plan Committee met and they put out the word “group housing,” it was under the concept that we might do some sort of housing that would hold older people; a nursing home-type configuration. I was there when that happened and that is what was on their minds. I confirmed it with former Mayor Bob O’Quinn. That is what they were thinking. They never, ever thought about making commercial property residential. And Alderman Weeks asked a question that has been one of my concerns. We have two C-2 zones; the Oceanic and Surf Suites are in C-2. If those two properties got together and combined, you’ve got an acre and here we go again. And we are well on our way to being a residential beach and not a town. So, I want you to slow this down and think about the consequences of what you’re doing. Text amendments have consequences. You haven’t looked around the corners and I think you should.”

Mr. Wayne Bland, 11 Seagull Street, said, “I’m totally confused here on where we’re at. I like the project. I like the people involved. But, they were at 15%. They were told they could go to 10%. Now we are at 4%. I don’t understand the direction here. There seems to be a lack of it. It is confusing to everyone. My neighborhood is for the project. We are really adamant about quality of life and the people I’ve dealt with will give us that. But, is this right the way we’re going about this? It is very confusing that it was 15%, it has been 10%, and now it is 4%. They were willing to do 15%. I don’t understand where we’re at.”

With no further input from the public, Mayor Blair closed the public hearing at 7:20 p.m.

Mayor Pro Tem Mills said, “I think we have to address what is before us and some of this talk about 10% or 15% - that’s not in front of me and I can’t get into that. I do know that running up to the election, I had any number of people who were familiar with this; speak in very positive terms about it. And, Mr. Bland just said his street and his neighborhood was for it. I talked with people on Greensboro and Shearwater Streets over in each direction; nothing but positive comments. I hear the speakers’ concern about the commercial but I was on the Planning Board when the Helm was MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 18 approved; and there hasn’t been exactly a stampede of people coming forward to present any commercial projects over there. So, to sit back and say it has to be 100% commercial, or 50% commercial or whatever, that sounds good but it is just sitting there. And these poor folks that live over there beside it are having to endure a very difficult situation that I suspect nobody in this room would be willing to live with. I am troubled by what Mr. Briggi said about agreements – I get that but that is not the way to go about it but that is not in front of us right now. And this Board is not in a position tonight to say that mixed use has to be 10% or 15% or 30%. That is not in front of us right now.”

Mayor Blair said, “During the election, the number of people that I have talked to – the percentage of commercial as a number and the demand and who’s willing to take the risk and put stuff on this beach that can survive. That formula, to me, is a moving target. I think everyone on this Board would love to see the charrette theory of we need all these services on the beach. I have been here for twenty-eight years and we’ve done Poe’s and the south end has the Surf Shop but the fact of the matter is that it is hard to get people to come down and put investments on commercial properties down here. We all want them but we don’t get a lot of opportunities for it. The Helm has been sitting over there for almost a decade doing absolutely nothing. We can talk about ordinances and text amendments and all of that, but we have a lot of folks out there that have been sitting there and waiting for something to get done on those streets to improve their quality of life. And part of why we’re up here is people sort of want us to take a look at the commercial and residential. I don’t think any of us want to turn it into a residential beach. But I think people do want us to look at the properties they are living around. And the way we look at the Town is kind of a holistic approach and Johnnie Mercers Pier area is not a great place on this beach; it hasn’t been for a decade. We have had some unusual commercial attempts or at least theoretical attempts out here but none of them are going to happen. As much as I would like to see some sustainable something on this beach, I just do not see a lot of people showing up to do it. I don’t want to take someone that’s actually willing to put the risk to come in here to make the investment and actually try to help out. I don’t want to run that guy off the beach because we don’t get a lot of those kind of guys willing to put up those kind of numbers. And, I think we need to consider the views of the folks that actually live around those areas. My inclination is to take a look at it. I don’t know what the right percent is. The demand and the percentage of what we have on commercial should be determined by the market and what we get people to invest in that makes sense. Maybe it is 20% or maybe it is 4%; I’m not sure but I’m inclined to take a look at it or at least get this particular conditional use permit looked at.”

Alderman Weeks said, “I’m with the Mayor but I’m confused. I’ve been on this Board two terms and we were always instructed to view the text amendment as a stand-alone and not think about the project that was going to be discussed next. So, right now, I’m just focused on the text amendment for group housing in a commercial district. That just flies against the CAMA Land Use although we’re ahead of what our current CAMA Land Use Committee is working on. The CAMA Land Use Policy states that ‘types of developments encouraged – the Town will encourage single-family, duplex, appropriate neighborhood oriented businesses.’ Then Policy 9.1.85 – the Town will encourage commercial establishments providing basic goods and services

MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 19 to year-round residents and visitors. And, a group housing project I don’t think meets that criteria. I would have liked to have seen it go the mixed-use approach with a little bit of creativity. I absolutely think the folks on Seagull deserve 100% residential on that street. They have put up with enough for long enough. But on Salisbury, it warrants some sort of mixed-use opportunity. I think the Planning Board signaled that. Something was thrown out and the developer went with it – was my understanding. But, 4% is disappointing to me. And, I don’t like the ‘no more than 10%’ statement’. If we can at least tweak that to not limit it to 10%; just trying to not say ‘shall not exceed 10%.’ But I’m strictly focused on the text amendment right now. Regarding unintended consequences, this is a precedent for C-2 but I could see it being replicated in C-3 once the precedent is set and that really concerns me.”

Alderman Miller said, “I want to be clear; I don’t have a thing to do with this project. Cape Fear Commercial has nothing to do with this project. But Cape Fear Commercial has had a lot to do with this site. I personally represented the Johnson family in bankruptcy in 2004-2005 and sold this property for them along with the rest of the pieces to total up to right at one and a quarter acres. Regarding Ward Manning – I was instantly involved with this project and the only reason it had any commercial in the final outcome was because the Town required it. The commercial wasn’t just because it was going to be a viable project, it was just that he had to have it to get it passed. When the property was taken back by First Bank, Cape Fear Commercial represented First Bank and marketed the property. We couldn’t find anybody that was interested in the project, as it existed. Because of the zoning and because of the permit, there was no way to market it but we had several people that wanted to turn it into a parking lot and several people that wanted to look at anything over forty feet. We couldn’t do that because we’re not allowed to get mixed use to look at projects over forty feet. I’ve always found it interested that we support commercial and we want commercial but we don’t want anything over forty feet. And I’m going to tell you – I’m in the business and with our FEMA issues and CAMA Land Use Plan and the whole nine yards, you can’t build a commercial project down here with residential in a mixed use project for less than forty feet that is an economically viable project. So, I applaud the fact that the man came back with some commercial, whether it is 10% or 4% or whatever it is. I think he put it in there, not because he’s going to make a lot of money off of the commercial part of it, but because it is something that he can give to the Town to support the Town. That’s what I think but they haven’t told me that. I don’t want to see commercial go away; I don’t want to see us become a bedroom community but I don’t know that we can dictate the economics of the project. We have been up here a long time waiting for somebody to bring it and, until we do something with our forty feet, we’re going to be sitting up here for a long time waiting for another project on this site and I don’t think that’s fair to the people on Salisbury Street.”

Alderman King said, “I haven’t seen any commercial busting the door down. I talked to a lot of people on Seagull Street and they really want something there. I just think we’ve got to do something. I think this is a good compromise.”

Alderman Weeks said, “Where did the ‘not-to-exceed-ten-percent’ come from?” Mr. Owens said, “This is their application; they submitted the application. We chose it because it met what they wanted to do.” MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 20

Mr. Wessell said, “What happens is they give us these ordinances and what I try to do and Tony and Tim try to do is just shape it a little bit. But it is their ordinance and their request.” Mr. Owens said, “Staff didn’t say 10%. If they had come with 40%, we would have made it 40%.” Alderman Weeks said, “Is there an alternative to a “not to exceed” clause?” Mr. Wessell said it was within the Board’s power to change that in whatever fashion they wanted to. Alderman King said, “So, would you put a cap on it?” Alderman Weeks replied, “I don’t think we need a cap. I think the market would dictate but I think there should be a commercial component clause in there but I don’t know what that percentage should be. I don’t like the text amendment so I’m the wrong person to amend it.” Alderman King suggested just saying 10%. Alderman Weeks suggested saying ‘not to exceed 50%’ because it is a random number.

Mr. Owens suggested tabling this until after the conditional use permit hearing and then come back to this.

PUBLIC HEARING TO CONSIDER A CONDITIONAL USE PERMIT FOR GROUP HOUSING FOR 19 EAST SALISBURY STREET.

Mayor Blair administered the oath to those wishing to address the conditional use permit.

Mr. Wilson said, “This is a conditional use permit application for group housing at 19 East Salisbury Street. This property is zoned C-2 and it contains 1.098 acres. The petitioner is Paramounte Engineering, Inc. representing the property owner of 19 East Salisbury, LLC. They are requesting a conditional use permit to build ten 2,800 square-foot duplexes with one commercial structure. On top of that commercial structure, there will be one residential unit, so there will be twenty-one units. They are also requesting a parking exception for the commercial uses. On Page 195 is the existing conditional use permit that was approved. On Page 196, the proposed project is ten duplexes; then we have 352 square feet of deck per duplex. Each structure will meet the 40-foot height requirement. The commercial structure is Unit K and it consists of approximately 2,000 square feet of commercial area on the first elevated floor; then there is a residential structure on top of that. The structures will have 15- foot setbacks from Seagull and Salisbury Streets and a 10-foot separation from each structure with two-hour fire rated walls facing another structure. The zero setback line will be permitted from the 1939 Property Line, which is the ocean front line. When completed, the residential project will have onsite parking for the units, sidewalks and landscaping. The commercial property will have off-street parking for two spaces onsite and will require a parking exception for ten spaces. The parking exception may be granted through Section 155.9.1.6 of the Code of Ordinances. They have answered the findings in the Performance Standards in Section 155.5.3.2 of the Code of Ordinances. The proposed group housing conditional use permit will be compatible with surrounding development and provide the following benefits: 1) The site is adjacent to residential duplexes and commercial properties 2) We feel like the ten duplexes and one commercial space will have less impact on the existing neighborhood than the approved mixed use project; and 3) The current site has been vacant for more than ten years; the group housing development may be the best use of this property. On August 1, 2017, the Planning Board members discussed the conditional use permit and the text amendment application. After the presentation and MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 21 discussion, the Board voted 3-3 for the conditional use permit. On October 3rd, they brought this back to the Planning Board with that commercial component. After the presentation, the Board voted unanimously to forward a favorable recommendation to the Board of Aldermen for the conditional use permit for this address. Departmental Review: 1) No comments from the Police Department; 2) The Fire Department said, “Provide a two-hour fire wall between units and the commercial building will have to comply with the 2012 State Building Codes and Appendix D;” and 3) Public Works felt that the conditions they sent you that day would apply to this. They feel like it is consistent with Policy 9.1.A.7 and Policy 9.1.A.11 of the CAMA Land Use Plan. The Planning Staff recommends that the Board of Aldermen approve the conditional use permit for 19 East Salisbury Street with the following proposed conditions in Exhibit A to the conditional use permit for 19 E. Salisbury, LLC:”

East Salisbury:

1. Owner shall install a 6-inch water line extension from Salisbury over to Seagull with a hydrant of Town specifications on Seagull. 2. Owner shall dedicate a Town Easement across the property for the water line. 3. The newly installed water line shall be dedicated to the Town and accepted by the Board of Aldermen. A lien waiver for the water line improvements shall be submitted to the Town at the time the Board considers the line for acceptance. All improvements to the water line and hydrants shall be warrantied for one year following issuance of a Certificate of Occupancy for the entire project. 4. The proposed new sidewalks and walkways to be installed in the E. Salisbury ROW shall become property of the Town. The new sidewalks and walkways shall be warrantied for one year following the issuance of a Certificate of Occupancy for the entire project. 5. Given the number of taps and work that will be done in the East Salisbury ROW, the asphalt area within the newly striped parking area and next to the development shall be neatly removed and replaced with new pavement per Town specifications. 6. The owner will agree to an encroachment and maintenance agreement for the installation of any new landscaping in the East Salisbury ROW. 7. Handicap Signs shall be installed per Code. 8. The Owner or HOA will dedicate easements to the Town for the installation of water meters and other public utilities located on private property adjacent to the new sidewalk as shown on the plans.

Seagull:

1. Given the number of taps and work that will be done in the Seagull Street ROW, the asphalt area within the newly striped parking area and next to the development shall be neatly removed and replaced with new pavement per Town specifications. 2. The proposed new sidewalks and walkways to be installed in the Seagull Street ROW shall become property of the Town. The new sidewalks and walkways shall be warrantied for one year following the issuance of a Certificate of Occupancy for the entire project. 3. The proposed new bulb outs to be installed in the Seagull ROW shall become property of the Town. The improvements shall be warrantied for one year following the issuance of a Certificate of Occupancy for the entire project. 4. The new hydrant installed in the Seagull Street ROW shall be done so per Town Specifications. 5. The Owner or HOA will dedicate easements to the Town for the installation of water meters and other public utilities located on private property adjacent to the new sidewalk as shown on the plans. 6. The Owner will agree to an encroachment and maintenance agreement for the installation of any new landscaping in the Seagull Street ROW. MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 22

7. The proposed gates should be siren activated or some other agreement for entry based on input from the Police Chief and Fire Chief. The western-most entrance gate should be moved internally into the development a minimum of 20 feet to allow for a minimum of one car to be parked while waiting for the gate to open. 8. The sewer mains installed shall be the responsibility of the development up to a manhole that will be installed by the Owner and dedicated to the Town in the Seagull Street ROW. The manhole shall be warrantied for a period of one year following the issuance of a Certificate of Occupancy for the entire project.

Inside Project Boundary:

1. All of Building K shall meet the Building Code requirements for a Fire District with regard to construction except as such requirements as amended in the Group Housing Ordinance. 2. The Owner shall have two-hour rated walls, openings and roof eaves on all external building walls (eastern and western side walls) for all other buildings. 3. A metal roof or fire rated roof shall be installed on all roof structures of all buildings. 4. A storm water permit should be submitted and approved that meets all Town ordinances. 5. No building shall be constructed over 40 feet as measured per the Town Code. 6. Limited low profile landscaping between buildings shall be allowed following the approval of the Fire Chief and Town Manager. 7. HOA documents showing common areas and limited common areas shall be presented and approved prior to beginning construction. 8. All ownership rights with regard to attaching to the Mercer’s Pier ramp shall be resolved legally prior to the issuance of a building permit. In the event that there is no resolution, the conditional use permit may need to be modified if stairs are proposed in another location other than shown on the submitted and approved plans. 9. Any proposed signage shall meet current Town Code requirements. 10. All lighting shall meet Town Ordinances. 11. If a conditional use is proposed in the vacant commercial space at any time, a separate conditional use hearing would be required.

List of Additional Conditions:

1. That the project shall be developed in accordance with the application, site plan and all other materials submitted and approved by the Town. 2. That this conditional use permit shall comply with all other supplemental regulations and requirements imposed by the Zoning Ordinance or any other applicable federal, state or local law, ordinance or regulations. In the event of a conflict, the more stringent requirement or higher standard shall apply. 3. That in the event the applicant violates any of the terms and conditions as set forth herein or develops the property in a manner different than that outlined in the plan submitted by the applicant, this permit shall be subject to revocation. 4. If the property owner receives two or more citations for noise violations within a twelve- month period, the conditional use permit shall be subject to review and possible revocation. 5. The applicant shall comply with all Town Codes and Ordinances. 6. The applicant shall obtain all necessary state and local permits. 7. The applicant shall comply with the orders and directives of the New Hanover County Fire Marshal. 8. All deliveries shall occur between 8:00 a.m. and 8:00 p.m. for the commercial portion of the group housing development.

MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 23

9. In the event that the applicant applies and is approved for an amendment to this conditional use for a restaurant, the conditions shall include that no customers shall be seated after 10:00 p.m. each night. All staff and customers must vacate the premises and the premises must be closed by 12:00 midnight each night. 10. The dumping of trash and bottles shall occur only between the hours of 8:00 a.m. and 8:00 p.m. 11. There shall be no outdoor seating and no live or recorded music will be played outside the restaurant unless otherwise approved by the Board of Aldermen through a conditional use modification. 12. No food or beverage shall be served or sold through any window. 13. The property owner and tenant shall sign affidavits confirming that they will not apply for an ABC permit to operate a private club.

Attorney Jeff Keeter, representing the applicant, said, “The conditional use permit application was submitted in conjunction with the text amendment request to provide for the best opportunity to develop this piece of land. For eight or nine years, it has sat vacant with a chain-link fence and a wind fence protector saying, “no trespassing” – a blight to this community. The reality is that no commercial endeavor would be successful there because of the infrastructure costs; the land costs; the building costs. If someone buys it and rents it to a tenant, the per-square-foot rental rate would not pay for what it would cost to have commercial at that location. The highest and best use and the best opportunity for this Town and for the advancement of this area, as well as the tax base, would be for it to be developed as residential units and that is what’s being proposed. We have answered all of the questions that were required by law for a conditional use permit and we would like to have that accepted into the record.”

Mr. D. Logan, managing member of 19 East Salisbury, LLC, said, “Dan Smith, my other partner could not make it tonight but both of us are residents of Wrightsville Beach. When we first started looking at this project, we asked ourselves what would work here. It has been sitting there vacant for ten years. Those of you that have been around awhile remember what this place used to look like and the things that used to go on there. It was our opinion that, with what has been getting proposed there for the last ten years, it would look like this again one day.” Mr. Logan reviewed the projects that had been proposed over the years that would not work because of the numbers. He also reviewed a project that he was developing in Leland that works because he has the height. He said, “I believe in mixed use but there is a difference and the difference is the height. I’m here to get this project approved. I live at the beach and would love to see mixed use but the numbers will not work. These businesses that are succeeding at Wrightsville Beach that have retail uses, they’ve been here for years. One thing that has not been mentioned tonight is the current codes. In order for retail to work on the first floor – you can’t do like you can do at Surf City; you can’t do like you can do at Hot Wax (or whatever it is next to Vito’s). This man is going to make me build flood proof; under today’s code, 13 feet. We’re not talking about two or three hundred dollars per foot for construction; we’re talking about five or six hundred dollars. We’re not talking about thirty dollars per foot for rent; we’re talking about fifty or sixty dollars per foot for rent. People can’t pay it. The numbers won’t work. Everybody knows that retail and commercial pays the most and I would gladly do it if it would work – but I would go bankrupt if I tried. And that is the reason it has been sitting there for ten years because nobody is willing to take that risk.” MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 24

Mr. Logan continued, “This is what we have come up with. The Planning Board asked me to come back and put a retail component. We feel like this ties into it very nicely. This would be about 2,500 square feet. We did come back and we put this component and we feel like if there is a place it will work, it will work here and it will benefit both us and the pier. I think we can feed off of each other.” Mr. Logan showed the conceptual streetscape from Seagull Street and said, “It will be one-way traffic. You drive in on the right and that is a one-way street; do a loop in between and come out on the left. It will be one way in and one way out. This is gated; we are containing all of our parking. All of our parking will be under our houses. The Town actually picks up approximately 18 spaces that they did not otherwise have. One of the things that we wanted to accomplish was that it would be immaculately maintained and landscaped. You know what duplexes look like or that type of housing after twenty or thirty years; you end up with college kids in it and that’s not what we wanted. We wanted a nice project that is maintained by the association; it is immaculately landscaped and kept up year round. It meets the density requirement without being a big box motel-type thing. We’re containing all of our traffic onsite. It provides additional parking for the Town. It meets the 40-foot height restriction. Again, the Planning staff has supported it. I think the Town staff has supported it. We did what the Planning Board asked. We hope you will support it.”

Ms. Allison Engebretson, landscape architect and land planner, said, “We can speak to some of the technical aspects of the plan. As Mr. Logan pointed out, the current view of the site is rather bleak. It has a windscreen; it has sand blowing; it has some areas with broken sidewalk that makes it very difficult for folks to enter into the beach. We really see this as kind of a gateway to the beach. Johnnie Mercer’s Pier is sort of central to Wrightsville Beach and, unfortunately, in the past decade, it has seemed to decline a bit. We think this current project is going to help that streetscape sort of revitalize this portion of the beach. For the reasons that Mr. Logan has spoken about, I think that commercial may be a bit of a challenge here. We have tried to look at the community and look at how we can integrate somethings where the financial aspect of it works as well as integrate into the community. This area has 22 units total and one commercial unit, which is about 2,065 square feet but it has the potential for some outdoor use. We see this particular area as sort of that entrance to the beach that I was talking about. It has the potential to capture folks coming off the beach, off the pier, walking along Salisbury Street, and be able to engage with them on a streetscape level. The area with the umbrellas is potentially an outdoor patio. We’re not saying that is definitely going to happen but we certainly put it in the plan that it might be able to happen. That particular retail use has to come in as a conditional use for you all to consider in the future; but we are trying to provide something that allows the flexibility of a multitude of uses in this area and something that engages with the neighborhood. Seagull Street is residential and we feel this type of project will integrate nicely. We had a community meeting and a couple of those neighbors came out. They had a community meeting before our community meeting and sent a couple of representatives; they were in support. We feel like we have worked with the Town and the community to figure out what the best fit is. Ultimately, it is up to the developer to find out what he can build and how he can financially make this a go. But we feel this is bringing up the streetscape and providing a nice entrance to the beach and integrating into the community nicely.”

MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 25

Mr. Rob Allen, special engineer, said, “With this project, we’re going to be making a water main connection between Salisbury Street and Seagull Street to help water quality and help water pressures in the area. It will traverse through the middle of this property. This property will also have private sewer that will be maintained by an HOA and we’ll connect to the Town’s system so it will be a private/public system. We’re also going to be managing storm water on site, meeting the Town and state requirements for that as well. All utilities will be on site.”

Alderman Weeks questioned the garage doors being in the front while the car entrance would be from behind. Ms. Engebretson said, “There is a faux front sort of thing. They are able to roll up so that you can get air movement through there should you be sitting down in a lawn chair. But they are not intended for vehicular access; all of that will be interior to the property.”

Mayor Blair opened the public hearing at 8:01 p.m.

Ms. Sue Bulluck, speaking on behalf of the Chamber, said, “This is a group home change to a structured ordinance which has specified uses. This is a residential project. It is a great residential project. If it weren’t for Alderman Miller’s comment, I could buy almost anything that has been said tonight. But we are making decisions that are going to impact this beach for the next ten years; until we do the next Land Use Plan. We are basing everything we’re talking about on the 2005 CAMA Land Use Plan. Things have changed a bit. I could buy everything that Mr. Logan has said; mixed use won’t work here; commercial can’t work. It probably cannot work unless we address the elephant in the room and that is height. I brought two people willing to look at that property – hoteliers. I came to Tony and said what do you think the chances are of height. Oh no, we’re at 40 feet; we’re never doing anything else – that was the implication. And with all due respect, the commercial aspect of this project got established based on the applicant’s attorney at the public hearing who testified that it was John and Tony that established the 10%. I think the whole process of looking at this and not calling it what it is, is sort of a charade. I think we need to be looking at this as what it is; a residential change of a commercial zone with a 4%, rather than a 10%, commercial. And on that basis, I would ask you not to deny it, but I would like for you to look at the possibilities of holding this until the CAMA Land Use Plan Committee is finished; that committee is now sitting and has to address the issues of what our beach is going to be. I don’t know if it would change Mr. Logan’s plan if it were a greater height. I don’t know that you’re willing to take the wrath of those residents who are insistent that there is some magic in the forty-foot. But if we don’t do something, you and we are doomed to a residential beach.”

Ms. Pat Bradford, 464-B Causeway Drive, said, “I’m not against the project per se; I’m against the way you are going about doing it. Everything Sue Bulluck said, I second it. This is a thinly veiled attempt to change commercial into residential. I love what Mr. Logan wants to do but I’m really concerned. I attended both Planning Board meetings; it was at 1,400 square feet and it took in some of the outside stuff like air conditioning units. Tonight we are hearing 2,065 square feet, so that is better but I’m concerned that you are changing our Town’s commercial into residential. When the motel was there, there were 32 rooms and we sat in meeting after meeting where the residents complained about the cars on Seagull Street from the motel with 32 rooms. MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 26

And that was when ingress and egress was on both streets. Now you are saying all of the cars are going to dump out onto Seagull Street – a residential street. I don’t do math well but if there are 10 units with two in each building; we have at least 20 although Mr. Keeter said 22. Each unit will have three bedrooms unless that has changed since the last meeting of the Planning Board. That’s 66 bedrooms. If you put two people in each bedroom, you’re looking at 132 possible cars. That’s a lot of cars on Seagull Street. Have you thought about that? I’m not saying it is terrible but when the residents who end up living on Seagull Street and those houses change hands, how are they going to feel about 132 cars? If they only make one trip – one going out. Coming in – that’s two times more. What about their friends that will come over? That’s a lot of cars on a residential street. I’m just pointing out some things that I have not yet heard in the Planning Board meetings.”

Ms. Laura Tiblier, 1200 North Lumina Avenue, said, “I have lived on different areas of the beach; I have lived at 1200 North Lumina Avenue for one year, so this is a window of eminent concern for me. I am also a business owner. I understand the difficulties of having commercial on the beach. I also understand the need to do something with it. I am super concerned that it keeps being brought up that it has been empty for ten years. I think when you consider something that is very important to everyone on this beach and the future direction; I think it should be tabled to look at the CAMA Land Use Plan. I’m concerned about the traffic, mostly on Seagull. I actually liked the previous plan with 50-foot height. I was hoping that would go through even though it would take away my ocean view. It limited the concentration of people. I would be most interested in who would be in that; what the HOA covenants would be; and how many people can be in it; how many cars could they have; and then just the sewage issue of the concentration. So, I’m not against doing something because I understand that everybody wants to see something be done. And I’m also not going against having support for it. It is just concerning that the commercial will never come back and we don’t want to live on a beach without commercial property. If everybody agrees in this room that we all want commercial property, why don’t we, as a board and as a town, give incentive; have a pro-business community. We just sat through an hour and a half of talking about thirteen parking spots. That is not pro-business.”

Mr. Jim Smith, 54 Pelican Drive, said, “I’m in favor of the project. I heard what a lot of you said that commercial-retail cannot make it on this beach unless we, as a town, are sincere about it and we’re going to figure out a way to help it happen. We refuse to give any relief on the height restriction. I’m on the CAMA Land Use Plan Committee. We proposed putting some verbiage in there. There’s a lot of folks on that committee that refuse to change that. We need to figure out how to give retailers and commercial people on this beach incentives to build. We’re at a dead end. When you do retail, you draw a circle around your establishment. Well, we already have a half circle because we’re on the edge of the ocean; you can’t get here – we’ve got the bridge, we’ve got traffic; we’re seasonal. We’ve got everything working against us. We need to incentivize with possible tax incentives, building permit relief, height relief, so that developers can afford to build space that retailers can rent. Unless we’re sincere about that, we will become just a residential community. Getting back to this particular project, I don’t know that retail will work there because there isn’t any parking. I walked down there on a beautiful Saturday evening about eight thirty; not a parking space to be had. If you put more retail down there, it’s going to die on the vine. MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 27

Mr. Wayne Bland, 11 Seagull Street, said, “Everybody talks about a decade; I have lived with it for two decades. We have a 4,000 square feet top of that pier sitting there empty, which we’ve had to live with the fallout from that. There shouldn’t be this kind of confusion. The 4%; the 10% came from the Planning Board meeting which they said Mr. Wessell proposed. These people are what we want in the neighborhood. We need to vote tonight to move forward. Twenty years is too long to come to meetings like this with this much confusion. These are good people and this is a great project. It’s time to do it.”

Mr. Max Smith, 205 South Channel Drive, said, “I am a real estate broker with Intracoastal Realty. I have been talking with a lot of brokers and we all think this is a great project. It’s going to increase property values in the area.”

Mr. Neal Briggi, 4B West Henderson Street, said, “The Town has had to make a lot of adjustments over the years. With the height issue, the rules changed for us with FEMA, and for us not to deal with the fact that it has changed is handcuffing us. It is a big mistake. We need to deal with it. I can respect people who want to keep their neighborhood under forty feet, but the reality is that it has huge implications for the next decades. With respect to the way you’ve dealt with these issues in the past, you said let’s go through the CAMA process. I attended one of those meetings and, unfortunately, it was a meeting where there was pushback on the suggestion about the height issue. I think there are solutions to the height issue. We have to look at the world differently; we have to give height to these buildings. All of the developers are telling us that. I strongly suggest that you don’t just kick this can down the road; you actually set a date with that CAMA plan where you meet and you deal with this critical issue. We do have other parcels of land that have the same issue.”

Mr. Keeter said, “The conditions that have been presented are acceptable to my client. A couple of things that were mentioned that have spurred me to want to come up here and tell you what happened at the Planning Board meeting. First of all, there was some implication that there was collusion between the staff and my client to get the project passed. That is the farthest thing from the truth. My client came up with the plan. You don’t just come to the Planning Board and say here is my plan. You take your plan to the staff. You get the staff to say, “These are the holes in it; you’re not going to get this passed; we can’t recommend this; this is what you’ve got to do.” Not just for this developer; anybody who brings a project to the beach is going to go through that process. It would be a total waste of the elected board’s time for us to come in here with a project that you will say “It doesn’t meet the code; we’ll table it until next month.” There were discussions. We had Tony (Wilson), Tim (Owens) and the fire marshal and everybody we could think of come in and look at what we had and tell us what was wrong with it. They didn’t give us a vote of confidence; they didn’t say, “We’re going to approve this plan if you do these things.” They told us what we needed to do to get to this hearing. Commercial: my client went before the Planning Board; 3-3 vote; took a step back and said we will do a commercial component. This is where it will work. It won’t work anywhere else. We’re going to do a commercial component right there at the ramp going to the pier. We did the square-foot calculations and with the patio area, it came up to 8%. We were talking 4.2% under roof, heating and air conditioning; 8% if you’re looking at a patio area which could be used. When we wrote the ordinance and we had these discussions with Mr. MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 28

Wessell, we proposed up to 15%. The comment was this was a primarily residential development and we want you to be able to use the commercial that you’re planning but we don’t want to have a whole bunch more in this group housing district. It doesn’t mean we’re saying there’s no commercial anywhere. But for this group housing – not group commercial – group housing district, we’re going to have a commercial component that’s allowed up to 10%. I said that was fine; that will meet our needs. So, I don’t want there to be any implication that Mr. Wessell has driven this bus or that I am throwing you under the bus. This is coming up from us. We’ve had input from the Town staff. We’ve had input from the Town Attorney because we wanted to make sure that this town ordinance is going to comply with the state law and going to be acceptable to this Board. I would appreciate it if you would consider our application and approve based on what we’ve submitted.”

Mayor Blair closed the public hearing at 8:20 p.m.

Mayor Blair said, “In referencing to the CAMA Land Use Plan, it has been a good document as a guideline for what we need to do at this beach and whatever circumstances come up. Almost every single project, whether it be residential or commercial on this beach has had to have a text amendment for some kind of change to it because we simply have run out of good clean places to build houses and commercial property without making the adjustments to meet the CAMA Land Use Plan to make it all work. We’re 99% built out. To the height questions, the floodplain maps have raised the height a few feet. But I don’t think it has materially changed what we do here. We could give two feet; we could make that difference. We can go 60 feet but I can tell you that if you go around the Town, people still kind of hold on to this notion that height is a bad thing. How you overcome that, I don’t know. All of us on this beach would like to have better services and more commercial, but I think the reality is at this particular location, this developer has added some commercial space per the request that has come through the Planning Board process. Even if you had a bigger piece, you don’t have the infrastructure; you don’t have the parking. It’s not going to happen on that piece of property. I have to give these guys credit for trying to work within the Town to try to make something that has never been built on this site. I have talked with residents all around that area; people want it. Whether it is a CAMA Land Use Plan or whether it meets the height or all the things we do, we’re here to try to provide the best thing we can for the greatest amount of residents. I listen to what people want. I think there’s a good case to be made that this project meets a lot of people’s needs. I think we all want the same thing. The one thing I don’t think Wrightsville Beach needs to miss is an opportunity for a piece of property to have a project put in that I think benefits the beach. So, I’m in favor of the project with the 10% word change.”

Mayor Pro Tem Mills said, “I have talked to any number of developers, builders, and entrepreneurs and, while the height situation is a consideration, the main drawback that I am told over and over is that there is not a market for any typical, normal retailer to go down there. It will just die on the vine and we will end up with the situation that we have now that the only thing that works will be another bar and I am not in favor of another bar at Wrightsville Beach. Parking is an issue for retail; it’s not there. Probably the most overriding issue is cost. These gentlemen have come up with a project that will work and they are willing to put their money on the line. We haven’t MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 29 had that. We’ve got an opportunity to approve something I think will take the beach in the right direction. Now, about turning into a bedroom community, we have businesses that will operate regardless of what goes on at this site. I think it’s a good project and I support it.”

Aldermen Weeks said, “I have come full circle; I got involved in politics ten years ago because the Pizza Hut was rezoned from commercial to residential. I struggle with a text amendment for group housing; it just flies against the reason I ran and got encouraged to run because of the trend we saw. I felt like mixed use was viable. In most other communities, the commercial subsidizes the residential but it is quite the opposite here. Our seasons are getting longer which helps the businesses. More importantly, I talked to my neighbors and my constituents and they are very concerned about what is going on across the bridge. They want to see more amenities on this side of the bridge. I’m really struggling with 4% commercial. I totally support Seagull having a hundred percent residential but I feel like Salisbury at least deserves a mixed-use component with more than 4%.”

Alderman King said, “I agree that this project has tried. It has come before us several times and they have gone back to the drawing board each time. This time, it has come forward with something that is positive. I heard what was mentioned about the building height but that is not the issue before us right now; it’s this project. And, I understand your feeling about the commercial; I don’t want to be a bedroom community. But, I want this area to clean up and I think this is good. It went before the Planning Board the first time and it was 3-3; then it went back and it was voted 6-0 positively. So, the Planning Board is for it; the neighborhood is for it. It is a positive entity and I think the developers have worked hard to make this project fit in all the parameters that we gave them. I am for it.”

Alderman Miller said, “I commend you for bringing this project. I am in the business and it is a tough place to be. There are a lot of people here; there are a lot of people here in the summer; there are a lot of people that want to be on the beach but they don’t necessarily want to shop. We had a major grocery store that wanted to be on Wrightsville Beach but the last thing they wanted to look at was the end of a major highway. It’s just not a good spot and mainly because of the parking. I don’t want to become a bedroom community either but I think this site lends itself to the development that we’ve got before us and that’s why somebody has brought it to us because it makes economic sense.”

Mr. Owens said, “We need to go back to the prior agenda item and consider that text amendment and then come back to the conditional use permit.” Mayor Pro Tem Mills made the motion to adopt Ordinance No. (2017) 1771 and the associated Statement of Consistency. The motion was seconded by Alderman King and approved with a vote of 4-1. (Nay vote by Alderman Weeks)

Mayor Pro Tem Mills made the motion to approve the conditional use permit for group housing at 19 Salisbury Street and add to that the conditions that the staff has recommended that are detailed on the sheets. The motion was seconded by Alderman King and approved with a vote of 4-1. (Nay by Alderman Weeks)

The meeting was Recessed at 8:35 p.m. and reconvened at 8:40 pm MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 30

DISCUSSION AND DIRECTION ON CURBSIDE RECYCLING RFP.

Mr. Owens said, “We were going to send out an RFP and Mr. Wessell got different advice from the School of Government. As per the General Statutes, people ‘can’ opt out of the program and you don’t have to put your recyclables in a recycling bin. We tried to figure out how to accomplish having curbside recycling. There are several options: one would be for the Town to have a franchise and have that franchisee come in and provide the service directly to the individuals. The second option would be to solicit for bids again and whatever the shortfall was, we would absorb that in our budget and they would come in and take over the service and do it individually. The third option would be to have the entire cost of curbside come from the ad valorem tax base. We have about 1,640 residential solid waste carts. We anticipate the cost to be about $100,000 each year but we estimate about $45,000 in deductions to tipping fees because of 25% reduction entering the waste stream. So, the gross cost would be about $50,000 per year. I would recommend going ahead and place it out to bid, going under the guise that we’re going to be absorbing this. Then bring that back to the Board to decide what to do. Moving forward under that scenario, we would have 1,640 carts and we would distribute those. If anybody didn’t want to participate in the program, they could always turn their cart back in and we would have to absorb the cost. After talking with the School of Government, we felt like the only route was to absorb it in our current budget process.” When asked if the RFP would include rollback service, Mr. Owens replied, “Yes.” When asked if that would be billable, Mr. Owens said it would. Alderman Weeks said, “Is it possible to put the RFP out with three tiers in case, down the road, we wanted to adjust the contract? My thought is for the first year to roll it out as a trial to give everybody that has cart service a recycling cart and get a clearer percentage of what the reduction in the landfill trash stream is. I think it is going to be higher than 25%. Then after that year, you give people the option to opt out.”

Mr. Wessell said, “After speaking with folks at the School of Government and a lawyer from Waste Industries, they all came to the same conclusion that you cannot make it mandatory. It does not seem like it is permissible under the existing law.” Alderman Weeks said, “That’s why I thought the first year, the Town would absorb the cost to do a trial to see what the reduction in landfill volume would be to see what that actual savings would be. Then the second year, the people that want to opt out could opt out; that’s why you go to that tiered quote for volume.” Mayor Blair suggested putting out the RFP and picking a vendor to come in and talk to us about it. Mr. Owens said maybe, at some point if the law catches up, we could have a charge. He said, “The RFP (without three tiers) is ready to go out next week to three viable vendors: Waste Industries, Waste Management and Pink Trash. We will need to add more time for the holidays.” There was Board consensus to do that.

CONSIDERATION OF ADOPTING RESOLUTION NO. (2017) 2045 ALLOWING THE TOWN TO EXEMPT ITSELF FOR THE RFQ PROCESS OUTLINED IN N.C.G.S. 143- 64.31 FOR THE HIRING OF ARCHITECTS, ENGINEERS AND SURVEYORS FOR THE RENOVATION OF LIFT STATION 4.

Mr. Owens said, “We have money in the budget to look at designing Lift Station #4 similar to Lift Station #5. I’m asking you to adopt Resolution No. (2017) 2045 that allows us to move forward with negotiation with SEPI Engineering. That contract will MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 31 come back to the Board and will be reviewed by the town attorney.” Mayor Pro Tem Mills made the motion to adopt Resolution No. (2017) 2045. The motion was seconded by Alderman Miller and unanimously approved.

DISCUSSION AND DIRECTION REGARDING REQUESTING THAT THE USCG AND NCDOT CONSIDER CHANGES TO THE BRIDGE OPENING SCHEDULE.

Mr. Owens said, “We talked about this during construction when we had the two years through the summer; we talked about modifying the bridge schedule. They did modify it some. But there is a process you go through. I called the U.S. Coast Guard folks in Virginia Beach, they are over the bridges and they told me to have the Mayor write a letter and request a change to the opening and closing schedule and they will give us the process for that. Hopefully, someone will come talk to us and give us guidance on it. I am asking you to consider allowing us to write a letter and have the Mayor sign it and send it to the U.S. Coast Guard.” There was Board consensus to send the letter.

DISCUSSION AND DIRECTION ON AWARDING A CONTRACT FOR SEWER LINE CLEANING.

Public Works Director Bill Squires said, “Under the streets of Wrightsville Beach are approximately 8,300 linear feet or 15.7 miles of pipeline in our wastewater collection system. Each year, we are required to clean and inspect a minimum of 10% of that. Hydrostructures Utility Consulting from Pittsboro, North Carolina was the low bidder at $20,000. We have $25,000 allocated in the Fiscal Year 17-18 Budget for this project. We are seeking approval to proceed to contract with Hydrostructures Utility Consulting.” When asked if he was familiar with the contractor, Mr. Squires said they were a new contractor with us but they seem like a pretty good company. He noted that they would have to video everything they do. There was Board consensus to proceed with drafting a contract with Hydrostructures Utility Consulting and having the work done.

2017 GRAVITY SEWER CLEANING AND VIDEO BID TABULATION Bypass Cleaning Video Company Mobilization Pumping Per Foot* Per Foot* Cleaning Video Total Porter Scientific $ 980 $1.33 $0.88 $13,300 $ 8,800 $23,080 Southeast Pipe $4,500 $2,730 $2.50 $25,000 $32,230 Pumpview Tech. $ 0 $1.15 $1.15 $11,500 $11,500 $23,000 Bio-Nomic $1.15 $1.15 $11,500 $11,500 $23,000 PCI, Inc. $ 649 $1.06 $1.18 $10,600 $11,800 $23,049 TransState $2,500 $1.75 $1.20 $17,500 $12,000 $32,000 HydroStructures $3,000 $0.85 $0.85 $ 8,500 $ 8,500 $20,000

CONSIDER SETTING DATES FOR THE FOLLOWING: 1) FOR THE BOARD TO MEET WITH PROSPECTIVE BOARD AND COMMITTEE MEMBERS; 2) FOR A JOINT WORKSHOP WITH THE WATER AD HOC COMMITTEE TO REVIEW FINDINGS OF THE WATER SUPPLY / SYSTEM-WIDE CONDITION ASSESSMENT AND ASSET VALUATION DETERMINATION STUDY; AND 3) FOR THE BOARD’S RETREAT.

Mr. Owens said, “We usually have a “meet and greet” to meet applicants for the various boards and committees in December prior to the January meeting when appointments will be made. We will advertise for all of the advisory board vacancies MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 32 beginning next week.” There was Board consensus to set the ‘meet and greet’ for Thursday, December 14th, just prior to the regular Board meeting and to proceed with advertising. Mr. Owens said, “We want to get back on track with our Water Ad Hoc Committee. We are looking at the week of your Board meeting, January 8th, 9th or 10th.” Following a brief discussion, Mr. Owens said he would keep Tuesday, January 9th as the date but save Monday, January 8th as an alternate date, if needed.” A brief discussion followed regarding possible retreat dates. There was Board consensus for Mr. Owens to: 1) send out a doodle poll with possible dates; 2) only look at weekdays; and 3) send only three dates from which to choose.

MAYOR BLAIR: REPORTS AND COMMENTS.

• Attended a TDA Meeting: Room Occupancy Tax was down a month and up a month. It was an uneventful meeting.

ALDERMAN WEEKS: REPORTS AND COMMENTS.

• Alderman Weeks asked for an update on the Coral Drive Sidewalk Project. Mr. Owens said we were still working on the plans and still on schedule for the summer of next year.

• Alderman Weeks asked for an update on the Harbor Island Floodplain Maps. Mr. Wilson said it would probably be May or June of 2018.

• Alderman Weeks thanked Public Works for conducting the recent yard debris disposal project.

ALDERMAN MILLER: REPORTS AND COMMENTS.

• The MPO finally sat Mr. King’s committee. He thanked everyone for coming out to the election and for their support.

MAYOR PRO TEM MILLS: REPORTS AND COMMENTS.

• Funding was secured for our next coastal storm management nourishment. The contract was awarded to Weeks Marine.

MR. OWENS: REPORTS AND COMMENTS.

• The NC Department of Transportation may hold a public hearing in December for bridge-related issues.

MS. HOLLEMAN: REPORTS AND COMMENTS.

• She thanked everyone for coming to the Clerk of the Year Tree Dedication on November 3rd and expressed appreciation for that great honor.

REQUEST FOR CLOSED SESSION FOR DISCUSSION WITH THE TOWN ATTORNEY PURSUANT TO G.S. 143.318.11.

Mr. Wessell expressed the need for a Closed Session to discuss several pending issues. Mayor Pro Tem Mills made the motion at 9:02 p.m. to go into Closed Session for discussion with the Town Attorney. The motion was seconded by Alderman Miller and unanimously approved.

MINUTES – BOARD OF ALDERMEN NOVEMBER 9, 2017 – PAGE 33

MEETING RECONVENED.

Mayor Blair reconvened the regular meeting at 9:21 p.m. and asked the record to reflect that the Closed Session had been held for the reason so stated with no action taken.

THERE BEING NO FURTHER BUSINESS TO COME BEFORE THE BOARD, THE MEETING WAS ADJOURNED AT 9:21 P.M.

Respectfully submitted,

Sylvia J. Holleman Town Clerk