2020-07-13 Regular Meeting
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 592
ASSEMBLY
The New Hanover County Board of Commissioners met in Regular Session on Monday, July 13, 2020, at 4:00
p.m. in the Assembly Room of the New Hanover County Courthouse, 24 North Third Street, Wilmington, North
Carolina.
Members present: Chair Julia Olson-Boseman; Vice-Chair Patricia Kusek; Commissioner Jonathan Barfield,
Jr.; Commissioner Woody White; and Commissioner Rob Zapple.
Staff present: County Manager Chris Coudriet; County Attorney Wanda M. Copley; and Clerk to the Board
Kymberleigh G. Crowell.
INVOCATION AND PLEDGE OF ALLEGIANCE
Pastor Reddgo Long, Jr., Greater Morning Star Apostolic Church, provided the invocation and Commissioner
White led the audience in the Pledge of Allegiance to the Flag.
APPROVAL OF CONSENT AGENDA
Chair Olson-Boseman stated that she was removing Consent Item #2 Adoption of Resolution, Racism: A
Public Health Crisis for further discussion and consideration. She asked for a motion to approve the remaining items
on the Consent Agenda as presented.
Motion: Commissioner Zapple MOVED, SECONDED by Commissioner Barfield, to approve the remaining items on
the Consent Agenda as presented. Upon vote, the MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA
Approval of Minutes – Governing Body
The Commissioners approved the minutes of the Regular Meeting of June 15, 2020 and the Special Meeting
of June 22, 2020.
Award of New Hanover County Fire Station 12 Hurricane Florence Repairs and Renovations Contract – Property
Management
The Commissioners approved the award of a construction contract to Sexton Construction Coastal LLC for
Hurricane Florence repairs and renovations to Fire Station 12 located at 3805 Highway 421 North. A Request for Bids
th
was advertised on May 18, 2020. On Tuesday, June 16, bids were received by four interested contractors and
Sexton Construction Coastal LLC was identified as the apparent low bidder. The architect has since certified the bids
and followed up with a recommendation to award to Sexton Construction Coastal LLC. The base bid is $569,000 with
an add alternate for quartz countertops at $2,000. The total contract amount would be $571,000 and the project
will take 180 days to complete.
Charge of 2020 Levy – Tax
The Commissioners approved the 2020 Charge of Levy to the Tax Collector pursuant to North Carolina
General Statues 105-321(b).
A copy of the charge is hereby incorporated as part of the minutes and is contained in Exhibit Book XLII,
Page 14.2.
Approval of May 2020 Tax Collection Reports – Tax Department
The Commissioners accepted the Tax Collection Reports of New Hanover County, New Hanover County
Debt Service, and New Hanover County Fire District as of May 2020.
Copies of the tax collection reports are hereby incorporated as part of the minutes and are contained in
Exhibit Book XLII, Page 14.3.
Discussion and Adoption of Resolution, Racism: A Public Health Crisis – Governing Body
Chair Olson-Boseman read the resolution into the record and made a motion to approve the resolution.
Motion: Chair Olson-Boseman MOVED, SECONDED by Commissioner Barfield, to approve the resolution as
presented.
Chair Olson-Boseman opened the floor for Board discussion.
Commissioner Barfield stated he is glad to see this matter on the agenda. Over the last few months, many
things have happened in our country that has on the one hand divided, but on the other hand, united. Americans
across our country recognize that we all need to stand together, work together, fight together, live together, and
love together. Racism has been in this country for so very long, going back to the days of slavery until now and even
last week as the Wilmington Police Department Police Chief witnessed three of his officers making disparaging racial
comments about him and others within his force and in the judicial system. It is important to recognize that many
are suffering and hurting and that it does have a negative effect on individuals that have been discriminated against
through racism. When looking at the realigning in this community when it comes to the lack of grocery stores on the
north side, stores decide based on demographics where a store will go and if it will be profitable for them. There are
individuals that cannot access quality and nutritious foods as opposed to stores like Dollar General and Family Dollar
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 593
that may have package goods, but not the things that will sustain a person long-term. He is glad that in 2020 this
Board is standing firm with others to recognize the original sin, racism, should be eradicated and it will do everything
that it can to make that happen.
Commissioner White stated racism is abhorrent on every level and he cannot believe that has to be said in
2020. Being a racist is an ideation held primarily by the chronically ignorant. Racism is not a public health crisis. What
has happened over the last six to eight weeks in the nation and how it has in a small way manifested itself in this
community is awful and tends to indicate that there are a lot of racists in our community. He thinks a reflection on
history is pertinent right now. There are racists in our community, but the vast majority of white people are not
racists. There is not a Commissioner on this bench that harbors any racism in the policies they advocate or the things
that they work hard to achieve. What he would like to be discussed more as a community is the positive history we
have of being ahead of the curve in this community for race relations. In 1978, this County elected countywide an
African-American sheriff, Joe McQueen who went on to be reelected. In 1980, this County elected Commissioner
Barfield’s father, Joe Barfield, countywide. The community has gone on to elect Thomas Wright to the NC House,
Oscar Graham and Nick Rhodes to the school board, Luther Jordan to the NC Senate, Phyllis Gorham to both the
District and Superior Court benches, and our Senior Resident Superior Court Judge held the title until he retired,
Ernest Fullwood. We have a very proud history in this community in recent decades that rebuts and distinguishes us
from the awful abhorrent history we have from a century and a quarter ago. However, it seems that the word racism
is used to describe virtually every disagreement of thought that people have and he cannot support that. He has sat
next to African-American defendants in the courthouse multiple times, where he has had all white juries acquit his
clients, finding them not guilty when the system was trying to incarcerate them. He has had the same thing happen
by white judges with African-American defendants and by black judges with white defendants. This is a loving and
fair and just community that still has a long way to go with race relations, undoubtedly. In the eight years that he
has been a Commissioner, he can say unequivocally without any hesitation that he has advocated for and succeeded
in achieving more funding, more policies, more programs, and more help to bridge the health inequities that exist.
The next item on the agenda is about whether or not to sell our hospital. The health inequities that exist in food
deserts, afterschool care, transportation, and access, were the driving force to the entire conversation with whether
or not to make a change with our county-owned hospital. Nobody declared racism as the cause for furthering that
conversation. He abhors racism and as he said in the beginning, it is sad that we even have to say that in this day
and age, but he does not support classifying it as a public health crisis and will not vote for the resolution.
Vice-Chair Kusek stated that personally, she does not really see what resolutions accomplish as they are a
band-aid on a problem that needs a tourniquet. This one does not go far enough and resolutions are not going to
get the job done. She would love to have all of the stakeholders at many tables together to discuss and brainstorm
real positive solutions that will be of benefit to everyone in this community. A rising tide lifts all boats. Our problems
did not begin yesterday and they are not going to be solved tomorrow. We need to work together for positive change
and create a more peaceful world for everyone and she does not believe that resolutions go far enough to do that.
Commissioner Zapple stated that he sees this resolution as a simple restatement of some of the basic
tenants that we all live by in our community. At times based on what has been experienced over the last six weeks,
it becomes necessary to stand up and say out loud once again some basic truths. He believes that this resolution
encompasses that and stands in support of it.
Hearing no further discussion, Chair Olson-Boseman asked for direction from the Board on the motion on
the floor. Upon vote, the MOTION PASSED 3 – 2. Vice-Chair Kusek and Commissioner White dissenting.
A copy of the resolution is hereby incorporated as part of the minutes and is contained in Exhibit Book XLII,
Page 14.1.
Discussion and Approval of Additional Item of Business to Rename Hugh MacRae Park to Long Leaf Park –
Governing Body
Commissioner Barfield stated that it is interesting to have the prior item ahead of what he wanted to
discuss, which is Hugh MacRae Park. There has been a lot of conversation over the last several years about the park
name and what it symbolizes and means. There have been a lot of marches and demonstrations in our community
over the last 30-days, talking about monuments, parks, and names. For him, it is interesting that about a week to
two weeks ago, he received a call from Meg MacRae, great granddaughter of Hugh MacRae, to discuss how she felt
it was time to change the name of the park and her family history. It is known her brother, Hugh MacRae, III, has
expressed the same sentiments. Both have publicly shared their thoughts and concerns about the name of the park
and their desire to work with the community to change it to another name that will cause healing in our community.
What we are looking at in our community is really a new landscape, moving forward in healing, in bringing everyone
together, and making sure that everyone has equity in the decisions that are made in our community. He then stated
he would make a motion to rename Hugh MacRae Park to Long Leaf Park.
Motion: Commissioner Barfield MOVED, SECONDED by Commissioner Zapple to rename Hugh MacRae park to Long
Leaf Park.
Chair Olson-Boseman opened the floor for Board discussion.
Vice-Chair Kusek stated that she believes at the last meeting, the Board asked that the newly formed Office
of Diversity, Inclusion, and Equity take this matter up whenever a permanent person was in place. Again, she believes
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that this needs more than just “Let’s just do it”. Conversations are needed with everyone who is involved in the
community.
Commissioner Zapple stated that timing is everything and he believes it is time within this community to
take this action. The person being hired for the Office of Diversity, Inclusion, and Equity will not be in place until
possibly September. The time for action is now and he supports the motion.
Commissioner White stated he does not want to support the motion today, but he thinks he would want to
support it ultimately. When he got out of law school for the first year, he researched titles and performed real estate
closings and some of that work was done in Bladen County. His mentor who trained him, Mr. Worth-Hester, would
have him research titles back 100-150 years when only 30 years back had to be researched for title insurance. This
was 25 years ago when you had to go to the courthouse and pull down the actual title books to do the research.
During one search, he found a deed that had a racial restriction that said a piece of property shall never be conveyed
to a person and did not use the phrase African-American, it used another race phrase. He could not believe it, he
had never heard that in being a history major in college and neither during his real property class at the University
of Nebraska. He was unaware those were common restrictions on deeds and asked his mentor about it who said it
used to be on everything, every segregated community in the south had one of those in their deeds. It was an
abhorrent realization to him 25 years ago and he learned later that those were common deed restrictions throughout
the United States of America. In northern California, it is common with Asian, with Muslim, with other pejorative
phrases to describe minority races that are not African-American. He does not know the MacRae family, he may
have met Hugh MacRae, III once or twice, did not know his father nor grandfather so he has nothing to do to defend
the MacRae family. They should be defending themselves if they feel that it is worth doing. It does not matter to him
whether the park is named Hugh MacRae Park or not, but what matters to him is the reactionary way this
deliberative body sometimes adopt or take action. He thinks that it is a dangerous precedent to set, to judge people
in history by our standards and we are doing it with more ease every single day. There is not a person that has lived
that's on a statue or a monument or in a park or that has been a president, congressman or whoever that has not
done something, has not been a sinner. Some have asked for forgiveness for their sins, others have not. We have no
way of knowing if these men and some women have ever asked for forgiveness from their heavenly father or from
their community, we do not know that. Here we are, sitting 100-plus years later, to judge some man that none of us
knew for a legacy that part of his life was abhorrent and he thinks it is a slippery slope to start doing that. His personal
view is related to statues, parks, road names, etc. and that they be looked at individually. If a person wants to find
things that Abraham Lincoln said that were completely abhorrent to our present day contemporary standards, they
can be found. If a person wants to find things that Jesus Christ said in the 33 years he lived, they can be found. Hugh
MacRae is no exception to that from what he understands. To him, to make a decision in the midst of a national
furor over justifiably an awful situation that happened in Minneapolis, is a mistake. It is reactionary and it is an
abdication of what Commissioners are supposed to do, which is to be a deliberative body and think through and
respect a process of evaluating whether or not we should change names, rename streets, take down statues. He
concluded his comments stating that he may very well support and ultimately would vote to rename it Long Leaf
Pine Park, MacRae Park, or some other name. He thinks doing it now is the wrong time and timing is not everything.
Timing often makes one fall into the trap of thinking that they are doing something that is right when it might not
be the right thing to do. While he would like to support Commissioner Barfield’s motion, with all due respect, he
cannot support it today.
Hearing no further discussion, Chair Olson-Boseman called for a vote on the motion on the floor. Upon vote,
the MOTION PASSED 3 – 2. Vice-Chair Kusek and Commissioner White dissenting.
REGULAR ITEMS OF BUSINESS
Chair Olson-Boseman announced that Regular Agenda Item #8 Rezoning Request (Z19-12) – Request by
Design Solutions on Behalf of the Property Owner, Raiford G. Trask Jr. Rev Trust, to Rezone Approximately 10.35
Acres of Land Located North of the 3300 Block of Paramount Way in the Northchase Planned Development, and
South of Interstate 140, from O&I, Office and Institutional District, and R-15 Residential District, to R-5, Moderate-
High Residential District, was withdrawn from the agenda by the petitioner and would not be heard during this
meeting.
CONSIDERATION OF PARTNERSHIP ADVISORY GROUP RECOMMENDATION AND ADOPTION OF A RESOLUTION
APPROVING THE LETTER OF INTENT BETWEEN NEW HANOVER COUNTY, NEW HANOVER REGIONAL MEDICAL
CENTER, AND NOVANT HEALTH
Partnership Advisory Group (PAG) Co-Chair Spence Broadhurst stated he, along with Co-Chair Barb Biehner,
Vice Co-Chairs Bill Cameron and Dr. Joe Pino, PAG members New Hanover Regional Medical Center (NHRMC) Board
of Trustees Chair Jason Thompson, NHRMC President and CEO John Gizdic, County Manager Coudriet, Dr. Rob
Shakar, and Hannah Gage are present to provide the presentation on the PAG recommendation. Mr. Broadhurst
started the presentation highlighting the following information:
New Hanover Regional Medical Center (NHRMC) Partnership Exploration:
Background:
July 23, 2019: Announced intention to explore partnership options
Sept. 16, 2019: Board of Commissioners adopts resolution to move forward
Oct. 29, 2019: Partnership Advisory Group (PAG) begins meeting to review status quo,
reorganization (SystemCo) and develop RFP
Jan. 9, 2020: RFP approved
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REGULAR MEETING, JULY 13, 2020 PAGE 595
March 2020: Six proposals received, later narrowed to three
May-June 2020: Site visits and due diligence
July 2, 2020: Unanimous vote by PAG to recommend partnership with Novant Health, UNC
Health, and UNC School of Medicine
July 7, 2020: NHRMC Board of Trustees approves PAG recommendation and votes to proceed
with Letter of Intent (LOI)
Co-Chair Biehner provided an overview of the evaluation performed by the PAG and the 18 Key
Performance Elements (KPEs) that were divided into ten areas of improving access to care and wellness, advancing
value, achieving health equity, supporting our staff, partnering with providers, driving quality of care throughout the
continuum, growing the level and scope of care, investing to ensure the long-term financial security, strategic
positioning, and governance. Through the evaluation, the ten areas and associated KPEs were used in the evaluation
of partnership, status quo, and SystemCo:
Evaluation of Partnership, Status Quo, and SystemCo:
PAG scoring of Proposals:
Co-Chair Broadhurst stated read the following recommendation into the record:
Partnership Advisory Group Recommendation:
1: That each Board approves moving forward with negotiating a Letter of Intent for a proposed
full strategic partnership as we, the PAG, believe this step preferable to continuing status quo
or pursuing internal restructuring (SystemCo) or another independent or joint venture model
at this time; and
2: That each Board approves focusing such Letter of Intent negotiations with Novant Health
as the PAG's recommended first choice of partner, with its solid proposal and intended
partnership with UNC Health and the University of North Carolina School of Medicine to
enhance clinical services and medical education in this region.
Joe Kahn, attorney with Hall Render, stated that he has had the pleasure and opportunity to work with the
PAG, NHRMC staff, and County staff for the last year on this process. His office is based out of Raleigh, NC and all he
handles is healthcare law with particular focus on hospitals (governmental and non-profit), primarily both within the
state and around the country. He provided an overview of the Letter of Intent highlighting the following:
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REGULAR MEETING, JULY 13, 2020 PAGE 596
Letter of Intent (LOI):
Binding versus Non-Binding Provisions:
As is customary, Key Non-Binding Terms include:
Transaction Structure
Purchase Price and Financial Commitments
Covenants
Risk Allocation and Indemnity
Break Fee
As is customary, Key Binding Terms Include:
Term of LOI (expires October 31, 2020), which includes commitment not to negotiate
with any party other than Novant through such date
Covenants to Use Good Faith Efforts
Confidentiality
Responsibility for expenses
LOI Summary: Transaction Overview:
Asset Purchase pursuant to which Novant will acquire all assets of the Hospital and its
associated practices, clinics, and facilities; certain real property; and certain equity
interests in subsidiaries and joint ventures, except for certain Excluded Assets:
Excluded Assets: Cash, cash equivalents, and investments; certain privileged
materials; restricted funds; cost report settlements; and others to be identified
Assumed Liabilities: Novant will assume certain liabilities of the Sellers, including:
liabilities arising post-Closing with respect to purchased assets; current liabilities
included in net working capital (including paid time off obligations), and others to be
identified
Excluded Liabilities: Certain liabilities are excluded and will remain with Sellers,
including: debts, guarantees, swaps, etc.; pension or supplemental retirement plan
obligations; liabilities related to applicable COVID-19 governmental relief plans; and
others to be identified
LOI Summary: Risk Allocation and Remedies:
Representations and Warranties:
Most of the Sellers’ reps and warranties would expire at Closing (meaning, no trailing
liability for any inaccuracy or breach post-Closing)
Certain limited “Fundamental Reps” (e.g., good standing, due authority, no conflict,
title to assets, and no brokers) will survive 10 years post-Closing
Representations and Warranties (R&W) Policy:
Novant has the option to (i) obtain a representations and warranties insurance policy
(“R&W Policy”) or (ii) self-insure
The R&W Policy (or self-insurance) would be Novant’s sole and exclusive remedy for a
breach or inaccuracy of Sellers’ reps/warranties (other than Fundamental Reps and
Excluded Liabilities)
Novant will have no recourse with respect to reps/warranties (other than
Fundamental Reps and Excluded Liabilities) if Novant does not get the R&W Policy
Novant and Sellers will each be responsible for half of the retention (deductible) under
any R&W Policy, with Novant covering first half
Escrow:
At closing, $100 million of the purchase price will be placed in an escrow account for
a period of two years (“Escrow Amount”)
Novant’s sole and exclusive remedy for losses arising under the Fundamental Reps or
Excluded Liabilities would be a disbursement from the Escrow Amount
Repatriation:
Certain egregious uncured material breaches of Novant’s covenants under the
Purchase Agreement would trigger the County’s right to repurchase the transferred
assets – only triggered in “worst case scenarios”, not for “simple” breaches
LOI Summary: Closing Terms and Break Fee:
Signing/Closing:
Commitment to assist Novant in customary due diligence
Parties to use good faith, commercially reasonable efforts to execute definitive
documents by October 31, 2020
Targeted Closing Date: within 180 days after signing definitive documents
Break Fee:
Mutual $15 million break fee payable upon an uncured material breach of the
Purchase Agreement that results in termination of the Purchase Agreement
Cannot be paid by one party for another (i.e., the County cannot pay the break fee
on behalf of NHRMC, or vice versa)
Mr. Kahn stated that his understanding is there has been further discussion on the break fee and it may be
set at $25 million, which is subject to the discretion of this Board. However, he can represent that his understanding
is that NHRMC and Novant Health are agreeable to the change.
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REGULAR MEETING, JULY 13, 2020 PAGE 597
LOI Summary: Purchase Price and Other Financial Commitments:
Purchase Price:
$1.5 billion paid at Closing, subject to customary adjustments, including adjustments
based on Net Working Capital and Escrow Amount
Additional Contributions to be Made by Novant:
$50 million contribution to the Hospital Foundation
Contribution of Novant Health Brunswick Medical Center to the operations of
NHRMC – to be subject to customary approvals and post-Closing governance of local
Board
Additional Funding Commitments:
$600 million to fund routine capital expenditures in the 10 years following Closing
$2.5 billion to fund strategic capital expenditures following Closing, including (i) the
projects set forth in NHRMC’s Strategic Master Plan, (ii) other strategic capital
projects to be approved by the local Board, and (iii) other projects to be identified in
the definitive documents
LOI Summary: Improving Access to Care and Wellness:
Continuation of Services:
Commitment to use commercially reasonable efforts to ensure continuation of
services at current scope and level for no less than 10 years following Closing
Investment in Pender Memorial Hospital (“Pender”):
Commitment to use commercially reasonable efforts to ensure continued
maintenance and development of arrangement with Pender for no less than three
(3) years following Closing, including assumption of current Management Services
Agreement
Telemedicine Infrastructure and Support:
Commitment to use commercially reasonable efforts to integrate telemedicine
platform, including reimbursement support, within 18 months following Closing
Price Transparency Tools:
Commitment to use commercially reasonable efforts to provide existing price
transparency tools and facilitate implementation of such tools within the Hospitals
and Business
LOI Summary: Advancing the Value of Care:
Value-Based Contracting:
Commitment to use commercially reasonable efforts to:
Apply health plan and value-based contracting expertise to NHRMC’s value-
based care strategy
Provide access to health plans owned by Novant Health
NHRMC Medicare Advantage Plan:
Commitment to assume and use commercially reasonable efforts to develop
NHRMC’s existing Medicare Advantage plan and operate the Business in accordance
with NHRMC’s Medicare Advantage strategy
Patient Satisfaction Programs:
Commitment to use commercially reasonable efforts to provide access to Novant
Health’s patient satisfaction programs and resources within 18 months following
Closing
Commitment to use reasonable best efforts to position and maintain NHRMC in top
10% national for patient satisfaction
LOI Summary: Promoting Health Equity:
Prohibition on Liens and Wage Garnishment:
Commitment to not use any extraordinary debt collection practices, including liens
on an individual’s primary residence or real property and garnishing of wages
Community Outreach Programs and Partnerships:
Commitment to expand and enhance community outreach and engagement beyond
historical levels and scope
Adoption, termination, or amendment of any policies and procedures related to
community outreach programs and social service partnerships are subject to
approval of the local Board for five (5) years following Closing
Social Determinants of Health:
Commitment to expand and enhance efforts to identify social determinants of health
and impacts in the Service Area
Commitment to develop and implement strategies to address and mitigate impacts
of such determinants, including monitoring and evaluation of such strategies
LOI Summary: Supporting and Maintaining Staff:
Employee Retention:
Commitment to employ and retain all NHRMC employees at current position, title,
and salary for minimum of 24 months following Closing
Any subsequent reduction in force subject to local Board approval
Enhanced Compensation and Benefits:
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REGULAR MEETING, JULY 13, 2020 PAGE 598
Commitment to provide comprehensive and competitive wage benefits package at
least comparable to NHRMC’s current package, including recognition of employee
length of service for benefits vesting and honoring of any employment agreement
material terms, for a minimum of three (3) years following Closing
Diversity Hiring Resources:
Commitment to further develop policies and programs regarding diversity, including
access to Novant Health’s diversity-related tools and resources
Leadership Training and Education:
Commitment to ensure all hired employees are eligible to participate in career and
leadership development programs offered by Novant Health
LOI Summary: Graduate Medical Education and UNC Academic Affiliation:
Graduate Medical Education:
Commitment to assume and maintain academic affiliation with UNC School of
Medicine, including maintenance and development of residency and fellowship
programs
Proposed exclusive, long-term clinical affiliation between UNC Health, UNC School of
Medicine and Novant Health, including following commitments:
Appointments in UNC School of Medicine, for Wilmington-based faculty
Development of inter-professional education expansion envisioning Wilmington
as a branch campus model for each UNC health profession school
Children’s clinical service-line partnership at Novant-affiliated sites in New
Hanover and adjacent counties
Collaboration on clinical trials and population health studies
Financial commitments from UNC Health and UNC School of Medicine to support
expanded medical education programs
LOI Summary: Partnering with Providers:
Medical Staff:
Commitment to ensure medical staffs at the Hospitals will remain substantially
unchanged and open
Continued oversight of (i) privileges held by existing medical staff members, (ii)
existing medical staff bylaws, or (iii) agreements with medical staff members (so long
as compliant with applicable law)
Maintenance of Provider Arrangements:
Commitment to assume and keep in place all legally-compliant employment
agreements for directly-employed physicians and mid-level providers for a minimum
of three (3) years following Closing
Commitment to enter into new agreements with initial terms of at least three (3)
years for providers currently engaged through third party agreements
Commitment to maintain and enhance contracts with independent providers for a
period of not less than three (3) years
LOI Summary: Driving Quality of Care throughout the Continuum:
DNV Accreditation:
Commitment to continue accreditation by DNV GL Healthcare following Closing
Access to Emerging Technology:
Commitment to facilitate implementation and adoption of available emerging
technologies regarding quality and safety of care
Quality Metrics:
Commitment to use reasonable best efforts to cause Hospitals to satisfy appropriate
quality metrics as established in conjunction with the Board and with Novant Health’s
existing policies regarding quality and safety metrics
Commitment to use reasonable best efforts to position and maintain the Business in
top 10% nationally with respect to each quality metric implemented for the Business
LOI Summary: Growing the Level and Scope of Care:
Innovating Care Solutions and Technologies:
Commitment to use commercially reasonable efforts to facilitate adoption and
implementation of emerging innovative care solutions and technologies, including
current innovation infrastructure at Novant Health
Clinical Research Capabilities:
Commitment to use commercially reasonable efforts to facilitate access to Novant
Health’s clinical research expertise, resources and infrastructure
Commitment to use commercially reasonable efforts to educate and inform
providers within Service Area of clinical trials in which Novant Health is participating
and make available such clinical trials to patients of the Business, including
opportunities to participate as a clinical trial site in ongoing clinical trials
Grant Funding Capabilities:
Commitment to use commercially reasonable efforts to facilitate adoption and
implementation of Novant Health’s clinical research and grant-funding capabilities
LOI Summary: Strategic Positioning:
Integrated Health System:
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REGULAR MEETING, JULY 13, 2020 PAGE 599
Commitment to use commercially reasonable efforts to fully integrate the Business
into Novant Health’s existing integrated healthcare system
Partnership with Regional Hospitals:
Commitment to use commercially reasonable efforts to cause the Hospitals to
develop and enter into appropriate and desirable clinical affiliations, partnerships
and arrangements with unaffiliated hospitals, health systems and other facilities and
providers in the region
Brand Enhancement:
Any changes to existing branding associated with the Business or Hospitals requires
approval of the Board
Commitment to collaboration between Novant Health and the Business to align
branding strategies
LOI Summary: Local Board Composition and Structure:
Business shall continue to be governed under local governing body (“Board”):
Community-based Board of 15 trustees
Minimum of 12 trustees will be community residents of the Service Area, including
at least three (3) physicians with active privileges on Hospital’s medical staff
All Board members to be subject to governance best practices, core competencies
and diversity considerations
Board retains authority to nominate for appointment all subsequent trustees to the
Board
Power for Board to nominate 2 trustees of the Board to serve as trustees on Novant
Health’s parent governing board:
Trustees shall be nominated and appointed within 90 days after Closing
LOI Summary: Powers of the Local Board:
Board shall retain certain Reserved Powers, including:
Approval of the elimination of core clinical service lines, (agreed upon in the
Definitive Documents), and development and recommendation of (i) elimination of
non-core clinical service lines, (ii) establishment of new clinical service lines or (iii)
expansion of existing clinical service lines
Approval of the Business’s initial CEO immediately following the Closing, as well as (i)
ongoing participation in the evaluation, as well as recommending employment and
termination, of the CEO, and (ii) participation in the evaluation of candidates and
making recommendations for any CEO appointment subsequent to the initial CEO
immediately following the Closing
Approval of any material workforce reduction that would qualify as a “plant closing”
as defined in 29 U.S.C. § 2101
Development and approval of annual operating and capital budgets, which budgets
shall also be subject to the ratification and approval of Novant Health
Oversight and approval of medical staff matters, including credentialing, adverse
actions, and adoption and amendment of medical staff bylaws and policies
Approval and development of the Strategic Plan or any other strategic or
development plans of the Business, including approval of any modifications thereto
Approving any direct or indirect sale, transfer, or conveyance of all, or substantially
all, of the assets then associated with, or the control of, the Business to a for-profit
system or, for a 10-year period after Closing, to a buyer other than a for-profit system
County has right of first refusal (ROFR) for any sale of assets or control of Business
Commissioner Zapple asked Mr. Kahn if he was understanding correctly that Novant after a 10-year period
has the ability to sell the hospital and would be able to sell itself (the system) without local board approval. Mr. Kahn
responded that his understanding was correct and it is consistent with the market. It is very rare that a system of
Novant's size and scope would delegate the ability to restrict its strategic decision-making to a local board within
one of its regions. The restrictions associated with changes of control or changes of ownership, relate to this region
and the assets within this region, not to Novant Health proper.
Commissioner Zapple asked Mr. Kahn to explain the verbiage used in the LOI “commercially reasonable
efforts.” Mr. Khan explained that it is a legal term that has been established, clearly in North Carolina law, and then
beyond that. There are various other standards that have been defined, not quite as clearly in North Carolina case
law, but certainly in other case law around the country, particularly Delaware, which is where the corpus of corporate
law is developed. While it's not precedential in North Carolina, it is certainly persuasive for the courts here in this
state. Commercially reasonable requires a fairly high-level of commitment on Novant Health's part and that is that
they have to use those best efforts that would be consistent with anyone else similarly situated in their position and
in that industry. To the extent that doing so would create financial jeopardy for Novant, that is where they start
bumping up against the line of what they would have to fulfill. Up to that point, for the most part, the courts have
held that they would have to act as any other entity would, reasonably within their position. It is important to note
that elsewhere in the LOI, Novant Health goes one step beyond that, and for those who are not lawyers, that might
be considered a very nuanced distinction, but they go one step beyond that to use “reasonable best efforts.” Those
commitments are arguably one step beyond, and not simply focused on the industry at which the party is operating,
but really, what could reasonably be expected of a party in that position. Mr. Kahn emphasized that it is important
to note they made that commitment in a number of areas where they wouldn't have to depend on the cooperation
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 600
of third parties, but it would be entirely within their control. An example of that relates to the health equity
commitments. If looking at the commitments that Novant Health would be making as it relates to the advancement
of health equity, they would be judged on a reasonable best efforts standard, again, which is one step higher than
commercially reasonable. For those commitments that Novant Health is making where really, it would take another
third party to work with Novant Health, it is on those types of commitments that they have been agreed to a
commercially reasonable standard. Commissioner Zapple stated that what is absent in the phrase is any funding
commitment or a timeline and is used throughout with a number of wonderful ideas. He thinks Mr. Kahn’s
explanation is meant to be flexible like that, but in the LOI, there are no funding commitments for a number of issues
that Novant Health brings up or a timeline by which they will make them happen. Mr. Kahn responded at least as it
reads now with each commitment, and again these commitments run 20+ pages, specific dollar amounts were not
tied to each one. At this point that would be difficult, and at some level, it would be difficult to assign a dollar value
commitment to each one. However, he would offer that the $2.5 billion in strategic capital commitment is intended
to advance the hospital's strategic plan. If you were to look at the hospital's strategic plan, a number of initiatives
within that plan are intended to address these various core principles that the PAG identified for the LOI. While a
dollar value may not be assigned to each line item, he would offer that the aggregate, $2.5 billion, is intended to
fund a lot of the initiatives that are reflected in those commitments. As it relates to a time period, the LOI does state
that Novant Health, except where otherwise indicated, is going to commit to implementing these commitments
within at least five years or the reasonable time period in which it otherwise could implement it. As he mentioned
with telemedicine, Novant Health is committed to implementing that within 18 months. Otherwise, it is generally a
five-year obligation, but there are a number of them where a more specific time period is highlighted.
Commissioner Barfield stated as it relates to employees, it has been a policy of the hospital for years that it
would have no layoffs. He asked Mr. Khan what commitment will be made to employees that they will have long-
term employment with the hospital. Mr. Kahn responded that was one matter at the forefront of the PAG’s mind. It
was understood that the quality of the proposals that were received is really reflective of the efforts of all of the
employees at the hospital currently. They have made the hospital what it is and so it was very important to the PAG
that those employees be recognized and that their employment be addressed. Novant Health has committed that
for the initial two-year period, there will not be any layoffs, any reductions in force. Beyond that, because it is
unknown what the future holds with respect to healthcare and the operation of healthcare, what they have agreed
to is that any layoffs that might occur in the future beyond that initial two-year period, would have to be approved
by the local board. Again, just as there is now where there is a local board that would have oversight and decision-
making authority for any such layoffs, there would be that board made up of residents of the community that would
have to approve any layoffs on a go-forward basis. Commissioner Barfield stated that it has been communicated by
the PAG that there would be an increase in employees over the next short while. Mr. Kahn stated what is being
discussed are minimum commitments to the current staff that there would not be any reductions. However, as
reflected in these other commitments, it almost would require Novant Health to add to the labor force of the hospital
on a go-forward basis in order to fulfill a number of the commitments reflected in the LOI, and would be reflected
in the definitive agreement, in order to implement the strategic plan of the hospital. The $2.5 billion of capital is
reflecting the expansion of services, not just within the City of Wilmington, but within the County and region, and it
is reflecting the building of new facilities and new resources that will require additional employees to operate. While
they have not committed to a specific number as it relates to the expansion of the workforce, he does think there is
a way for them to stand behind a number of the commitments without expanding the workforce.
Eb LeMaster, Managing Director with Ponder & Co., stated his firm solely works with not-for-profit and
government owned hospitals, and has done so with over 125 in a two-year period on specifically two services, one
is on access and capital and two is on mergers and acquisitions. Those two categories fit with what his firm’s charge
was of reviewing the efficacy of the process that has been undertaken, reviewing the financial consideration and
how it compares to fair market value, and finally to weigh in on the ability to fund their proposals. His firm was
engaged in January 2020 and has been involved for the last seven months and has worked with all those involved. It
is important to note that his firm was brought in as an independent advisor to perform the assessments and it is not
a process required by the NC Attorney General. All of the finalists are not-for-profit entities, as opposed to if this
were a sale to a for-profit where the NC Attorney General would need to review it at a different depth. This is a
request above and beyond what is required. Also, only three of the 18 KPEs are related to financials. He provided an
overview of the financial analysis of the respondent proposals highlighting the following:
Financial Analysis – Respondent Proposals:
Scope of Report:
Ponder & Co. was asked to independently (1) review the New Hanover Regional
Medical Center strategic partnership search process and provide perspectives on the
efficacy of such process and (2) provide feedback on the financial consideration
proposed by Atrium Health, Duke Health and Novant Health relative to industry fair
market value ranges
This report is being provided for the use of the New Hanover County Board of
Commissioners, the Board of Trustees of New Hanover Regional Medical Center and
the NHRMC Partnership Advisory Group (“PAG”)
This report is an assessment of the partnership search process and high-level review
of fair market value
Ponder is providing this report from the perspective of its role as financial advisor to
the NHRMC Board of Trustees and the New Hanover County Board of Commissioners
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 601
Ponder has worked with not-for-profit healthcare systems on mergers and
acquisitions and processes such as this one for over 20 years, and is bringing this
independent perspective and experience to bear in this report
Ponder has been actively involved in regular PAG meetings, calls of the PAG support
team and related conversations and meetings since being engaged on January 9,
2020
Ponder has also worked closely with management outside these meetings on various
topics, as well as with Guidehouse and Hall Render
This document considers the proposals from the three respondents that the PAG
selected for further due diligence – Atrium Health, Duke Health, and Novant Health
Ponder has also revisited the ability of the three Respondents to fund their proposals
Review of Process – Factors to Consider:
Financial Analysis of Proposals:
Atrium Atrium Health - DukeHealth - Novant
(1)(2)(3)(4)
Health Option 2 DukeHealthOption 2 Health
Purchase Price / Upfront Cash50,000,000200,000,000500,000,0001,375,000,0001,500,000,000
Other Components of Cash Consideration
Present Value of Lease of Property Plant Equipment Over 40 Years567,800,000
Present Value of Cash Installment Payments Over 15 Years950,000,000
County Retention of NHRMC Assets Less Liabilities 440,491,000440,491,000440,491,000440,422,000
TOTAL CASH PROCEEDS TO COUNTY617,800,0001,590,491,000940,491,0001,815,491,0001,940,422,000
TOTAL CAPITAL COMMITMENT1,204,047,8391,008,000,0001,903,400,000400,000,0002,720,000,000
Number of Years121212512
Annual Capital Commitment100,337,32084,000,000158,616,66780,000,000226,666,667
Cash to Hospital Supporting Foundation150,000,000250,000,00050,000,000
Other
Estimated Present Value of Margin Share Over 40 Years92,926,533
Contribution of NHBMC 150,000,000
TOTAL FINANCIAL CONSIDERATION2,064,774,3722,848,491,0002,843,891,0002,215,491,0004,860,422,000
Foundation contributions are assumed to support the hospital and are not included in Total Cash Proceeds to County
Capital commitments have been annualized to a maximum period of 12 years for comparative purposes
(1) Atrium annual lease payments of $28,970,266 for 40 years (present value of $567.8MM using 3% discount rate). Present value of margin share of 5% of incremental
operating EBITDA margin over 8%; assumes 12% EBITDA margin over 40 years discounted at 3%. Due to the contingent nature of this payment, we have included it
in 'Other.' Also, Atrium provided a formula for routine capital expenditures over 40 years. This would imply a capital commitment of $2.17 billion over 40 years, and
total economic consideration of $3.11 billion over 40 years
(2) Atrium's minimum capital commitment under its revised proposal totals $1.11 billion over 15 years plus $120 million to construct a behavioral health and addiction
treatment facility. The proposal mentions potential additional strategic capital based upon Atrium's enterprise capital allocation process. The installment payments
are estimated to be approximately $77 million annually for 15 years, totaling $1.15 billion, discounted at 2.5% to $950 million (Atrium previously provided a 3%
discount rate for the long-term lease methodology, if the same rate is applied to the installment payments it would imply a present value of $916 million). Atrium
Health did not estimate County Retention of NHRMC Assets Less Liabilities, Ponder has used DukeHealth's estimate for comparative purposes
(3) $1.375 billion represents the middle of the range provided by DukeHealth. DukeHealth subsequently clarified option #2 to state the County would retain NHRMC's
net cash and that DukeHealth would commit to minimum capital expenditures of $400 million over five years
(4) Novant Health ascribed $150 million in value to the contribution of Novant Health Brunswick Medical Center although no cash value inures to the County or NHRMC
for this additional consideration. $3.1 billion capital commitment assumes $60 million/year of routine capex and $2.5 billion over an assumed 15 years for strategic capex
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 602
Summary of Respondent Proposals:
Valuation Summary:
Respondents’ Ability to Finance Transaction:
The three Respondents are very strong healthcare systems from a financial perspective with
each being “Aa2” or “Aa3” rated by Moody’s:
Less than 30% of all healthcare credits are rated at these levels
Each entity has significant liquidity and access to capital:
Each has over $3 billion in cash and investments
Each have significant access to debt and capital
To fund commitments to NHRMC, the Respondents have access to multiple sources of funds,
including the Respondents’ cash and investments, cash flow from existing operations, capital
markets/debt issuance and the cash flow of NHRMC
Ponder’s work does not take into account significant synergies and opportunities that would
exist in combining with any of these healthcare systems:
Any combination would advance the new system into a new position in the state and
region, and create significant momentum specifically in NHRMC’s region
Ponder has analyzed the financial position and capacity of each of the organizations, and all
three Respondents are well positioned to fund the upfront cash consideration and capital
commitments outlined in their proposals
County Manager Coudriet stated that with the PAG discussions, the question now becomes what would
the County do with the assets. This is the item that has had the least amount of attention applied for all of the right
reasons. When he and NHRMC President and CEO John Gizdic brought the recommendation forward to the Board
to explore options for the hospital and when the Board gave them that direction, it was made very clear that this is
not about trying to cash out. This is about trying to establish a governance model, a partnership model going forward
that is good for not only health, but the healthcare system in our community. It was known once the PAG brought
forward a recommendation, immediately the community would want to know and expect a very robust conversation
about what to do with those assets. The items he will present today, while not directives from the Board, because
the Board made it clear that it has never been about cashing out, staff has been listening to the things that are
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
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important to the County Commissioners, PAG, NHRMC Board of Trustees, and most importantly, to the community.
The things that have defined what the requests for proposals were and the solicitation that was put out there are all
consistent with the strategic plan. He believes what is being brought forward are reflective of what everyone in this
community have said are important to them as it relates to a healthy community, not just the delivery of healthcare
any longer, but a healthy community at large and is the intention of this presentation. He presented the overview of
Exhibit D of the LOI highlighting the following:
Use of Proceeds: Letter of Intent – Exhibit D:
Initial Allocations from Proceeds (Based on Novant Health Partnership):
NHRMC Transition Stabilization Escrow - $300 million:
Liability Escrow ($100 million): non-assumed liabilities, wind-down expenses, tail
coverage premiums
Team Investment and Resiliency Fund ($200 million)
County Revenue Stabilization Fund - $300 million:
Retirement of voter and non-voter approved debt
Reserve for unexpected emergency response needs
Reserve funds to address budget shortfalls during economic downturns
Reserve fund to minimize tax and fee increases in the future
Mental and Behavioral Health Fund - $50 million:
Substance abuse treatment programs
Sustained grant funding for evidence-based programs, e.g. Tides, Inc.
Expanding access to mental health services
Public Benefit Community Foundation:
$1.25 billion estimated from transaction following “Initial Allocations”
Establishes a community foundation to provide financial support to benefit all New
Hanover County residents:
Must remain consistent with the then-current New Hanover County Strategic Plan
Endowment will make annual Unitrust payments not to exceed four percent (4%) of
the fair market value of the Endowment, based upon a rolling five (5) year average
11-member Board of Directors (5 appointed by County Commissioners and 6 appointed
by local Hospital Board)
Initial endowment to support and promote the following:
Health and Social Equity
Public Primary, Secondary and Post-Secondary Education
Community Development
Community Safety
Completely separate entity from NHRMC and the County; County to establish
NHRMC President and CEO John Gizdic stated the PAG through the outstanding leadership of its chairs and
vice-chairs, has been committed to making the right choice for the organization and for our community. He then
provided an overview of the presentation summary highlighting the following:
Summary and Recommendation:
Summary:
A yearlong process that began July 23, 2019
Input from PAG, community groups and independent financial advisor through highly
transparent process
Interest in NHRMC from six high-quality healthcare organizations offering substantial
investment
Proposed investment in numerous priorities of the Board of Commissioners directly and
through Foundation
Unanimous vote by PAG followed by endorsement from NHRMC Board of Trustees to
proceed with Novant Health
Mr. Gizdic stated that over the past year, a tremendous amount of work has been completed, including
education, research, asking challenging questions, evaluating every option and making tough, yet passionate
decisions about our future. All owe the PAG a debt of gratitude for their courage and commitment to the community
and to NHRMC. This evening, the Board has heard unanimously from the PAG, NHRMC Board of Trustees, and from
the leading industry experts, all supporting the recommendation to proceed with the partnership with Novant
rd
Health, which includes an expanded relationship with UNC Health and the UNC School of Medicine. The 53
th
anniversary of NHRMC was celebrated on June 14. NHRMC’s 53-year history is filled with bold and controversial
decisions. As a matter of fact, the very establishment of the organization failed the first time, buying Cape Fear
Hospital was extremely divisive in the community, partnering with Pender Hospital, transitioning EMS from the
County to NHRMC. All bold and controversial decisions made by people sitting in the Board’s chairs. Also, decisions
that have been shown by history to absolutely be the right choices for improving the health of our community. It is
now this Board’s turn to create a profound legacy. As Peter Drucker once said, “In times of turbulence, the greater
danger is not the turbulence, but it is to act with yesterday's logic.” NHRMC is facing turbulent times. NHRMC has
an ambitious mission of leading our community to outstanding health. It has a bold vision for this thriving community
to serve as a national model of achieving excellence for all and the community deserves nothing less. An important
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 604
example of this is the adoption of a resolution declaring racism as a public health crisis. As Commissioner Kusek
stated, a resolution is a great start. However, possibility without opportunity is merely a fantasy. The partnership
with Novant Health provides NHRMC and the community the resources needed to make what is possible a reality.
NHRMC has an amazing staff, great providers, and a passion for the health of this community. The Board’s support
of the partnership with Novant Health will enable NHRMC to truly transform this community and allow it to truly
lead the community to outstanding health.
County Manager Coudriet stated that everything that the Board directed staff to do, in terms of the process
and the transparency, the things that were said would happen along the way, the deliverables, those things have
occurred, the process has worked. He would ask the Board to reflect on that, but he thinks it is just as important for
the community to hear that everything that Mr. Gizdic and he said would be done, and the things that this Board
have directed of them, have been achieved and he would argue that they have been done in the right way. Excluding
he and Mr. Gizdic as this is what they do and are paid to do, 19 men and women convened, donated lots of their
time, and went through a very deliberate and thoughtful process and have arrived at a unanimous decision. He
thinks the Board has heard from many of them along the way, perhaps privately. He knows publicly, that not
everybody came to the table with the same opinion that Mr. Gizdic and he offered to the Board, and that is that we
should evaluate what the right future is. A year later there is a unanimous recommendation and added into this is
now is the complexity, if the Board proceeds, of what becomes of the tremendous cash value asset of the
community. The concepts have been outlined for the Board tonight. They are written into the LOI and if the Board
directs to proceed, everyone will work really hard, every day, between now and presenting those to the Board to
bring those things to life. There is also still the opportunity for this Board through informed debate and updates
along the way to come back and check them, see if we are still directionally right, and putting it into definitive
agreements. While nothing is perfect, this is a very strong LOI that the PAG has recommended that is in keeping with
the strategic plan and is reflective of the direction the Board gave in mid-May when it narrowed down to three
preferred respondents and directed to begin negotiating LOIs. He then provided an overview of the proposed Board
actions highlighting the following:
Proposed Board of Commissioners Action:
Approve the LOI between the County, NHRMC and Novant Health to authorize
development of a definitive agreement for Board no later than October 19, 2020 that is
inclusive of all items addressed during the presentation
The definitive agreement would be legally binding to further the goals of the healthcare
system and the priorities of the community and a final version would be shared publicly
at least 10 days prior to a public hearing and vote of the Board of Commissioners on
whether to execute the agreement
Chair Olson-Boseman expressed appreciation for the presentation and thanked the 21 members of the PAG
for their in-depth work, months of research, and the critical insight they have developed to reach a unanimous
agreement that a partnership is necessary for New Hanover Regional Medical Center, and another unanimous
recommendation that Novant Health and UNC Health are the best fit for our community and our healthcare system.
It is a true testament to this process and the merits of Novant Health and UNC Health that all 21 members of the
PAG would come to this unanimous conclusion. This advisory group represents our community. They are diverse,
have varied opinions, and come from many different backgrounds, and all along they have had the best interest of
our entire community at the forefront of their work. The Commissioners have put their trust in this group to do their
due diligence and provide the Board with a thoughtful and careful recommendation on the best path forward. And
they have done that. She trusts them and believes that our community and our healthcare system have an incredibly
rare opportunity that has the power to transform and touch every single person’s life in New Hanover County. Today,
she will be voting to move forward with this recommendation and negotiate a definitive agreement with Novant
Health, UNC Health, and UNC School of Medicine. She will be voting to move forward so that the possibilities and
the opportunities that this will bring to our community and to our residents can be achieved. With Novant, we will
be able to maintain local control, because to her, that means the healthcare decisions that are most important to
area residents are made locally. With Novant’s proposal, we will have strict oversight from a community-based board
of trustees made up of our area’s residents, and we will have local representation on the Novant Health parent
board. Novant has also committed to growing healthcare services and access to care for everyone in our community.
They have the resources to do it. They have a strong charity care policy, better than NHRMC’s current policy, they
are committed to quality and value, and have nationally-recognized programs that improve health equity. Their
culture fits ours, they are committed to our hospital staff and providers, and they are bringing with them UNC Health
and UNC School of Medicine, which is an incredible opportunity for us.
Chair Olson-Boseman further stated that as a member of the Board of Trustees, she knows first-hand the
real issues NHRMC faces and the critical needs we have. This Board must look at the future, acknowledge that it has
the opportunity to benefit the citizens with this decision in a real and sustainable way, and knows that there are
experts who have put hours upon hours to make the right recommendation for the Board to move forward. It must
also be ensured that any proceeds the County receives are invested in a definitive, clear, and strategic way to benefit
everyone in the County for years to come; and that this money is kept out of the hands of politicians and goes directly
to the people we serve. The Commissioners, as a board, must be focused on what the community’s priorities and
needs are and that is where any money should go. She believes the draft framework shared with the Board does
that, setting up a community foundation and also allocating specific amounts to NHRMC employees, the County’s
emergency response needs, and mental health and substance abuse. It needs to be remembered this is only a draft
that will be worked through over the next couple of months. Today, this Board has the power to secure healthcare
for residents and help the community truly thrive at a time when we need it most. She hopes the Commissioners
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
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are able to move forward together as a board with this vote, acknowledging all that is possible and turning its focus
now on the details to ensure the County secures a definitive agreement with Novant Health and UNC Health that
will benefit this community for generations to come.
Vice-Chair Kusek stated she does not have enough words to thank the PAG and the NHRMC Board of
Trustees for all of their hard work and the tremendous hours they put in. She personally knows that in the beginning,
a majority of the PAG members were not in favor of any changes for the hospital, but now they have unanimously
approved the proposal to move forward with Novant. She thinks that speaks volumes about what the PAG has
learned and how far the process went. For her, this was all about asking the difficult questions and about ensuring
outstanding healthcare for our community for generations. However, it has also been about putting any proceeds
that might be realized from this to the best use for the good of this community in perpetuity, and that is forever.
She is excited about accomplishing both of these things. What happened here has been a tremendous amount of
work on the part of many people. A thorough evaluation of where we are with the region's healthcare, where we
could be, the possibilities that are before us, and now, we have a comprehensive plan for the lion's share of these
proceeds from this endeavor, using only the interest income that it will generate every year for the benefit of every
single person in our community for generations. For those reasons, she would make a motion to approve the LOI
and the accompanying Exhibit D - Use of Net Transaction Proceeds, between the County, NHRMC, and Novant Health
to authorize the development of a definitive agreement for Board’s consideration in September or October, 2020,
that is inclusive of all items addressed during this presentation and Exhibit D. The definitive agreement would legally
bind further goals of the healthcare system and the priorities of the community and a final version shared publicly
at least ten days prior to a public hearing and vote by the Board of Commissioner on whether to execute the
agreement.
Motion: Vice-Chair Kusek MOVED, SECONDED by Chair Olson-Boseman, to adopt the resolution to approve the
Letter of Intent between New Hanover County, NHRMC, and Novant Health to authorize development of a definitive
agreement for Board consideration in September or October 2020 that is inclusive of all items addressed during the
presentation and Exhibit D – Use of Net Transaction Proceeds. The definitive agreement would be legally binding to
further the goals of the healthcare system and the priorities of the community, and a final version would be shared
publicly at least 10 days prior to a public hearing and vote of the Board of Commissioners on whether to execute the
agreement.
County Manager Coudriet stated as a point of clarification, Mr. Kahn referenced that there has been
discussion about a break fee of $25 million versus $15 million. If it is the will of the Board, he thinks that the Board
would have to direct that in the motion or direct staff to include it, but staff would need affirmation from the Board.
Vice-Chair Kusek stated she would include that as there is agreement from the NHRMC Board of Trustees and Novant
Health for that change.
Amended Motion: Vice-Chair Kusek MOVED, SECONDED by Chair Olson-Boseman, to adopt the resolution to
approve the Letter of Intent between New Hanover County, NHRMC, and Novant Health to authorize development
of a definitive agreement for Board consideration in September or October 2020 that is inclusive of all items
addressed during the presentation and Exhibit D – Use of Net Transaction Proceeds and that the break fee be
changed from $15 million to $25 million. The definitive agreement would be legally binding to further the goals of
the healthcare system and the priorities of the community, and a final version would be shared publicly at least 10
days prior to a public hearing and vote of the Board of Commissioners on whether to execute the agreement.
Chair Olson-Boseman open the floor for Board discussion.
Commissioner Zapple stated that he is opposed to the passage of the resolution before the Board, not
because of the potential of a sale of our hospital to Novant. Novant’s RFP response and their follow up information
have been very promising, as has the work of our community PAG in sorting through and prioritizing the options. He
has had the opportunity to meet with Carl Armato, the CEO of Novant, and he is convinced that he is sincere and
earnest in his assurances that he believes that his organization can help our community’s healthcare needs. His
opposition to the resolution is with approving the LOI, a critical document that is attached to the resolution. This
document spells out the financial deal and informs the County what is included with a full sale of our hospital in both
financial and practical terms. We were reminded earlier today that the LOI, if passed today, will become part of a
definitive agreement, the agreement that will be negotiated and finalized. There is a lot of information in this
document, the LOI, and the impact on our community of what is contained in the LOI is enormous. It was his original
understanding that the Commissioners were going to be asked to vote on the recommendation of the PAG at today’s
meeting. An approval of the PAG recommendation would then trigger the beginning of the drafting of the LOI. It was
this past Friday morning that he received an email from the County Manager informing all Commissioners that they
would be asked to approve this final version of the LOI, the same document that he had just been handed. As he
found out later in the morning, the writing of the LOI had been in progress for two months but was just now being
brought forward to him and he is assuming his fellow Commissioners. It is absurd to think that a deal as complicated
and as important as this sale of our County’s and our taxpayers’ greatest asset can be absorbed, vetted, and fully
considered by anyone in two and a half days.
Commissioner Zapple stated that he has spent a considerable amount of time with the document over the
weekend looking for the answers to two questions: 1) Will the proposed sale increase costs of healthcare to the
citizens of New Hanover County and our region? and 2) Is there a reasonable level of confidence that the sale of our
hospital will increase the quality of our healthcare? He saw many positive clues, but did not find the answers to these
questions in the LOI. He has serious concerns about some of the basic tenets of this agreement and the plan on
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where the money from the proceeds will go and how it will be spent. For example, why are the taxpayers of New
Hanover County paying for bonuses, new retirement packages and resiliency funding for NHRMC employees to
transition to Novant? All of those payments, $200 million worth, are incredibly worthwhile but this should be
Novant’s cost, not the taxpayers of this County. Novant is buying the entire enterprise and should now be responsible
for paying the costs of reassuring their new employees that their jobs and benefits are secure. There are thousands
of citizens in this County that have gone without paychecks for the past four months. Small businesses that have
gone under and citizens are going deeper and deeper into debt just to survive. What about their transition needs?
We are handing over $1.25 billion in proceeds to an unnamed board of directors for the new community foundation.
There is little guidance on who will sit on this new board and with these assets, is now the most powerful board in
our community. There is a basic framework of how that money will be spent, but there is no assurance of diversity
of board members, and there are no assurances that all those who have been responsible for creating the board will
not be able to sit on the board to guide the spending of the money to their favorite causes and organizations. Great
idea, but it has not been fully thought through. This is our opportunity to make a “generational change” in our
community. $1.25 billion, he is all in but wants it to be thought through.
The $2.5 billion that has been committed by Novant for NHRMC’s capital expenses and improvements will
be shared with Novant Health Brunswick Medical Center. Again, the $2.5 billion is also going to help support them.
They will be our new partner, according to the LOI. The $2.5 billion will also be used for additional mergers,
acquisitions of other healthcare systems, and joint ventures. It will not be used exclusively to fulfill the goals of
NHRMC’s strategic plan. He knows there may be money that is used for that, but it was certainly unclear to him
before this weekend reading through the LOI, which says that this money is going to be spread throughout our entire
region. Not having the opportunity to see NHRMC’s strategic plan has made this more of a surprise certainly to him.
$2.5 billion is a lot of money and can make a change, but let’s think it through and make sure that NHRMC, our
hospital, is number one on that, and that the strategic plan, whatever is in it, gets fully funded. It makes him
uncomfortable signing a piece of paper, an LOI, that says that we are now going to spread this and start talking about
other acquisitions of other healthcare networks. Also, the $50 million that Novant is paying to establish a mental
and behavioral health fund is being paid to the NHRMC Foundation, which is fine. However, the NHRMC Foundation
is listed in Exhibit C of the LOI as one of the acquired subsidiaries that Novant is buying. Novant, in essence, will be
paying itself the $50 million. Now, due to the good work of NHRMC Chief Legal Counsel Lynn Gordon, whom he met
with on Friday, she has explained there is more subtlety to that and it could be rectified. Again, he is very hesitant
to put his name on a document that leaves that question hanging open. He wants to slow down and get it right.
Commissioner Zapple concluded his comments stating that there are many more questions, all of which he
hopes can be reconsidered, discussed, and brought into the public forum so that the taxpayers of New Hanover
County can have an honest look at where their money is being placed and what they are really getting for this once
in a lifetime decision to sell our hospital to another organization. He cannot support the motion or approve the LOI
as he is convinced, that in its current form, it is not in the best interests of our citizens or our County. Nothing is lost
if we take two weeks or 30 days to discuss, revise, and clarify any misconceptions in this critical document so that,
rather than saying to the public, “Trust us, we will make it right”, we can hand them an LOI that accurately reflects
what can be anticipated with this sale of the hospital, prior to being handed the final definitive documents. It may
be heard that this LOI is an interim document, that it can be modified, and that there will be an opportunity for
public input in the 10-day window after the final document is released. But pay attention not to what you’re hearing,
pay attention to what you are seeing. Because what you are seeing is a fast-tracked, headlong rush to get this deal
done before November, and let nothing, even commonsense, stand in its way. This rush is far from being in the
public interest. Would not caution and a more deliberative approach be the wiser path in the midst of a global
pandemic? A pandemic that will have profound, but as of yet unknowable effects on healthcare? You’ll hear that
uncertainty is why this deal must be done quickly. But with the stakes this high, is uncertainty a good or valid reason
to rush into an irreversible agreement? We need to slow this process down and get it right.
Commissioner Barfield stated this is probably one of the biggest decisions that has been made in our County
for many years. This weekend, he pretty much disengaged from the public and chilled out a bit, sought the Lord for
wisdom. What many people do not know about him before he took this office, he held the office of pastor and still
does. When it comes to seeking knowledge and wisdom on what to do, he has a different barometer that he goes
by that helps guide him, that helps him make the right call for the right reasons. Not for selfish gain, not for any
other gain other than what he thinks is the best thing to do. There are many members on the PAG that he has great
respect for. Virginia Adams, Cedric Dickerson, and Hannah Gage he has known almost 30 years, and also Bill
Cameron, Jason Thompson, and many of those folks have a very skeptical view as he has had about this process. Is
it the right thing for our community? The conversation has been heard about the headwinds and as he served on
the NHRMC Board of Trustees, he heard about the headwinds. Jack Barto would talk about Obamacare and how
terrible it was for the hospital and how it was going to do terrible things for the hospital. After a while he stopped
talking Obamacare and when asked he said, “Oh, it's making us millions of dollars, it's a cool thing now.” Sometimes
we can calculate the headwinds right, sometimes we can calculate them wrong, but it is important to be looking
towards the future. He understands the due diligence process. He has been a realtor for 22 years, so when you write
a property, there is a certain time period to do all of your homework to make sure that everything lines up. If it does,
you move forward, if not, you cancel the contract and go about your business. It allows for time to get the appraisals
and inspections done and all of the things that need to happen to make sure that you are getting the benefit of the
deal. You can change your mind for any reason or no reason at all. He thinks that is important moving forward to
really understand the nuances and complexities of what will transpire here in the future. His big concern is the public
and making sure that the citizens in this community fully understand and are engaged and supportive of this process.
To him, it is vitally important that if this motion carries, that the PAG, NHRMC Board of Trustees, and others involved
fully engage in every aspect of the community. He wants to be clear what he means by community. What he means
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 607
by community is all of New Hanover County, the 235,000+ citizens who live here are fully engaged and understand
the benefits, the detriments, and anything else in-between and to get community buy-in moving forward. He does
believe that a dual process would accomplish that goal of moving forward with the LOI and working through that as
well as the engagement. It so important that citizens are engaged. To the hospital leadership, he encouraged them
to have the right people speaking. He has seen the wrong people speaking publicly about this conversation and using
fear as a motivator. We see too much fear being perpetrated throughout the media already by people in high places.
To him, it is important that we educate folks on the facts and not fear. Do not promote that you are going to have a
higher tax rate if you do not do this, that, and the other. Tell folks what they are going to get. Educate them on the
benefits. As a realtor, you talk about benefits and features; not the negative aspects. What are the benefits of the
deal for our community? If they are truly benefits, the citizens in our community as they did back in the mid-60s, will
be on board with this and if not, then they will not be. Understanding the process, he voted with the last vote to
continue the process so that he could be fully informed in order to make a fully informed decision on what is best.
He cannot do that without all of the information presented, more answers given. He had a great opportunity to talk
with some of the Novant leadership about a week ago and got great insight into some of their initiatives and goals.
He asked how would it be possible to spend $2 billion on an organization and recoup on the investment The answer
that he got sounded reasonable in terms of finding ways to drive quality and that you drive the initiatives such as
lean principles to allow the organization to thrive and survive.
Commissioner Barfield further stated that, again, it is vitally important for the PAG and the NHRMC Board
of Trustees to get community buy-in, including the naysayers like him that have been in that category for quite a
while, and to get those people understand the benefits of the deal. For him, the final vote will depend upon just how
successful the PAG and NHRMC Board of Trustees are in doing that. He would love for the County to put forth a poll
as it did with the quarter cent sales tax, to engage the citizens here and see where they fall on this issue. This is
fraught with a lot of emotions and just like with COVID-19, he has seen the best and worst of people. He had a
hospital administrator reach out to him in an email indicating that because his thoughts did not line up with his, that
he was not a leader. He thought “I have been elected three times to this Board, how do you come to that
conclusion?” The person also said that his legacy will rest upon this vote. As a pastor, the only legacy he is concerned
with is if he makes it into heaven, not the hospital vote. We build buildings and tear them down, nothing that this
Board will do is eternal. He gave his father a placard from the Myrtle Grove library when the County sold it as he was
a Commissioner when it was established. He has a placard in his office from the former Health Department building
that the County sold to the hospital. The County does not own it anymore, so there is nothing eternal here. No
decision he will ever make here will affect his legacy and people who think that, we have a very different set of
values in terms of what's truly important. He stated he would support moving forward with the caveat that the PAG
and the NHRMC Board of Trustees fully engage with the citizens and hold as many informational sessions as possible
to get community buy-in, understanding that if that does not happen, he may not be in support of the final vote.
Commissioner White stated on personal note for his fellow Commissioners, Commissioner Barfield since
the beginning has expressed concern and worry about this and he wants to publicly commend him for keeping an
open mind and how he just articulated keeping an open mind moving forward, but recognizing the value of the
process that we have all watched unfold. He commended Chair Olson-Boseman for how she has navigated this as
the Board’s leader and that also goes for Vice-Chair Kusek as well. When this started it was alleged by a few that,
“The buyers would dictate the terms of the agreement.” It was alleged that no clear legal record existed and we had
no authority or ethical duty or obligation to evaluate this. It was alleged malfeasance. He is sure all know what that
word means. It is a word that connotes intentionality, criminal wrongdoing, fraud, and breaching of duties. It was
alleged that someone or somebody was acting improperly and outside of their legal bounds. It was alleged “fiduciary
lapse by asking for this evaluation to occur.” It was alleged, and most notably objectionable to him personally, that
this government process was corrupted and that there were clandestine relationships that led to its initiation. That
was alleged by one of our elected state legislators and supported by one of our Commissioners. It has taken all the
restraint that he could muster for a year to not take legal action against such offensive things, but he believes in the
process. He ultimately believes, as he asks juries to believe, that through the process as you weigh, filter, think,
deliberate, and learn, almost always the right thing occurs. He does not know how Mr. Broadhurst, Ms. Biehner, and
the other 19 people landed this plane unanimously. He cannot imagine something else, any issue, upon which 21
people agree on anything today and 16 out of 17 members on the hospital board. Ask yourselves, any other issue
such as sports teams, face masks or no face masks, immigration, no immigration, taxes, spending. This was a
controversial question to ask because it was alleged from the outset that it was corrupted and fraudulent. He wants
this community to take note of that and take note of the people who said those things.
Commissioner White stated the next item he wants to comment on is about the foundation. This is an
important component. In 1924, Mr. Duke created the Duke Endowment. All have heard about it, have heard about
it on NPR, everywhere. $4 billion in grants have been given out since 1924 (96 years). It was a $40 million check that
he wrote. It was meant really to establish Duke University, Davidson College, houses and family support for ministers
and so forth, lots of charitable things. The present-day value of that endowment at that time in today's dollars was
$1.3 billion. Isn't that interesting? Today, that endowment is worth $3.8 billion, nearly 100 years later. The reason
the foundation is important is because 100 years from today, if we make the right decision, this County should have
billions of dollars that would have grown and continued to nurture. Out of the 3,200 counties in this nation, there
are no others that he can find that have this. None. Zero. States, maybe for the tobacco settlement or through large
settlements like that, but county governments do not have the opportunity to transform their community while
getting cutting-edge healthcare, increasing access, closing health equity gaps. We are following that type of
endowment process to ensure that long after we are dead and gone, people are still benefitting from the decision
that the Board makes today.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 608
Commissioner White concluded his comments stating this courthouse was dedicated in April of 1892. This
very room. The judge's bench was to his right and the judge looked out on the audience and the first case he heard
was a divorce case. He does not know how it went. The chambers were the room to the right. This room has seen
remarkable history. Six years after that divorce case were the 1898 riots. People came in here and made awful
decisions about race and deposing elected leaders and burning, murdering, right here in this room. Segregation and
integration were debated right here in this room. This decision is one of which, in public life, he will be most proud
to have played a small role in it. Not because somebody is going to name a building, because he is sure they'll find
something wrong with him at some point and they'll never do that, nor does he want them to. But because he will
go to his grave ultimately knowing that he made a permanent impact on this community in ways that he cannot
even imagine today. He looks forward to supporting the resolution.
Chair Olson-Boseman stated that she wanted to apologize to the 21 PAG members for the comments made
earlier and hopes his comments are in no way reflective of the other four Commissioners. She, and she thinks the
other three, very much trust the members and appreciate all of the work they have done, the hours that they put
into this, and knowing that not one of them or one of the Commissioners have anything to gain from this personally,
except knowing that we are doing the right thing. We are transforming healthcare in our community for generations
to come. And not only are we doing that, but we are dealing with health equity and trying to set our citizens up so
that we have everything that we need with treatment centers, with education, etc. and the possibilities are limitless.
Hearing no further discussion, Chair Olson-Boseman asked for direction from the Board on the amended
motion on the floor. Upon vote, the MOTION PASSED 4 – 1. Commissioner Zapple dissenting.
A copy of the resolution and Letter of Intent is hereby incorporated as part of the minutes and is contained
in Exhibit Book XLII, Page 14.4.
BREAK: Chair Olson-Boseman called a break from 6:27 p.m. until 6:47 p.m.
PUBLIC HEARING AND DENIAL OF REZONING REQUEST BY MIDDLESOUND LLC, TO REZONE APPROXIMATELY 3.35
ACRES OF LAND LOCATED IN THE 500 BLOCK OF MIDDLE SOUND LOOP ROAD, ADJACENT TO THE MIDDLE SOUND
LOOP ROUNDABOUT, FROM R-20, RESIDENTIAL DISTRICT, TO (CZD) R-5, CONDITIONAL MODERATE-HIGH
RESIDENTIAL DISTRICT, IN ORDER TO CONSTRUCT A 24-UNIT TOWNHOME DEVELOPMENT (Z20-09)
Chair Olson-Boseman opened the public hearing and requested staff to make the presentation.
Senior Planner Brad Schuler presented the request by Middlesound LLC, to rezone approximately 3.35 acres
of land located in the 500 Block of Middle Sound Loop Road, adjacent to the Middle Sound Loop roundabout, from
R-20, Residential District, to (CZD) R-5, Conditional Moderate-High Residential District, in order to construct a 24-
unit townhome development. The property abuts the eastern side of the Middle Sound Loop roundabout and is
located directly across the street from the Ogden Elementary School. It is about three-quarters of a mile east of the
Ogden Commercial Node located along Market Street. The site is mostly undeveloped. There is currently one single-
family dwelling located on it. The site has a unique shape resulting in the majority of it directly abutting Middle
Sound Loop Road. Mr. Schuler then reviewed the conceptual site plan proposed with the application, which includes
the development of six townhome buildings, three stories in height, each building having four units for a total of 24
units.
The applicant is proposing to design the stormwater facilities for the project to handle up to a 500-year
storm, which is approximately 18-inches of rain over a 24-hour period. This exceeds the County’s requirement of
designing the facilities to a handle a 25-year storm, which is approximately eight inches of rain over a 24-hour period.
In addition, the applicant provided two preliminary/conceptual stormwater evaluations which are included in the
Board’s packet. Both reports state that with the proposed stormwater facilities, the project is expected to reduce
the rate of runoff from the site. The applicant’s civil engineers are in attendance and can answer questions regarding
reports and the design of the stormwater facilities. The applicant is proposing to retain most of the existing trees on
the site. Many of the trees will be saved and run along the perimeter of the site and adjacent to Middle Sound Loop
Road.
Mr. Schuler then reviewed the main routes to the site from Market Street and Military Cutoff. The residents
of this development will be able to travel to the Publix and Big Lots shopping centers without getting on Market
Street. They can also access Military Cutoff by way of Red Cedar and Covil Farm Roads. The 24 townhomes will
generate about 15 trips during the peak hours, which is a net increase of about five to ten trips more than what a
typical development would generate under the current zoning. A group of local residents opposing the project,
Middle Sound Lookout, provided a transportation evaluation prepared by Lawrence Green, Traffic Engineer, which
is included in the Board’s packet. However, an updated version of that evaluation was sent to the Board on Friday.
The evaluation highlighted concerns about the Middle Sound Loop roundabout level of service (LOS), conflicts with
traffic generated by Ogden Elementary School, pedestrian safety, delays occurring at the Middle Sound Loop Road
and Market Street intersection during the PM peak hour, and crash activity in the Middle Sound Loop community.
Traffic at the roundabout does get backed up during the morning peak hour with school buses and parent drop-off
traffic occurring. It is expected the queueing of the vehicles will back up past the proposed development’s driveways
when the project is anticipated to be completed. The applicant’s traffic engineer also prepared a technical
memorandum to determine the potential traffic impacts of the project. The report found that the Middle Sound
roundabout is currently operating a D level of service during the AM peak. According to the report, in 2022 it is
expected that the roundabout will operate at an E level of service with around 40 to 41 seconds of delay. With the
proposed 24 townhomes, the AM peak hour delay is expected to increase by about two seconds.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 609
In response to Board questions, Mr. Schuler confirmed that the 2022 future no build information on slide
11 of the staff presentation is with nothing else built. It is the existing traffic built up at two percent a year, so it
includes background growth, but that would not include the proposed 24 town homes. He also confirmed that it is
a delay in seconds on slide 11. In regard to the PM peak, the applicant’s report found the roundabout is currently
operating at a B level of service and will continue to do so with the proposed project, which will add about a second
of delay. The North Carolina Department of Transportation (NCDOT) conducted a review of the Middle Sound Loop
roundabout in 2018 and found that overall it was operating at an appropriate level of service. However, that report
also noted that the largest delays of the intersection occurred in the AM peak hour when most people are heading
to work and/or dropping kids off at the school. NCDOT did provide preliminary comments on the proposed driveway
layout. The applicant is proposing to limit the driveways to right-in/right-out only movements. NCDOT stated the
driveway layout would provide for excellent access management instead of traditional full movement intersections.
The proposed conceptual plan also includes the installation of a sidewalk network within the proposal which will
connect to Pickway Court and to the existing multi-use path along the Middle Sound Loop roundabout.
There are two ongoing NCDOT projects in the area. The first being the Market Street median project and
secondly, the Military Cutoff extension. Both are currently under construction and are expected to be completed by
2023. As for active subdivisions, there are five in the area with about 100 homes still remaining to be constructed.
Mr. Schuler then reviewed pictures of the area adjacent to the subject site along Middle Sound Loop Road, from
within the property facing the Middle Sound Loop roundabout. He reviewed pictures to provide information on the
nearby area and the R-20 zoning, which showed some representative developments within the zoning district,
including Emerald Forest. He noted these areas usually consist of large lots, single family homes, and the lots range
close to about a third of an acre. He then reviewed representative developments of the R-5 zoning, noting that it is
considered to be the townhome zoning district. It limits residential units to a maximum of residential buildings that
contain a maximum of four units and a maximum height of 35-feet which would allow for a three story building. That
would be a similar product to what the applicant is proposing. As for compatibility, the site does have a unique shape
with two sides of it abutting Middle Sound Loop Road. The townhomes are a transitional use between single-family
homes and collected roadways. Also, townhomes tend to generate less traffic per unit and these townhomes, again,
will be restricted to the same height requirements of the R-20 zoning district.
The 2016 Comprehensive Plan classifies the site as General Residential. This place type focuses on lower
density housing and associated civic and commercial services. The density of the proposed development is within
the intended residential density range of up to approximately eight dwelling units per acre (du/ac), which is provided
for by this place type. The project also adds to the diversity of housing types in the area. The vast majority of the
homes within Middle Sound are single-family housing. Not including the senior living projects in the area, there are
less than five percent of the homes in Middle Sound that consist of attached housing units. With the senior facilities,
that adds another five to six percent of attached housing. Overall, this application is generally consistent with the
County's Comprehensive Plan.
The Planning Board considered this item at its June 4, 2020 meeting and recommended approval (4 – 2),
finding that it was consistent with the Comprehensive Plan and reasonable and in the public interest and included
the following agreed upon conditions:
1.The development shall be limited to one right-in ingress and one right-out egress. Left turning
movements will be prohibited on to, and from, Middle Sound Loop Road.
2.The project’s stormwater facilities shall be designed to accommodate at minimum a 100-year storm
event. The stormwater facilities may be located within the contiguous 0.72-acre access, utility, and
drainage easement.
3.In addition to the County’s tree retention standards, the property owner shall retain and preserve all
trees as illustrated within the conditional rezoning exhibits, unless:
The tree has been proven to directly affect the installation, or cause damage to, any required
infrastructure (i.e. water/sewer lines, stormwater, etc.);
The tree is proven to be dead, dying, or severely damaged; or
The tree is in an unsafe condition that may cause harm to the residents or general public.
4.All buffers and fencing proposed within the conditional rezoning exhibits shall be installed prior to
construction commencement of horizontal improvements.
5.All street and landscape lighting shall be LED. Street lighting shall be shielded in a downward direction,
and the origination of the light shall not be visible. The street lighting location will be limited to within
the street corridor and sidewalks. Landscape up lighting shall remain within the internal Demarest
Pointe neighborhood streets, yard and parking spaces.
6.Construction ingress and egress will be in accordance with the vehicular circulation plan included in the
conditional rezoning exhibits. Public utilities will be accessed from Middle Sound Loop Road and
Pickway Court.
However, since that meeting the applicant has modified some of the conditions and added new ones. The
modifications to the conditions added restrictions onto the development as shown in the agenda packet. They
include restrictions on the development that limit access, require the stormwater facilities to accommodate a 500-
year storm, require the preservation of trees, and restrict exterior lighting.
Chair Olson-Boseman thanked Mr. Schuler for the presentation and invited the applicant to make remarks.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 610
Scott Stewart, applicant, stated he represents Middlesound, LLC. Demarest Pointe is situated in the
northeast corner of New Hanover County. With easy access to Market Street and Military Cutoff Road, which will
soon be improved as the Military Cutoff Road extension will provide easy access to three coastal counties and their
amenities. More specifically, Demarest Pointe is situated at the entrance of Middle Sound, just over a half a mile
from the ever expanding Market Street mixed use corridor and just 1.2 miles from Ogden Park, which will soon be
accessible by walking, jogging, and a short bike ride along the currently planned pedestrian improvements by New
Hanover County and NCDOT. At just 3.35 acres for this conditional rezoning request, Demarest Pointe is less than
1.5% of the total land area of Middle Sound’s peninsula, and the 24 townhomes will be less than one percent of the
existing residences. The proposed zoning for Demarest Pointe is residential moderate, high density district R-5. This
is one of the new zoning tools adopted and unanimously approved by the Board in July 2019 which provides for new
development patterns, outlined in the Comprehensive Plan for infill development in order to provide new housing
opportunities to accommodate our exponential growth.
As we all know, there is not much available land left and Demarest Pointe is strategically positioned to be
awarded this unique opportunity to utilize the tools that have been provided to build the vision for New Hanover
County’s future pattern. Demarest Pointe provides a responsible transition between the existing commercial and
residential intensities to the west and the single-family pattern to the east. To ensure this transition was right for
this property, Mr. Stewart commissioned JC Morgan Appraisers who state, “The property is in the immediate vicinity
between the recently approved Canopy Pointe (15 units per acre) and the existing Middle Sound Village (4.5 units
per acre). The proposed project, located at the “point” of the traffic circle, provides the desired transition from the
hustle and bustle at the traffic circle to the single-family uses just east of the project. Any other uses of the site would
be unlikely due to the multiple road frontages and proximity to the traffic circle.” The 7.2 units per acre is a
responsible transition for Canopy Pointe's 15 units per acre to the west and the Middle Sound Village’s 4.5 units per
acre to the east particularly, due to what Demarest Pointe has to offer.
Mr. Stewart then reviewed a slide showing a comparison of the by-right and the conditional rezoning plans.
He stated that after months of community outreach, two community meetings, walking the property with the
adjacent property owners and interested neighbors, and following the Planning Board's guidance and
recommendations, he now comfortably feels there are a number of significant additional details assembled,
benefits, and changes that the plan now provides from where it originally began and what by-right development
does not offer. When the unprecedented amount of feedback was received, the comparison chart covers many
disciplines that also addresses many of the comments and concerns of the community including traffic, stormwater
management, building height, setbacks, site buffers, and tree preservation. Traffic safety is one of the largely voiced
items from the community feedback, and with the exponential growth in New Hanover County, he wanted to do
everything he could to provide the best access options to the project. He met with NCDOT about various access
options and alternatives over the past year to provide a fixed design solution direction. After NCDOT and the
concepts that evolved into the plan before the Board today, he was informed that the traffic generation for the
project was so negligible that it did not warrant a traffic impact analysis (TIA) or roadway improvements. NCDOT
Deputy District Engineer Dan Cumbo stated in the assessment, “The Demarest Pointe access design provides
excellent access management with limited movement, right in and right out driveways instead of traditional full
movement intersections. The development design is well thought out in regards to circulation and flow of traffic.”
He was thrilled with the assessment. Conflict points are locations in or on approaches to an intersection where
vehicles pass, merge, diverge and cross. To improve safety at intersections, conflict points should be minimized,
which the plan achieves. By only allowing right-in and right-out movement and prohibiting left turn movements, the
project will significantly reduce vehicle conflict points from 54 conflict points in R-20 by-right zoning to just two
conflict points in conditional R-5, which is a 96% reduction in conflicts. Safety has always been his priority. The
community also voiced some concerns about construction traffic and several additional conditions have been
provided with the project proposal, one of which would provide for restricting construction traffic to the
development during the AM peak hours when Ogden Elementary School is in session during the calendar year, and
of course, during calendar events.
Mr. Stewart further stated that even though it was not required, he commissioned Davenport Engineers to
prepare a traffic technical memorandum to evaluate the project and to also address other traffic documents
submitted regarding this project. Due to the stewardship approach of developing this property, R-5 was selected
after studies of the form of the land and the functions of the envisioned improvements would realize a balance
between the existing surrounding community, land features, and build spaces. A process that is desperately needed
today, balance. Although 27 units among seven buildings was achieved, it was decided to limit the project to 24 units
and six buildings with four homes each, similar to what would be allowed by-right in R-20 zoning for six single-family
homes.
With stormwater impervious coverage on everyone's minds, he wanted to ensure balance to the project.
He looked at what could be built in R-20 zoning regulations and close to identical impervious coverage expectations
to create a program in R-5 with significantly more opportunities and benefits to the environment, the community,
and to the County. Rather than a required minimum 25-year storm event in R-20, he and his team are committed to
installing a minimum 500-year storm event with water quality protections aligned with SA water quality standards
to improve the water quality in the Pages Creek watershed and curtail flooding. Dr. Larry Cahoon independently
reviewed the stormwater program and stated, “The development of Demarest Pointe would actually reduce
stormwater runoff from the property. This is not only a decided benefit for water quality management in the Middle
Sound area, it should be an example of how to do this correctly in the future.”
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 611
Building heights and setbacks were also a topic of conversation. Commissioning drone photography, clearly
illustrates the third floor porch of the Demarest Pointe townhomes across from Ogden Elementary and the peak of
the roof cannot be seen. The entire existing perimeter buffer to remain encapsulates the entire compact
neighborhood, and is screened from all surrounding neighbors and roadways. It will simply not be seen. The trees
are 50-55 feet high and some are 60. It was commonly heard that the townhomes’ building height was a concern
and that the building size was not consistent with the character of what has been built in the R-20 and R-15 and that
the townhomes just do not fit in. As quoted by JC Morgan Appraisers, “Regarding the character of the community,
currently there exists similar townhome options in Middle Sound including Demarest Village, Anchors Bend, and
Thai’s Trail. The proposed building height of 35-feet for Demarest Pointe is consistent with the current zoning criteria
required for single family, duplex and townhomes in the adjacent and surrounding neighborhoods of Middle Sound.”
There are approximately 2,700 homes in Middle Sound and hundreds of examples of three-story homes in Anchors
Bend, Mason's Harbor, Register Place, Mason’s Bluff, and Demarest Landing to name a few. There are also dozens
of examples of one-story earlier homes built in the 1970s immediately adjacent to new three-story homes, where
yesterday is next to today.
In review of the site buffer(s) slides, Mr. Stewart noted there is a neighbor’s roof with a peak elevation of
33 feet, nearly matching that of the proposed development. Beyond the concern of the building height, he wanted
to make certain that values would not be affected and affirmed by JC Morgan Appraisers who stated “I researched
several comparable situations in which residential properties backed up to properties that were either multi-family
or more intense use. The data indicates that the proposed project would have no negative impact on the values of
the adjoining or abutting properties.” Mr. Stewart stated the proposal goes significantly beyond the requirements
of R-5 zoning, providing 55% open space, preserving 75% of the trees which equates to about 70% of the property's
tree canopy, whereas, there is no tree protection in R-20 for conventional lots under one acre which is the current
state of the property. Included in the plan is a suggestion from the Planning Board Chair to provide an additional
buffer at the roundabout. Four parking spaces will be relocated to incorporate a pocket park adjacent to the
roundabout as an entry statement to the Middle Sound community. R-5 conditional zoning for this property has a
lot of significant advantages in reducing traffic conflict points by 96% for safety, a 500-year stormwater program,
diversity for new housing opportunities, walking and biking distances to services using impervious coverage wisely
for more benefits, 35% more open space, tree preservation, 1,300 more linear feet of additional sidewalks, and 220%
more estimated tax revenue. The vision is to borrow from the pioneering details, the scope of the program, the same
qualities and standards with the mission of stewardship to create a neighborhood of unmistakable appeal, with the
hope that it may become a model for growth for the future of New Hanover County and the Board’s vision becomes
reality. Mr. Stewart stated that members of the project team are present to continue the presentation and answer
any technical questions.
Don Bennett with Davenport Engineering stated in regard to traffic, this is a proposed development that
generates just slightly more in a 24-hour period than would normally be required in the peak hour for a TIA. When
looking at the maximum volumes entering and exiting the site, 9:00 in the morning and 11:00 in the evening, it is
about a vehicle about every six to seven minutes. As stated in the staff report, single-family detached units have the
highest trip generation per unit of any use in the residential section of the ITE trip generation manual. What also
needs to be considered is that in the traffic count for the roundabout analysis, there was a maximum and a minimum
of values. The total traffic generated by the site is less than the variation in those four 15-minute periods. With
proximity to Ogden Elementary and Publix, while not accounted for in the traffic study, there is the possibility of
non-vehicular trips that would further reduce the trip generation of the proposed site. While traffic volumes have
changed since Publix was built, some of that could also be that people do not have to drive onto Market Street now
for valuable services needed in the Publix shopping center. With regards to traffic safety, there is a nominal increase
in vehicular traffic associated with the project, but in looking at the collision patterns, most of the collisions were
east of the site. The site is oriented towards the west towards Market Street. Also, there is currently under design
or in place, a multi-use path on a section of roadway, which provides a separation of modes further enhancing safety
on the roadway. The volumes generated by the traffic study shows that there is a nominal increase and that they
are within the variation in the hourly count. As mentioned by staff there are two projects, the access management
project north of Middle Sound on Market Street to reduce conflicts and increase vehicular capacity, and the Military
Cutoff extension, which will take off some traffic from Market Street, specifically those up in the White Road and
Gordon Road area, which should free up some capacity and reduce delays for vehicles exiting to Market Street.
Matt Haley with Cape Fear Engineering stated that with time running out, he wants to reiterate in regard
to the stormwater program that the Demarest Pointe project drains to Pages Creek and makes up a very small
percentage of the overall watershed, .29%. The project is located outside of the FEMA flood zone, however, there
are some areas in the Middle Sound Loop community that are located within the flood zone that have experienced
flooding in the past. This project is elevated significantly above those areas. As mentioned before, New Hanover
County requires management of up to a 25-year storm. The proposed project will manage significantly larger events
by installing stormwater management features with outlet control structures to manage the runoff.
Chair Olson-Boseman announced that 13 people signed up to speak in opposition to the request and asked
that they step forward to make their remarks within the 15-minute timeframe.
Meredith Everhart, resident of Middle Sound Loop Road, spoke in opposition stating she has known the
Board from being a local attorney here in town for the last 20 years. She is here tonight as an adjacent property
owner and her property is directly beside the proposed development. Her husband's family has owned the property
since the late 1950s. She and her husband have lived there for approximately 15 years which is about the same time
that the applicant has owned his property. She has already sent the Board several e-mails and pictures detailing her
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concerns so she will not repeat that information. She wants to highlight for the Board her strong conviction that this
is not an appropriate development for this specific location because it is too dense and it is not consistent with the
surrounding community in anyway. Her property is zoned R-20, which is something that she and her husband have
always known just like the applicant has. They do not have a problem with him developing his property at all, just
like she and her husband might do with their property eventually, but they would expect Mr. Stewart to be held to
the rules he knew were in place when he bought the property which allows up to six single-family homes not 24
townhomes. Such a huge jump in density is literally quadrupling what would be allowed on that lot and it is clearly
not what the applicant had any right to expect when he first bought his lot. There have been multiple new cul-de-
sac developments recently right around the roundabout area that are the same size in land as this development. All
only have one entrance and nobody has complained about any of those developments because they are consistent
with the community that they are in. It is not a matter of price or affordability either. There are plenty of homes in
all different price ranges on the loop, including smaller, single-story, ranch-style homes that sell for over a $100,000,
all the way up to the large homes on the water on the backside of the loop, that go for more than $3 million. One
can already get whatever home they want for their family on the loop no matter what their price range is, so it is
not true that this is bringing a different price range or style of housing to the loop. The conditional zoning district is
primarily intended for use as transitions between zoning districts to create a transition that benefits the community
at large. Despite Planning staff's opinions, this is neither a place for a good transition, nor does it benefit anyone in
this community other than this particular developer. Market Street at the Publix shopping center is three-quarters
of a mile from this development and on the road from Market Street to this location, the only thing other than single-
family homes right now are two churches and the school. If the applicant had wanted to rezone the site to R-15
instead of R-20, that would be within what is located within the community. However, to go all the way down to R-
5 is too dense for the community and it does not create a transition to anything because everything past it on the
loop is R-15 or R-20 as well. It only creates a pocket of super dense development in the middle of R-15 and R-20
zoning. Everything else is basically up on Market Street at the entrance to Middle Sound Loop and not on the actual
loop itself, which starts at the roundabout. If this project was closer to the Market Street intersection, then maybe
you could make the transition argument, but not here three-quarters of a mile away when there is nothing else like
it around for it to transition from or for it to transition to. Not where the neighbors are so opposed to it and not
where it does not benefit the community at all because there is already sufficient variation in housing and pricing
available. Whether one thinks this is a nice looking development or not, going from R-20 to R-5 is just simply too big
of a jump and with too much density in the wrong location, and is not consistent with or beneficial to the community
in any way. She and the neighbors are asking that the Board deny the application.
Steve Coggins, attorney, stated he represents members of Middle Sound Lookout, roughly 800-plus
members and is speaking on their behalf in opposition to the request. The Board has worked very hard hearing their
concerns and has spent a great deal of time studying this project. He thanked the Board on behalf of Middle Sound
Lookout for the diligence that it has shown. As has been expressed earlier tonight, his clients believe in the process
too and that it will all come out and he is confident that the Board will vote to deny the application. Middle Sound
is a unique peninsula surrounded by water. It is already a tough place to develop under all the circumstances. The
proposal chooses the toughest point in the toughest area. Why is that? Because it is at the roundabout with a school
across the street. It is a bottleneck. All traffic at the northern and southern runs of the Middle Sound Loop converge
on the roundabout and also the traffic coming from Market Street itself, where there is a school zone. What is unique
about conditional zoning is that state statute requires that the Board take a hard look at what its policies are. What
are the policies? He has a difference of opinion with staff on this. His research indicates that there has been no repeal
of the Middle Sound Small Area Plan. Plan NHC 2016 expressly references and adopts the small area plan. The reason
why that is significant in his view, in referencing those small area plans and its existence is that it places the upward
density here at roughly 2.5, which would translate into six units, not 24. Even if you were looking at only Plan NHC
2016, the site is classified as general residential and in looking at the language for “Visualizing the Future” on page
14, it provides that in general residential where you have low density multi-family, the range for low density is two
to six units per acre. You are given that range given the constraints of that physical location and so you can imply
even standing alone, Plan NHC 2016, and hold to what the current density is of R-20. Mr. Coggins then reviewed a
map that shows the remaining developable area in the Middle Sound area. The area could absorb 337 more units
under the present zoning. If, however, this is rezoned to R-5, the present remaining acreage is also then susceptible
to rezoning to R-5, which increases the number of units in there by an additional thousand over what it would be at
the present zoning. As seen by even the applicant’s own traffic analysis, this is simply unsustainable. He will address
only stormwater to say that he has available Mr. Wayne Nutt, a chemical engineer who has evaluated stormwater
plans for 40+ years and he has written the Board about it. However, he does want to underline the point that the
stormwater plan presupposes the ability to use the land of adjacent land owners of Pickway Court. It does not. The
reason why that is important is that under the Unified Development Ordinance (UDO) section 3.5.5, a person cannot
have tentative plans in order for a proposed conditional zoning project to work. Mr. Coggins stated that Susan Keelin,
an attorney here in New Hanover County, would speak next regarding the analysis she prepared of the easement
situation.
Susan Keelin, attorney, stated she is representing a number of residents who own property on Pickway
Court which is adjacent to the proposed project. She has researched and determined that the purported easements
upon which the developer is relying are not valid easements. She is hopeful the Board will ask her some questions
about that and she can fill in gaps. She did drop off a comprehensive package on Friday to the Board as well as sent
it by email. She then reviewed a plat which is recorded in Map Book 53, Page 357 that the developer is relying on
that shows the triangle shape upon which the stormwater facilities are proposed to be installed. The property does
not belong to the developer. It belongs to the Pickway Court lot owners. There is a purported easement called an
AUD easement, which stands for access, utility, and drainage shown on the map. However, at the time that easement
was documented on this plat in 2009, Middlesound LLC owned both the Pickway Court property and the project
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property. She does not expect the Board to be real estate attorneys, but there is a vast array of case law that says
you cannot grant yourself an easement. There must be different parties, one is a dominant and one is a servient,
and the property owner cannot grant himself his own easement. It is void ab initio and some case law was cited in
the report that she sent to the Board on Friday. Also when looking at the plat, it shows a half acre which is the Baptist
church property, the residence shown on it is right in the middle of the proposed development, upon which lots of
impervious surface will be constructed. Even if this AUD easement is valid, which she contends it is not, it specifically
on the plat says that it is for the exclusive use of the adjoining parcel and then it has the parcel ID number and the
parcel ID number is for the property, the “V” around the half acre. The half-acre tract does not have any easement
purported or otherwise to benefit it and the developer cannot use the purported easement for its stormwater. She
then reviewed the slide showing that the owner of lot one, as highlighted on the slide, never made any easements
to the developer. The developer is aware of that and has asked the property owner to sign a correction deed, which
she has not done and she will not do. The property owner was conveyed her lot by reference to a plat in Map Book
14 at Page 15, which was included in the information Ms. Keelin provided to the Board on Friday, and it has no
easements whatsoever. It is just an unencumbered lot. The map upon which the developer relies shows the 30-foot
wide private access and utility easement upon which he purports to use for construction equipment ingress and
egress during the construction project and apparently for a sidewalk to connect to Pickway Court. He does not have
that easement and he is not going to get that easement. Basically, because the project does not meet the
requirements of section 3.5.5(a) of the UDO, which says it is for firm development proposals, not for tentative
projects, it cannot be rezoned because it does not meet those requirements and it cannot.
Mr. Coggins reviewed the slides showing that historically the Middle Sound traffic volume for the past 20
years has had incremental increases in the traffic, noting the past three years has seen a significant spike in the
traffic volume coming at the roundabout. Due to recent developments approved as a matter of right, that pushes
the roundabout to be at a failure level at a faster rate than predicted by NCDOT, which is only a 2% increase, but the
Wilmington Metropolitan Planning Organization shows a 30% increase, not 2% within this time period, which
accelerates the failure rate being discussed. The daily trips will increase by 84 over the current zoning resulting in a
crash index of 4.37. That is significantly above the average for New Hanover County and statewide for urban
secondary roadways. If the Board values the overwhelming geographical restraints, if it values the overwhelming
citizen input received, it will be well served by voting in denial of this particular rezoning request. He hopes that the
Board would be able to have some time in the opposition’s rebuttal to hear from a parent and a teacher who can
provide insight of what it is like to actually experience living in this area, dealing with the roundabout and the school
and not a mere statistic.
Chair Olson-Boseman stated that the applicant and the opposition would each have five minutes for
rebuttal.
In applicant rebuttal, Grady Richardson, attorney for the applicant, stated that he has known and
represented Mr. Stewart for a number of years and he is guilty of over preparing and being too thorough. Had Mr.
Stewart come in and not been associated with this project tonight and simply done like what was done with Canopy
Pointe, or Middle Sound Village, there would not the opposition the Board is hearing tonight. Just up the road off of
Middle Sound Loop Road is Canopy Pointe that has over 70 units, R-5 zoning, no opposition from the people here
tonight. Just down the road east of the loop is Middle Sound Village that is ten acres with 4.5 units on the site, no
opposition to it. When they talk about too dense, as Ms. Everhart stated it is not consistent with the surrounding
community, it is definitely consistent with those two projects which the opponents do not oppose. Not only that,
Mr. Stewart has designed a project that not only meets the requirements of the UDO, and has the unanimous staff
approval of it and recommended approval for it, it greatly exceeds the requirements. In talking about 25-year storm
events, Mr. Stewart has prepared for a 500 and potentially 1,000-year storm event. Nothing is heard from the
opponents about that. The opponents are not saying anything about how he saved 95% of the trees on the property.
Nothing is heard about the fact that there are 54 conflict points if Mr. Stewart were to develop six homes under R-
20 for traffic with left turns and right turns from those properties. Nothing is heard from the opponents about the
fact that there are only two conflict points. Nothing is heard about the fact that coming into tonight, and he does
not know about the e-mails but he is sure the Board was told the trees are going to be decimated, roof lines of the
structures will be seen, none of that is true. The entire tree canopy that is on both sides of Middle Sound Loop Road
are being preserved and the townhomes are not going to be seen absent some devastating hurricane that knocks
down the trees, but nothing is heard from the opponents about that. Nothing is heard about the pedestrian
connectivity that Mr. Stewart's project application shows from the opponents. Nothing is heard about the fact that
Mr. Stewart is doing a pocket park on the property. Mr. Stewart could have come in for an R-5 and asked for 27
townhomes. Instead, he comes in with 24 and has contained everything onsite with a 500+ year storm event taken
care of, a right-in, a right-out, two conflict points, far safer than left and right hand turns and 54 conflict points as a
matter of right. Slide 4 of the applicant’s presentation sums it up as good as can be asked for and the opponents do
nothing. The traffic impact analysis that they would have the Board believe, Mr. Stewart is not required to submit a
TIA yet he did so to make sure that the opponents understood that there's not going to be this devastating traffic
impact that they would have the Board believe. In fact, Mr. Stewart's project is 92% below the threshold for even
coming close to meeting a TIA, but the opponents do not want the Board to remember that. The opponents talk
about the impervious surface coverage. As a matter of right, Mr. Stewart's project could have 55,000 square feet.
This project will be around 60,000 square feet, but it is going to have a 500-year stormwater or more taken on site.
He's got a rain garden, protecting and preserving the trees and here is the thing, who doesn't have a dog in the fight?
The staff, taxpayer money, well experienced professionals support it and they say so in their analysis of this project
and why it is a benefit to the community as a whole. We need infill. We need smart planning. We need affordable
housing and social equity for this type of project in this type of neighborhood. Mr. Richardson stated he is a native
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of Wilmington. He understands Middle Sound Loop Road and the traffic issues out there. He would be happy to
answer any questions the Board may have and would ask that the rezoning request be approved.
In opposition rebuttal, Kristi Harper, resident of Middle Sound Loop Road, stated that she is not only a
resident but a fifth grade school teacher at Ogden Elementary. She is sure the Board received letters from teachers
who live on the loop and teachers who drive to the loop to come to work every day about their concerns with the
possible rezoning and what that can mean for them down the road not only as residents, but as teachers at Ogden
Elementary. She lives seven-tenths of a mile from the school, and it would be thought she would have an easy
commute. Specifically, she lives on Oyster Lane, which is where the proposed residents would be able to cut through
to get the Big Lots shopping center. If she leaves her house any time after 7:05 on a school morning, it takes her
anywhere from 10 to 20 minutes to get into the parking lot at Ogden Elementary School. That is because traffic backs
up in all four directions at the traffic circle and this is not exclusive to morning drop-off and afternoon pickup times.
It happens quite frequently. She then explained how cars accessing the school property have to enter, turn, and
leave all the way through the parking lot, and then where they exit back into the traffic circle. One of the things that
the developer has mentioned is the great multi-use trail that is there. However, she thinks that one would be hard
pressed to find a single parent on the loop that would feel comfortable allowing their child to even use that trail.
That is one of the really special things about Ogden is that the actual district is small, but it is very densely populated
and they have a ton of kids that could ride their bikes. She could ride her bike to work and would love to do that, but
it is not something that she feels safe doing because of the existing traffic. She thinks it would be naive to assume
that it would be families moving into these townhomes adjacent to the school. Ogden Elementary is consistently
one of the top five percent performing schools in the entire state. Affordable housing and the school district is very
desirable. The families that would be moving in to the townhomes would be contributing to the morning traffic and
continuing to burden the overcrowded school. Even with the redistricting that goes into effect this year, Ogden
remains one of the elementary schools that is significantly overcrowded. There was a group of 40 fourth graders last
year that were all sharing one space with two teachers. The school is bursting at the seams. She knows that is a
reality of development and the teachers rise to the occasion to make the best of it, but she thinks that the students
and families and the teachers that are served in Middle Sound Loop and Ogden Elementary deserve better than that.
She worries that this rezoning is a slippery slope and that if this is approved, it could only continue to create more
problems for traffic, for the mobility of the children to ride their bikes to visit their friends or ride their bikes and
walk to school. She would ask the Board to consider all of these things when making its vote.
Chair Olson-Boseman closed the public hearing and opened floor to Board discussion.
Commissioner White stated that the Board gives staff and its Planning Board direction via the UDO process,
the Comprehensive Land Use Plan and tells them to go find and fill opportunities, increase density that is affordable,
has minimal impact on traffic, make sure they contain stormwater, and to do it in a way that is sensitive to the
environment. The Board tells them all of these things. Those things are published to the community and the
developers, and most of them, not all, read the ordinances and think, “All right, well, that's how we will develop
land.” Everyone that appeared here tonight and the hundreds of people that e-mailed and called, he has tremendous
respect for everyone on both sides of this issue. The lawyers did an outstanding job on both sides. Everything that
Grady Richardson, by the way, he's one of the best lawyers, not only in here, but in North Carolina and his appellate
record in the Court of Appeals and the Supreme Court will demonstrate that because he's dealt with issues like this
his entire career. Everything Mr. Richardson said he agreed with a month ago, when he looked at this two to three
weeks ago. He knows other Commissioners also went up there and looked at this, but he went up there and spent
an afternoon with the applicant and his supporters. He walked away from there thinking this is exactly what we
want. We want lower conflict points on traffic. We want tree preservation. We want better than the 100-year
stormwater runoff containment. We want density because the more you have the easier you can grow, we talk
about smart growth, this is smart growth, this is what it means and it is affordable. He then left them and went and
spent an equal, probably more, time with a group of citizens at the school there and they all walked around the
whole traffic circle, got in their cars and drove a few miles around the peninsula, as the area is affectionately referred
to. He has decided and what really came in his mind is that the notion that it is not really the first drop in the bucket
or the middle drops in the bucket that tips the bucket over. It is the last drop. The slide that Mr. Coggins showed
about the by-right accumulation of traffic is problematic for him. So here we are sending these conflicting messages
to Ernie Olds and his Planning Board colleagues, to staff, and they are throwing their hands up probably thinking,
“What do you want us to do? You tell us to find these projects and to find these developers and put these incredible
projects together and then you don’t support them.” All he can say about that is he does not know what the remedy
is. He cannot support this and is not going to support it. He thinks it is difficult for him to ever remember a time
where he has disagreed with Donna Girardot, but when she said it is an incredible project in the wrong place, he
could not agree more. He regrets sending conflicting messages to everyone involved as part of the County
Commission, but he does not want to vote for the last drop in the bucket that is going to tip it over. It is an incredible
place to live up there. There are price points up and down the price scale already existing, there will be other
opportunities for development up there, but he cannot support this project.
Vice-Chair Kusek stated she also spent time up there and thanked the neighbors that took the time with
her and also thanked Mr. Stewart for the same. She even went back and spent some time the next day with her
husband. She can attest to the danger of the traffic circle because someone almost t-boned her when she was
coming around it. She has spoken to so many nice neighbors and applauds the community and their efforts. She is
not swayed so much by the form e-mails. The Board had some really rough accusations that were made by some of
the people up there, and she does not believe they are in the room today, who simply just almost to her said, “No,
not in my backyard.” She thinks a lot of the opposition has been led by a person who has a closet full of t-shirts in
many different colors and recycled signs, and no matter what is being put before this County, they are in opposition
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to it and that bothers her as well. She has also been really baffled by the lack of compromise on both sides. That is a
beautiful piece of property up there and she understands that Mr. Stewart wants to build his project up there. She
guesses she does not understand why maybe he could not make it smaller, but she also does not understand why
the residents could not have taken all the money they have spent with two attorneys and put it towards a fund to
buy the property from him and make a park on it. She thinks their money might have been better spent, but that is
just her opinion. There is a vacant lot next to the house where she lives and it has been vacant for the 20 years her
husband and she have lived there, but she knows that one day she is going to go out there and there will be surveying
stakes and somebody is going to build a house there. Those people that have that house will be able to look into her
windows. She has three options at that point: 1) she can buy the lot, 2) she can install shades, or 3) she can move
because by-right, that person has the right to build up there. She was really concerned with a lot of the people that
she has spoken with on the phone and asked them if they understood, and she wants to make sure that everybody
understands and in all of the communications to the neighbors, what by-right means. It means that in that
neighborhood, right now, without any rezoning, Mr. Stewart can build multi-family homes. That includes duplexes,
triplexes, and quadruplexes. He can build row style homes and the big one is that he can even place doublewide
mobile homes up there. He can do all of that by-right and that is his priority to do that. If he decides to do any of
those projects, the County Commissioners and the community are going to have little to no say about the amount
of curb cuts or the tree canopies or anything else because he is going to be able to do what he wants to do up here.
Any of those types of development are likely going to entail removing a large part of the trees and that is a beautiful
piece of property. She is not sure what Mr. Stewart is going to do with the property if this project is not approved
tonight. She hopes that the neighborhood is prepared for what that might look like in the future and understands
what Mr. Stewart can do with his property by-right.
Commissioner Zapple stated that this is a very difficult decision. He also spent a considerable amount of
time up there, drove the loop, and spoke with Mr. Stewart about the project. The piece of property is spectacular,
it did not happen that way. It is because of the work that he put into it and clearly selecting and working with the
trees that are on there, that is totally commendable. So much about the project is first-rate, a 500-year stormwater
which is what we want all of our developers to have. Again, the trees, adding sidewalks, it is way more than what is
expected. This is terrific. The circulation that Mr. Stewart has put together and he knows it does not come easy as a
builder to be able to create that, is fantastic, the internal circulation and even the traffic issues, which he has spoken
to Mr. Stewart directly about. Commissioner Zapple knows Mr. Stewart did the best he possibly could with that and
it is incredible. However, he has concerns about the easement situation that was brought up by Ms. Keelin and he
feels that is not resolved and that is a large part of that stormwater retention. Also the downstream aspects of the
stormwater plan he knows are of great concern to the community and also himself as he was looking at it, and
certainly adding more traffic in that area and the conflict with the Ogden Elementary School on the exit side of it.
Mr. Stewart explained to him how many different ways he tried to figure that out and use that property. He
understands Mr. Stewart is sort of hemmed in on all sides, but at the end of the day, we have a dangerous situation
of the exit of that property and the school. The height does not bother him. The R-5 and the R-7 are two zoning tools
that were created and approved by the Board last year, but these are not the end all. They are evolving zoning
districts and we are trying to sort out where it is we can best use them throughout the community. There is no doubt
that higher density is in our future and that is why they were brought forward. There have been a number of
developers and builders, which by the way he knows that the team that has been put together on this is first rate
and that project would look fantastic and would get done quickly, which he also knows has been another one of the
concerns. But the R-5 and the density, there are areas in the County that it will be employed and will be employed
a lot. He would strongly encourage Mr. Stewart to bring the plan to another area. It is fantastic and he knows that
Mr. Stewart wants to develop with Middle Sound Loop and he thinks Mr. Stewart has done wonderful work in the
Demarest Landing project. He hopes Mr. Stewart will not give up on it because he has put a lot of heart and soul into
creating a good project, but he would have to agree with the Planning Board Chair Donna Girardot that it is just in
the wrong place. There is some place for the project in New Hanover County and he looks forward to being able to
support it there, but he cannot support it at this location.
Commissioner Barfield stated that he is the one Commissioner that did not meet with anybody on purpose
as he has been trying to stay away from COVID-19. He actually encouraged the developer to bring his project forward
as the developer reached out to him to share his intent to bring it forward. He just did not know where it was. The
only thing he can say at this point is that he thinks it is a great project. The stormwater plan is phenomenal. It is just,
for him, in the wrong location. He did not realize how close it was to the loop, in terms of the roundabout as well as
the school and he cannot support it at this time.
Hearing no further discussion, Chairman Olson-Boseman asked for the Board’s direction on the request.
Motion: Chair Olson-Boseman MOVED, SECONDED by Commissioner White to deny the proposed rezoning to a
conditional R-5 district. While the Board finds it to be consistent with the purposes and intent of the Comprehensive
Plan because the proposal provides for a diversity of housing types in the area, and it provides appropriate
transitional infill development between the abutting roundabout/collector streets and the adjacent single-family
homes, it finds denial of the rezoning request is reasonable and in the public interest because the proposal is not
consistent with the desired character of the surrounding community and the density will adversely impact the
adjacent neighborhoods. Upon vote, the MOTION PASSED 4 – 1. Vice-Chair Kusek dissenting.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 616
PUBLIC HEARING AND DENIAL OF REZONING REQUEST BY DESIGN SOLUTIONS ON BEHALF OF THE PROPERTY
OWNER, TRINITY REFORMED ORTHODOX CHURCH, TO REZONE APPROXIMATELY 3.00 ACRES OF LAND LOCATED
AT 4725 SOUTH COLLEGE ROAD FROM R-15, RESIDENTIAL DISTRICT, TO (CZD) R-5, MODERATE-HIGH RESIDENTIAL
DISTRICT, IN ORDER TO DEVELOP 22 TOWNHOMES (Z20-04)
Chair Olson-Boseman opened the public hearing and requested staff to make the presentation.
Senior Planner Brad Schuler presented the request by Design Solutions on behalf of the property owner,
Trinity Reformed Orthodox Church, to rezone approximately 3.00 acres of land located at 4725 South College Road
from R-15, Residential District, to (CZD) R-5, Moderate-High Residential District, in order to develop 22 townhomes.
The subject site is located in the Monkey Junction area at the corner of South College Road and Hidden Valley Road.
East of the site are single-family neighborhoods that were developed in the 1980s and 90s. To the west on the other
side of South College Road is multi-family zoning within the City of Wilmington and other high density projects that
are also zoned R-15. To the south is the Monkey Junction commercial node, which is the major commercial node in
the southern portion of the County containing several big box retailers. The site is an undeveloped, wooded tract of
land consisting of approximately three acres. The applicant has agreed to a condition that would limit the structures
to one-story in height which would be approximately 14 feet. If approved, the development of the site must comply
with the standards of the R-5 district and other applicable regulations, including buffering and stormwater standards.
A bufferyard would be required along the northern and eastern property lines which abut single-family housing.
Due to the topography of the area, this area is known to have on-going drainage issues that cause flooding
on Hidden Valley Road and within the surrounding area. Again, the adjacent neighborhoods were developed during
the 1980s and 1990s, prior to the County’s current stormwater regulations. The applicant has examined the flooding
issue and has proposed additional conditions since the Planning Board meeting to address those issues. Specifically,
the applicant located a drop inlet near the southeastern corner of the property that does not currently have an
outlet. According to the applicant, this drop inlet collects stormwater from approximately 20 properties, and with
no outlet, the stormwater accumulates to flood the nearby area. To help alleviate the flooding issue, the applicant
is proposing to add a new outlet to the aforementioned drop inlet and to deepen and clean out an existing ditch
along the southern property to provide offsite flow. In addition, the applicant is proposing to replace an existing
stormwater pipe along the eastern property line to help reduce flooding that is occurring in the backyards of the
adjacent houses east of the site. The applicant is also proposing to make improvements off-site by replacing an
existing culvert under Woods Edge Road which is located approximately 650 feet from the subject site. The culvert
is currently 18 inches in size and will be replaced to a minimum 36-inch culvert.
The site, again, directly abuts South College Road, and people can travel over to Masonboro Loop Road via
Hidden Valley Road and with the interconnectivity in the area, people can get down to Piner Road through the
adjacent neighborhoods. As currently zoned, the site would generate about 10 trips in the peak hours if developed
under the existing zoning, which would allow for eight single-family homes. The proposal of 22 townhomes would
increase that to about one to five trips in the peak hour. There is one major STIP project in the area that will convert
the Monkey Junction intersection to a continuous flow intersection. However, that project is currently on hold for
the foreseeable future. As for active subdivisions in the area, there are currently three with about 220 more units to
be constructed. As to compatibility, again the site abuts a major roadway which it is expected most trips generated
from the site will utilize. Townhomes are commonly seen as a transitional use between single-family developments
and major roadways. With the conditions, the proposed townhomes will be shorter than the abutting houses to the
north.
The 2016 Comprehensive Plan classifies the property as Community Mixed Use. This classification
encourages densities ranging from eight to 15 dwelling units per acre. Overall, the proposal is consistent with the
Comprehensive Plan because it will provide for a mixture of housing types in the area, it will have an orderly
transition from South College Road to the existing single-family neighborhoods and it is in line with the density
ranges. The Planning Board considered this item at its March 5, 2020 meeting and recommended denial (3-2) of the
application. While finding the proposal to be consistent with the Comprehensive Plan, the Planning Board found
denial of the rezoning request is reasonable and in the public interest because the proposal is not of a desirable
character due to flooding that will adversely impact the adjacent neighborhoods. Since that meeting the applicant
has proposed six new conditions:
1.The structures shall be limited to one-story in height (approximately 14 feet).
2.The existing trees located within the required buffer areas shall be preserved and supplemented as
needed to provide an opaque screen.
3.Pet waste stations shall be provided within the development.
4.As proposed and agreed to by the applicant, the existing stormwater infrastructure shall be improved
along the site. The improvements will include replacing an existing stormwater pipe along the eastern
property line to allow flow to an existing drop inlet located at the southeastern corner of the site,
installing an outlet to and deepening and cleaning out an existing ditch along the southern property to
provide offsite flow from the aforementioned drop inlet.
5.As proposed and agreed to by the applicant, an existing 18-inch culvert under Woods Edge Road
(located approximately 650 feet south of the subject site), shall be replaced with a minimum 36-inch
culvert. Installation of the culvert improvements shall be coordinated with the County and NCDOT and
shall be constructed in accordance with NCDOT standards.
6.As proposed and agreed to by the applicant, the structures shall be constructed of either fiber cement
or brick exterior.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 617
Chair Olson-Boseman thanked Mr. Schuler for the presentation and invited the applicant to make remarks.
Cindee Wolf with Design Solutions and representing the property owners, Trinity Reformed Orthodox
Church, stated that the site is on the South College Road corridor, less than a mile north of Monkey Junction. The
parcel has been owned and envisioned for a church since 1970, which is before Hidden Valley subdivision was
actually developed and as of the last two years, a religious facility is a permitted use. Detailed design and permitting
was completed for this plan in the last two years, which included almost an 8,000 square foot structure, and 60
parking places with dual driveways onto Hidden Valley. However, as is often the case, congregations cannot always
raise the money to bring their image to fruition, and so this property has been put up for sale. Everyone realizes that
we have the good fortune to reside in a highly desirable area. It is no surprise that the expectation for our future is
an influx of new residents also wanting to live here. That dynamic keeps the County sustainable with an increased
tax base, which allows more capital improvements and better levels of services. Perhaps, in the past, there was not
as much diligence as there should have been to prepare for the future and the stormwater and traffic issues that
exist. However, that has changed as the County, including not only the Planning staff, but various departments,
Planning Board members, community stakeholders, and the Board spent an extended period of time creating the
Comprehensive Land Use Plan to address our imminent evolution.
This site is located immediately adjacent to South College Road and in the vicinity of several higher density
developments and was identified by the Comprehensive Plan as the Community Mixed Use place type. That
description focuses on small scale, but denser development patterns to provide an orderly transition from higher to
lower intensity areas and adds to the diversity of housing options. As stated by staff, the by-right density of this tract
is eight units in the R-15 district. What is confusing for the public is the misunderstanding that it means there only
has to be eight single-family homes on the lots. One of the purposes of the code's performance standards was to
provide for housing product diversity. She reviewed examples of two layouts that could be developed today and
noted that other than the limit of eight units, there is no assurance of the housing product or style, height, less
surface coverage, or the clearing limits. However, a conditional zoning district process allows for particular uses to
be established only in accordance with specific standards and conditions pertaining to each individual development
project. Essentially, this means that only this use, this layout, and these conditions can be developed when approved.
The proposal is for a 22-unit attached townhome community. The homes will be constructed and recorded for fee-
simple individual ownership at a price point under $250,000, which seems to be the typical lowest price in new
development these days. This type of real estate is eligible for FHA financing and the homes will be only one-story
floor plans, constructed with quality materials and serviced by both public sewer and water.
Some of the concerns the applicant heard early on were the height and that the people would be looking
into backyards. The townhomes will be one-story. Another concern was about the building materials to be used. The
applicant is committed to certain quality materials. Most of the homes along Hidden Valley Road are on a septic
system; this project will have public sewer which is better all-around for the water quality. A sidewalk will flank the
access drive. Stormwater management will be by a pond which outlets to the College Road system away from the
existing neighborhood. Bufferyards will consist of the maximum existing vegetation that can be preserved and then
supplemented as necessary to provide the visual opacity required between attached and single-family housing.
Along with the site plan, the developer has stipulated several conditions as referenced by staff such as the maximum
of 22 units (where eight units an acre is 24, this request is less than what is being asked for as far as the zoning
district), the one-story limitation makes a big difference, quality construction materials, selective construction
clearing methods, increased plantings in the buffer, pet waste stations, and on- and offsite stormwater
improvements. The tract is heavily wooded with the majority of trees being small caliper pines and a few hardwoods
and there were no significant (over 24 inches) caliper trees identified in the field survey. While on the site plan there
are trees shown, they are just the regulated trees that are required to be located, but there is also a multitude of
smaller caliper trees that can be saved by selective under brushing in the bufferyards. Additionally, the developer is
committed to enhancing the standard required buffer planting which is three rows of six-foot-high evergreen shrubs
with either preservation or the addition of at least nine canopy trees per 100 linear feet. These will be staggered to
provide not only additional height to the screening, but also add visual interest rather than a simple hedge
appearance. The project is not in any flood hazard area and it drains towards the Motts Creek basin. The most
discussed topic at the community and Planning Board meetings was the existing drainage issues along the Hidden
Valley Road frontage. She then asked Joe Boyde, Civil Engineer with Withers and Ravenel, to review the
improvements being committed to in order to remedy the drainage issues. He has field reviewed the existing
conditions and prepared an assessment of the localized drainage situation.
Joe Boyde, Civil Engineer with Withers and Ravenel, stated at the Planning Board meeting there were
questions from the community on the existing stormwater in the area and it is known to be a flooded area during
large storm events. He confirmed that he personally went out onsite to review the drainage issues. He then reviewed
the slides to explain where the water flows to and how it does not go anywhere and that during large storm events,
it hits the drop box and floods out. This project is proposing to provide relief and open up a swale that will drain into
the College Road ditch. The proposal is to release the flow so it releases towards College Road. The site itself will
meet state and local requirements, which is up to a 25-year storm post development and meets all of the water
qualities standards of the state. Additionally, another key is College Road itself. There were complaints at the
Planning Board meeting that doing these improvements would not be enough to release the water that backups
downstream. The developer has agreed to increase the culvert at Woods Edge, 600 feet downstream to 36 inches,
to provide relief and allow for better drainage. Mr. Boyde continued to review the slides to show how the proposed
stormwater improvements would work. In response to Board questions, Mr. Boyde confirmed that the 18-inch pipe
would be increased to at least a 36-inch pipe.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 618
Ms. Wolf continued the presentation stating that this area’s desirability translates into the fact that the
developable land is limited and prices are high. Material and construction costs are continually increasing and yet, it
is acknowledged the undeniable need for more affordable homes for our young people, workforce, and aging
population. In these times, infill redevelopment and some increased density is the key to making a good project
feasible and not cost prohibitive. Holly Grove is a moderate density townhome project at under eight units an acre.
That is an acceptable transition use along busy highway corridors. Although NCDOT will not allow a driveway onto
College Road, the site’s location and access is directly to the arterial street via Hidden Valley Road, not by winding
through established neighborhoods. The difference in vehicular trip generation is negligible and the capacity is
available on the adjacent roadways. As required, the project must meet all state and local permitting standards.
Additionally, the developer is committing not only to remedy an existing ponding issue adjacent to the site, but also
to increasing the size of the downstream pipe. These are needed improvements now that will not get made until
someone like this developer can justify the cost and benefit. The developer totally concurs with the staff
recommendation that this proposal is consistent with the Comprehensive Plan and with the stipulated conditions.
The fact that this is a conditional district, Holly Grove would be reasonable and in the public interest because it
provides increased housing with infill development on an underutilized tract of land and growth should be
accompanied with a variety of housing types.
Chair Olson-Boseman announced that seven people signed up to speak in opposition to the request. She
asked the speakers to step forward to provide their remarks.
Phil Triece, resident of Crosswinds Drive, spoke in opposition to the request stating he is a realtor, long-
term member of the Crosswinds homeowners’ association (HOA), and heads up the drainage for the HOA. The
Crosswinds subdivision has 250 homes and is located just north of the 2.9 acres. Part of the subdivision’s stormwater
flows into the Wedgefield subdivision pond that is adjacent to the 2.9 acres. The outlet pipe from his subdivision’s
pond empties into the South College Road's ditch right at the northern property line of the subject site. The
Crosswinds HOA Board is unanimously opposed to this R-5 rezoning for 22 units versus the eight units under R-15.
The Wedgefield HOA Board also opposes the rezoning as do the Hidden Valley subdivision residents. All three
subdivisions experience flooding on a regular basis, not only because they are in a flood prone area, but because the
stormwater flows from these neighborhoods near South College Road to the South College Road ditch and then
flows southward from Crosswinds Drive to Greenbrier Road, where it crosses under South College Road and into
Motts Creek. The pipe under South College Road is about 1,300 feet south of the subject site at Greenbrier Road and
is less than 40 inches. It is undersized to handle heavier rains, so the ditch water submerges the pipes and water
backs up into the neighborhoods. NCDOT does not have any funding to enlarge the piping so outflow of stormwater
from the subject site would only exacerbate this flooding.
The neighborhoods sought relief from the Board of Commissioners and the County contracted with Dan
Dawson, a Professional Engineer, to do a drainage study of Crosswinds and Hidden Valley and that was presented in
1998. The study was not considered by Planning staff as part of their initial deliberations before making a
recommendation to the Planning Board. After the rezoning petition was filed, Mr. Triece requested the drainage
study from the Engineering Department so it could be considered by Planning staff. Prior to the Planning Board
meeting, County Engineer Jim Iannucci advised that the study was not able to be located, but the Crosswinds –
Hidden Valley area is now included in the list of priority areas submitted to the hazard mitigation grant program of
FEMA. Mr. Iannucci made him aware that the County has not received any money from FEMA under the Hazard
Mitigation Grant Program and it is uncertain if any funds will be coming that will help the flooding of Hidden Valley.
However, he did note that some ditches in Hidden Valley and Crosswinds may be taken over by the County next July
1st as part of the county-wide stormwater plan, if they qualify as “over land ditches”. Mr. Iannucci is well aware of
the current and historical issues with flooding and that enlarging the pipe under South College Road at Greenbrier
Road by NCDOT is needed to relieve the backup of water into the neighborhoods. Mr. Triece believes everyone
acknowledges there is a problem. The County stormwater plan will not include taking over the NCDOT ditch along
South College Road. The applicant has proposed improving ditches, but in heavy rain events that cause flooding, it
will still occur when the South College Road ditch backs up, even with what is being proposed from the drop inlet.
Upgrading the pipe under Woods Edge Drive will help incrementally, but stormwater backup will still flood Hidden
Valley when the Greenbrier Road pipe backs up.
Mr. Triece concluded his comments stating that the County standards for stormwater ponds are inadequate
to keep stormwater from discharging into the South College Road ditch during rainstorms. It will worsen the flooding
even with the developer's proposed stormwater pond. Until NCDOT enlarges the pipe, there does not need to be
higher density development making the flooding worse. The proposed R-5 residential district does not exist
th
anywhere along the east side of South College Road, from south of Greenbrier Road up to South 17 Street. This
would be spot zoning, the only spot not zoned R-15 along the entire stretch. The proposed rezoning is inconsistent
with the existing residential development in Hidden Valley. If the site was developed with eight units as currently
zoned, that in itself would be a higher density than the lots surrounding it and that would be a more orderly transition
than going to R-5. Directly across Hidden Valley Road are four homes that face the site and will face eight homes if
the site is developed as currently zoned. The proposed rezoning would result in 22 homes or five times the density
facing those homes. Those homes will also be facing the rear of the eight units backing up to Hidden Valley Road
with little buffering. It is difficult to conclude that this single parcel surrounded by half-acre single-family lots would
better serve as an orderly transition by being developed with 22 units rather than the eight units allowed under
current zoning. The proposed development is detrimental to surrounding development, its higher density attached
housing is too inconsistent, and will worsen the flooding. Development of the parcel in the current zoning with eight
units rather than 22 would provide a more reasonable transition to South College Road. The subdivisions feel that
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 619
the proposed rezoning should be denied because the density and flooding issues would adversely impact the
adjacent neighborhood.
Michael Garrison, resident of Hidden Valley Road, spoke in opposition to the request stating that he is the
single closest property owner to the proposed project and the entrance to the project will be immediately next to
his driveway. While concerned about many aspects of the project, there are two he is most concerned with, which
are flooding and privacy. He has lived at his current address for the past 25 years and it has been well documented
how severe the flooding is in the area. He then shared photos with the Board of flooding issues not due to hurricanes
in the neighborhood noting that any significant rain event can cause flooding. This takes place with all of the site of
the proposed project having no impervious surfaces. It is understood there is a retention pond on the property to
catch the runoff from the 22 roofs, driveways, and roads, but the retention pond will empty into the already existing
troubled stormwater system. The concrete stormwater pipe at the front of his house that connects to the
stormwater inlets has collapsed. The pipe and the hole have been filled with gravel and he has seen the same thing
happen on the property across the street from him three times. He asked for the Board to consider its decision of
the request as approving it could quite possibly cause water damage to the homes in Hidden Valley, Wedgefield,
and Crosswinds. This would also include the potential homeowners of the proposed project who will be purchasing
without any knowledge of these current conditions. As to privacy, there appears to be little to no buffer on the east
and south sides of the project. Driving in or out of Hidden Valley, people will be looking into the backyards of eight
of the units and everyone pulling in and out of the proposed project will be able to look into his yard. The Board is
being asked to deny the request because of these issues, as the project is not consistent with the surrounding
community, and density will adversely impact the adjacent neighborhoods.
,
Michael Kinney, resident of Hidden Valley Roadspoke in opposition to the request stating that he lives two
houses down from Mr. Garrison and will also be affected by the proposed project. He is in complete agreement with
Mr. Triece and Mr. Garrison. When he and his wife moved into their home in 1979, the subdivision was just being
developed. In 1984, Hurricane Diana came through and the water was deep enough to flood his yard within about
15-feet of his house and it has not gotten any better. The flooding has worsened over the years as developments
have been built around Hidden Valley. As the prior speakers shared, the result now is that any time there is more
than two or three days of heavy rain, it floods. The subdivision is an island during any major storm. He hopes the
Board will deny the request.
Charles Krueger, resident of Hidden Valley Road, spoke in opposition to the project stating that his home is
located directly across the street from the only entry and exit for the proposed development. His sons’ bedrooms
are in the front of the house and as such, are only 94-feet away from the only entry and exit of the proposed
development, which he assumes will be the entry and exit for the construction site. His sons are young and still need
naps, and it has been documented by the American Academy of Pediatrics and John Hopkins Hospital about the
necessity of nap time for brain development and overall health and development of toddlers and young children.
There can be side effects in the form of learning difficulties and depression from lack of daytime naps, not to mention
the stress from the lack of sleep for a young child that it can put upon the rest of a family. His understanding is that
the construction will take two years. This would result in essential nap time for his younger son to be completely
impossible. Also if the proposal is approved, once built the only exit will be pointed towards his home. If the
development remains consistent, that means potentially 44 to 64 cars will be added to this one tiny area of the
neighborhood and any time the cars leave their houses and it is not full daylight, headlights will be shining directly
into his children's bedroom and his family room. If the current zoning remains in place and the development would
stay consistent or similar to the current density, there would be four to eight family homes with four to eight
driveways with multiple entry and exit ways for loud construction vehicles. His home would only have to bear the
construction of one or two homes with the entry and exit directly across from his home rather than the construction
of the 22 houses. The result would be only having one set of headlights shining into his home as opposed to being
across the entry and exits of 22 houses with at least 44 cars. This proposed development puts all of that on his family
and will have an effect on the well-being of his children.
In applicant rebuttal, Ms. Wolf stated that each opposition speaker spoke of current issues and how they
were not being fixed. Her client is offering to remedy those problems and go above and beyond by doing additional
work offsite to remedy a problem that is created in addition to that. The backup point at Woods Edge (which the
developer is committed to remedy), any new runoff from the site has to be detained on the site which is a change
compared to the older developments that did not have stormwater regulations at the time, and they cannot go all
the way down to Motts Creek and correct every pipe down the line. That is what the County's new stormwater
program is hopefully going to address in highly identified areas. The church plan had several coverages to the
developer and the discussions keep being about stormwater and how the proposal is going to affect it. The only
affect that this project will have on it is remedying some existing problems, because the proposal for the additional
density has nothing to do with increased stormwater. It could be the same amount of stormwater with any type of
development that goes on the site. As far as privacy and the adjacent neighbor, what is being proposed is a fence
and enhanced buffer along that area and that common line. The units that back up to Hidden Valley Road, there will
be a need to provide privacy in the backs of the units with streetyard landscaping, possible fencing for those
particular units, because they do back up to Hidden Valley. All of the issues can be mitigated and remedied. Whether
this project or any other project by-right happens, there will be construction for a period of time. If it is individual
houses, it may string out for ten years, but those types of things are unknown. The point is that this particular project
is conditioned, those conditions are above and beyond what any by-right type of development would entail, and it
is consistent with the Comprehensive Land Use Plan. It also allows some more affordable housing in the community.
She then stated that the developer would elaborate on the things his is trying to help the community with through
his firm’s efforts.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 620
Chase Elam, developer with Harbor Island Investors, stated that this project has been thought about long
and hard. The proposed plan is an attempt to do something that made sense. A lot of thought has gone into the plan
and he feels with the units being one-story, that is the most private product that can be built on the site. His firm
does want to go above and beyond and put some large trees along the back and the side and even the Hidden Valley
side to provide further screening from the existing homeowners. As to stormwater, local and state stormwater
regulations have to be followed and the site will not add to the problem. What he wanted to do additionally was
really look into the problem and take into consideration what the people were saying in the last meetings that did
kind of blindside him. His firm went to lengths to understand it and is willing to spend money to help fix the problem
to be good stewards to the community. There will be a culvert under the development’s entrance and exit, the swale
will be significant, and the down street pipe being upsized will provide a lot of relief for all the communities. That
will include the homes to the north, whose stormwater pond traditionally has dumped into that ditch and it has not
gone anywhere because the ditch in front of this property has not been maintained. The goal with the proposed
development is to be more harmonious with the surroundings.
In opposition rebuttal, Mr. Triece stated that he applauds the applicant for making the change in the
drainage pipe at Woods Edge. It will only have an incremental effect, because when the water backs up from
Greenbrier it will submerge both sides of that. The only new thing to him is the Woods Edge pipe. The Planning Board
did discuss the drop inlet and was informed by Mr. Iannucci what he wanted to do about it. The Planning Board
member who was well familiar with all of the drainage problems down there is the former NCDOT Division 3 Engineer
and he is the one who made the motion to deny the request due to the drainage issues. As to density, two different
Planning Board members asked the developer if he would reconsider the density and he responded no. As to the
orderly transition, the applicant is saying there is a transition but there is no buffering between attached and
detached housing. He works with a lot of developers and thinks the points made about the R-5 zoning were good. It
is appropriate in a lot of different areas, but if it is used inappropriately in these areas that are flooded and jammed
in the neighborhoods that are established on these small lots, there will be people opposing the R-5 zoning in
general. He hopes the Board will deny the request as was done by the Planning Board.
Steve McIntosh, resident of Wedgefield Drive, spoke in opposition rebuttal stating that his home will be
directly behind the site. He is a real estate professional and wanted to make comments about the negative influence
of marketability in this area. When requesting a change in zoning, a positive influence needs to be brought forward
to the area that will be impacted. As to the diversity of housing options, affordability, and housing types, in
information he pulled about the area in a three-tenths of a mile radius to his neighborhood, there are already existing
homes starting under the $250,000 price point up to $435,000 and there are a wide range of homes sizes. There is
new construction in the area, homes with HOAs and no HOAs, there are neighborhoods that backup to patio homes,
and there are townhomes within a half-mile radius. All are using the same commercial areas of Monkey Junction
and this project is not bringing forward anything new and is on top of the existing drainage issues. There is nothing
positive about this request for rezoning from his perspective and he would prefer it to be developed based on the
current zoning.
Chair Olson-Boseman stated that there was one person signed up to speak in favor of the request,
apologized to Mr. Washburn for not recognizing him earlier, and invited him to step forward to speak.
Jonathan Washburn, resident of Market Street, spoke in support of the request stating he is here as a
member of the public and not as an attorney. He is a friend of the church and assisted the organization when it
bought this property. As previously stated, it turned out it was going to be too expensive to build and the church
found an existing building elsewhere. The one thing he wants to bring to the Board’s attention is that, because he is
a friend of the church he attended the Planning Board meeting and it was a narrow defeat of this request. The
Planning Board has preprinted resolutions, one in favor and one for denial of the recommendation. The interesting
thing that occurred at that meeting was they specifically said they did not want to sign the preprinted resolution
because it says it does not meet the conditions. The Planning Board said that the reason it was being denied was
that there is a drainage problem 600 feet down the road and this might be more of a problem. The Planning Board
wanted to change the resolution to take away the fact that it says that it does not meet the criteria because they
felt it met the criteria. He thinks that point is relevant, that the Planning Board thinks it meets the criteria.
Hearing no further comments, Chair Olson-Boseman closed the public hearing and opened the floor to
Board discussion.
Commissioner White stated that normally the Board hears objections to traffic and stormwater. When the
Board deals with density it adds cars, when it’s a downzoning it attracts cars, and sometimes people oppose both as
it relates to traffic. When talking about stormwater, the rain either falls or it does not. Nothing the Board does or
decides affects the amount of rain. Assuming that the Board does nothing, it is known how bad the flooding is and
a very compelling history of it has been heard and about the failure on part of county government to figure out how
to solve or help. It has been heard help is on the way from hazard mitigation funding, possibly, and the stormwater
fee service. He asked if it was correct that was going to happen. County Engineer Jim Iannucci confirmed that was
correct. Commissioner White then asked if no action is taken and the site is developed by-right then nothing
improves until the County can undertake the improvements. Mr. Iannucci responded that was correct and what is
in place has been so since September 2000, which was to control the runoff to the predevelopment conditions up
to a certain amount of rain. If that is exceeded then there could be flooding, but at least for the impervious being
added more water is not being allowed into the ditch system up to the eight inches of rain in the 24-hour period,
than there is currently. Impervious is impervious, by-right or if they do something dense, they basically have to
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 621
control that difference and also analyze a 100-year storm, which is ten inches of rain and make sure it is not getting
into finished elevations of existing or the proposed homes.
Commissioner White stated that the proposed improvements would not be happening unless the
development is approved tonight. He then asked if the Board voted to approve the request and the money the
developer is spending offsite with the enlargement of the drainage ditch, etc. which does not fix it, but does help
make it better, if that is an accurate engineering statement. As to the stormwater runoff as it pertains to those points
shown by Mr. Garrison on the property lines, he asked would the stormwater runoff be improved or would it not be
improved. Mr. Iannucci responded that if they were doing improvements to the downstream and then have a pond
to control whatever kind of construction that is done on this new site, there would be improvement. Commissioner
White then asked why are people opposed to this. Mr Iannucci stated he thinks that it really comes back to and why
there was extensive research done for a stormwater program, while this Board approved it and due to things it will
not start up until next year, is to do those downstream improvements. That is something that has not been able to
be done in the past, to look at it from the overall system and do county-wide improvements, look at the downstream
perspective. That is something that he thinks the County will be able to team with developers on. There will be some
public-private type things or as projects such as this request come in, and staff is starting to analyze and update the
ordinance and have them identify the downstream improvement, but then have the stormwater services group
implement them.
Commissioner White asked if anyone knows if the Planning Board would have voted differently had they
known about these proposed offsite improvements. Ernie Olds, Planning Board representative, stated stormwater
was a big component and was a detractor from other conversations about density and had those improvements
been shown, he thinks the Planning Board would have had a different vote, it would have tied it if not carried.
Commissioner White stated setting the gentleman that has children aside and he understands the point about naps
and construction noise, that is not a reason to vote to deny something and under the law it cannot really be
considered. However, if he is the other folks that are worried about the flooding and hears that it is going to be
improved, even marginally, and even more so after the efforts of the County later, he would be in support of this if
he lived there.
Commissioner Barfield stated that the flooding is the concern. He and Mr. Iannucci met with Wedgefield
and Crosswind residents in 2009 or 2010 due to significant flooding problems with the pond and drainage pipes,
there was lawsuit between Crosswinds and Wedgefield and the County helped facilitate that as well. However, the
roads in that area still flood with a heavy rain. He is concerned that until the stormwater program is actually
implemented, the proposed project may cause adverse effects on those areas. While the drainage pipe and pond
between the two communities has been fixed, there is still significant flooding on Wedgefield Road. He understands
that it may be improved a little with this project, but for him it would have to be more than a little to make things
work in that area. He asked how soon is it anticipated the County having the stormwater management program up
and running and if it would be spot areas that would be fixed first before going to one area. Mr. Iannucci responded
that the decision was made to begin the fee-based program in July 2021 instead of this current fiscal year and there
will be two parts. First, there will be maintaining the ditches and conveyances that carry water across the County.
The determination will be made if it is in a permitted system and the County is looking to improve and maintain
those conveyances to carry water across the County. The second part is capital improvement which is where staff
started identifying projects and this was one of the areas because of the lawsuit that came before Judge Hockenbury.
Staff looked at some of these areas and identified priority areas where they want to start doing the capital
improvements. Not only doing the maintenance on behalf of the residents, but actually doing improvement projects
and trying to get other types of funding. Those have been submitted for hazard mitigation, but the plan moving
forward is to have capital built into the stormwater program and be able to do the projects now. They will not all be
done right away, but identifying the areas that are most flood prone, structures impacted, and try to work it from
there and work through those priority projects. As to the time frame to look at this particular area, about 40 different
projects across the County have been identified. This area was one of the areas that ranked fairly high and was
included in the projects that were put in for FEMA funding, but the program will not start until the County starts
collecting the fees in July 2021.
Commissioner Zapple asked if the Greenbriar culvert is on the project list or any list to be either
reconditioned or upsized. Mr. Iannucci responded that is where it comes down to what is in the NCDOT right of ways
and what is on private properties, and may be undersized and things of that nature. Staff has looked into some of
the programs that NCDOT has with the City of Wilmington with its stormwater program and the possibility of doing
joint projects. That may be something where the County would be able to step in with the stormwater program, do
improvements or possibly fund something with NCDOT, similar to some of the things staff is trying to do in other
parts of the County. If it is undersized, that is where the County does not have that asset management program to
really get an idea of what is out there. If it is within the NCDOT right of way, the County would have to work starting
with the NCDOT maintenance department and taking it up through their design teams. As to whether he thinks this
is a contributing factor to the persistent flooding this area has been having, Mr. Iannucci stated the floodway even
above these projects from south of the County library site where the County line starts on both sides of College Road
down to Motts Creek where it goes underneath College Road, was identified as another area that improvement in
either getting the water out of there or upsizing the pipes would have some benefit. Commissioner Zapple stated
part of the problem is there is a drop box that is taking the shed from 20 different properties and now it has been
figured out how to relieve it, but in some ways its moving the flood water down to the South College Road ditch and
the culvert that goes underneath Hidden Valley. He asked Mr. Iannucci if he believes there is enough capacity in that
ditch or will there be a large pool of water collecting in that area due to allowing the water to move freely down the
road. Mr. Iannucci responded that up to the eight-inch rain event, the developer would control that to not allow
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 622
additional water off of the site than what leaves there right now. If the capacity is not available downstream then
that could be the problem like he said earlier. There was a previous project when the church came in and submitted
stormwater plans that were similar and there were some things identified. Making improvements to the drop box
would definitely be a first step, but looking at the downstream situation is really something that is an unknown.
Commissioner Zapple asked Mr. Olds if it was correct that during the Planning Board meeting that the only
change that was made during the meeting was the upsizing of the pipe at Woods Edge or if there were other
stormwater improvements made during the meeting. Mr. Olds responded that he would have to see an exact copy
to be completely honest. There were certainly improvements made to the stormwater that were not seen, but
exactly how much or how many he is not certain. He confirmed that he has seen information during this meeting
that he did not see at the Planning Board meeting concerning the stormwater and how to control it. As to whether
any information he saw tonight would have changed his mind, Mr. Olds confirmed that it would have. He further
confirmed that is where most of the focus of the Planning Board’s comments were about the flooding issue and the
reason why the motion was changed to read as it did.
Commissioner Zapple asked in regard to Mr. Kruger’s issue, if he heard Ms. Wolf state that there would be
a vegetative buffer put in and an opaque fence along the south side along Hidden Valley Road. Ms. Wolf responded
that against Mr. Krueger’s property, the sideline is where the building is the closest and there is a 20-foot buffer,
and the building location is setback 25 feet. The buffer would be buffer option b, which included a fence in addition
to the enhanced landscaping, the extra trees. What she was referring about the rear units facing Hidden Valley Road
is just for the site’s own purposes, there will be a desire to protect the privacy of those units. It would not be the
same as a buffer planting, but absolutely there would be left as much vegetation along the right of way and along
the setback from that distance and perhaps those eight units might have small fenced-in backyards, so they would
have the additional privacy. There were two landscaping and buffering options. One had a fence and one did not
have a fence. All have the additional nine trees per 100 feet, additional to the standard buffer plantings, which are
evergreen shrubs up to six-feet. Against that adjacent property owner, side by side, it is the closest place the
developer would absolutely use option b, which included the fence along the boundary. Along the back, there would
be about a 35-foot setback to the backyards of the people up in Wedgewood and 35 feet from the back of the units
to Hidden Valley. Those would probably be just the planted buffers unless the developer wanted more privacy for
its owners and then there is always the opportunity for a fenced backyard.
Hearing no further discussion, Chairman Olson-Boseman asked for the Board’s direction on the request.
Motion: Commissioner White MOVED, SECONDED by Vice-Chair Kusek to approve the proposed rezoning of the
subject property to a Conditional Use R-5 district as the Board finds it to be consistent with the purposes and intent
of the Comprehensive Plan because the proposal provides an orderly transition of residential densities from higher
intensity to lower intensity areas and provides for the provision of a range of housing choice and diversity in the
area. The Board also finds approval of the rezoning request is reasonable and in the public interest because the
proposal is in line with the density range recommended for the Community Mixed Use place type, and it supports
opportunities for more affordable housing and assists with providing a range of housing types to the area and
includes the following conditions:
1.The structures shall be limited to one-story in height (approximately 14 feet).
2.The existing trees located within the required buffer areas shall be preserved and supplemented as
needed to provide an opaque screen.
3.Pet waste stations shall be provided within the development.
4.As proposed and agreed to by the applicant, the existing stormwater infrastructure shall be improved
along the site. The improvements will include replacing an existing stormwater pipe along the eastern
property line to allow flow to an existing drop inlet located at the southeastern corner of the site,
installing an outlet to and deepening and cleaning out an existing ditch along the southern property to
provide offsite flow from the aforementioned drop inlet.
5.As proposed and agreed to by the applicant, an existing 18-inch culvert under Woods Edge Road
(located approximately 650 feet south of the subject site), shall be replaced with a minimum 36-inch
culvert. Installation of the culvert improvements shall be coordinated with the County and NCDOT and
shall be constructed in accordance with NCDOT standards.
6.As proposed and agreed to by the applicant, the structures shall be constructed of either fiber cement
or brick exterior.
Upon vote, the MOTION FAILED 2 - 3. Chair Olson-Boseman, Commissioner Barfield and Commissioner
Zapple dissenting.
PUBLIC HEARING AND APPROVAL OF REZONING REQUEST BY LEE KAESS, PLLC ON BEHALF OF THE PROPERTY
OWNER, LESTER R. AND SUZANNE B. EDWARDS, TO REZONE APPROXIMATELY 2.18 ACRES OF LAND LOCATED IN
RD
THE 100 BLOCK OF FOREST LANE, ADJACENT TO THE INTERSECTION OF CASTLE HAYNE ROAD AND N. 23 STREET,
FROM R-15, RESIDENTIAL DISTRICT, TO (CZD) O&I, CONDITIONAL OFFICE AND INSTITUTIONAL DISTRICT, TO
OPERATE A PERSONAL SERVICES AND OFFICE ESTABLISHMENT (Z20-11)
Chair Olson-Boseman opened the public hearing and requested staff to make the presentation.
Planning Manager Ken Vafier presented the request by Lee Kaess, PLLC on behalf of the property owner,
Lester R. and Suzanne B. Edwards, to rezone approximately 2.18 acres of land located in the 100 Block of Forest
rd
Lane, adjacent to the intersection of Castle Hayne Road and N. 23 Street, from R-15, Residential District, to (CZD)
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 623
O&I, Conditional Office and Institutional District, to operate a personal services and office establishment. The site is
located at 102 Forest Lane in the Wrightsboro area, which is directly west of the intersection of Castle Hayne Road
and N. 23rd Street, approximately one-mile north of Martin Luther King, Jr. Parkway. The proposed area to be
rezoned consists of two parcels totaling 2.18 acres. The primary parcel with the existing structure consists of 1.84
acres on the south side of Forest Lane, while a 0.34-acre parcel on the north side is proposed to serve as the parking
area. There is an existing equestrian paddock that will be partially converted to serve as the parking area. The
property is zoned R-15, Residential, which reflects the general zoning designation in the area west of Castle Hayne
Road, with the exception of the O&I parcel northeast of the site, which was rezoned O&I in 1999, and commercial
districts east of Castle Hayne Road.
The 3,601 square foot structure is proposed to be used primarily for a spa, salon, and barber/beauty shop
under the land use “Personal Services” as defined in the UDO. In addition, the applicant has requested that the land
use Offices for Private Business and Professional Activities be included as part of the request in order to
accommodate a potential private office in the future. A landscaped strip with a minimum width of 10-feet will be
installed on the boundaries of the parking lot parcel with the residentially zoned properties to the north and west
per UDO requirements. Landscaped buffers, setbacks, and streetyard plantings are all required in certain locations
on the site per UDO requirements, and the site does contain significant mature vegetation that can assist in meeting
these requirements.
Direct access to Castle Hayne Road is provided to the site via Forest Lane, which is a private drive consisting
of a 15-foot wide asphalt travel surface within a 60-foot private right-of-way. New Hanover County Fire Services has
indicated that Forest Lane will need to be improved to 24-feet in travel width in front of the business and parking
lot, which is a distance of approximately 250 linear feet, and the sight triangle at the intersection with Castle Hayne
Road will need to be improved. Similarly, NCDOT is requiring that the entrance to Forest Lane from Castle Hayne
Road be brought up to commercial standards which include clearing obstructions within sight triangles to provide
sufficient sight distance as part of the NCDOT driveway permitting process to connect to Castle Hayne Road.
The primary proposal to use the building entirely as a salon is anticipated to generate approximately four
AM peak hour and five PM peak hour vehicular trips. If trips were to be generated using the ITE manual at 3,601
square feet, the trip generation would be 23 AM peak hour and 33 PM peak hour trips. The total increase in trips
compared to what is being generated at this moment could be 22 AM peak hour and 32 PM peak hour trips. Again,
the initial intent of this request is to use it entirely as a salon-spa, so that is the only scenario being looked at with
an increase of four AM peak hour and five PM peak hour vehicular trips.
As the site does have direct access to Castle Hayne Road which is an arterial street, people can also access
rd
23 Street, Gordon Road, and Blue Clay Road for the arterial streets. Two TIAs in the vicinity were analyzed for this
request, Preservation Point and Wrightsboro Commons, the details of which are in the staff report. There are also
two STIP projects in the vicinity. One being the project to widen Castle Hayne Road from I-140 south to Division Drive
rd
and second, a project to construct a roundabout at the intersection of Castle Hayne Road and N. 23 Street, of which
Forest Lane will have an access point to the roundabout. These projects do not have a firm date due to COVID-19.
Six areas subdivisions under development were analyzed as part of the analysis of proposals with the unit count
shown on the screen as being 794.
As to compatibility, Forest Lane functions as a dead end private drive. The applicant owns all the parcels
fronting it with the exception of one-single family dwelling to the west of the proposed site. The O&I district is the
least intense commercial zoning district and typically functions as a transition between residential areas and more
intense commercial areas, particularly, along major thoroughfares. The Comprehensive Land Use Plan anticipated
that a number of single-family homes adjacent to Castle Hayne Road would transition to commercial uses in the
future.
Reuse of the existing structure in its appearance with minor modifications to meet building code
requirements maintains compatibility with the immediate area. Any future proposal to replace the structure or
expand it by more than 10% would be classified as a major modification and would be subject to completing the full
conditional rezoning process, which includes a Planning Board recommendation and consideration by the Board of
Commissioners. There are similar areas where homes have transitioned to low-intensity commercial uses in the City
of Wilmington along Oleander Drive east of Pine Grove Drive and Wrightsville Avenue east of College Road.
The 2016 Comprehensive Plan classifies the property as a Community Mixed Use place type, which
promotes community scale office and professional services and the revitalization of commercial corridors through
infill and redevelopment. This is a common place type along major roadway corridors and the highly travelled roads.
Staff finds the proposal is consistent with the intent of this plan. The Planning Board considered this application at
its June 4, 2020 meeting and recommended approval (7-0) with the following conditions:
1.The property shall not be used for a tattoo parlor, shoe or clothing repair, or a drop off laundry.
2.The hours of operation for all businesses other than the beauty salon shall be from 8:00 a.m. to 7:00
p.m. with no Sunday hours.
3.There shall be no amplified outdoor music on the property.
Since the Planning Board meeting, the applicant and the adjacent property owner to the west have had
additional dialogue and have agreed upon revised the conditions as follows:
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 624
1.The property shall not be used for a tattoo parlor, shoe or clothing repair, or a drop off laundry, or a
stand-alone nail parlor.
2.The hours of operation for all businesses, other than the applicant’s beauty salon use, shall be from
8:00 a.m. to 7:00 p.m. with no Sunday hours.
3.There shall be no amplified outdoor music or outdoor events on the property other than by or ancillary
to the applicant’s beauty salon use.
4.There shall be only one business permitted on the property.
Additionally, there has been more dialogue today between the applicant and the adjacent property owner
and a fifth condition addressing compliance with the County's noise ordinance specifically to hold it to the residential
standard will be proposed. The applicant’s representative, Amy Schaefer with Lee Kaess, PLLC, will read that into the
record verbatim as there was not an opportunity to insert it into the presentation due to that agreement occurring
this afternoon. As such, staff recommends approval of the request with the revised conditions as well as the fifth
condition that Ms. Schaffer will describe.
Chair Olson-Boseman thanked Mr. Vafier for the presentation and invited the petitioner to make remarks.
Amy Schaefer, attorney with Lee Kaess, PLLC and representing the applicant, stated that this is an adaptive
reuse of a current property, and there is no proposal to increase the impervious surface except for what is necessary
to make Forest Lane comply with NCDOT and County requirements for the road. Her clients live on the property and
raise their family there, and now want their daughter to have her beauty salon at this location. Ms. Schaeffer then
reviewed the slides showing the property noting what her clients own and the current property is zoned R-15 and it
is located off of Castle Hayne Road. It is highly commercial around the property. There is a Hardee's restaurant
looking north on Castle Hayne Road and looking south, there are additional businesses. There is a residential lot next
to her client and on the other side, there is what appears to be a house that is now being used as a business. She
feels Mr. Vafier covered all of the Comprehensive Plan components and how her clients are complying. This request
really does focus on small scale, compact mixed use and brings the necessary business to the location and is not
really impacting anything. The corral across the road is already compacted gravel and her clients will just be
supplementing that and is where the parking will be. She then reviewed the four revised proposed conditions as
shown earlier by Mr. Vafier. A community meeting was held and there has been ongoing dialogue with the
neighboring resident who did ask for one condition that is not on the list as follows: For so long as the properties
adjacent to Forest Lane are zoned residential, the property shall be subject to New Hanover County noise ordinance
provisions for residentially zoned properties. Her client is also in agreement with the fifth condition.
Commissioner Zapple asked what were the hours of the beauty salon. Ms. Schaefer responded that the
beauty salon hours are from 8:00 a.m. to 7:00 p.m. However, they do have some Sunday hours if there is a Sunday
wedding and a bride needs her hair done. The neighbors indicated they were not concerned about Mr. and Mrs.
Edwards; it was if the property were sold they just wanted to make sure the hours would be reasonable. Other than
this use, the intent is to use it from 8:00 a.m. to 7:00 p.m. with no Sunday hours. She understands it is odd wording.
The problem is there was one neighbor and with long-standing neighbors, they want to agree, but as Mr. Vafier
explained to the neighbor, this is an ordinance that has to be able to be enforced and so that language was a
compromise between her client and the neighbor in order to allow Ms. Edwards to use her beauty salon. She further
confirmed that the fence that encloses the corral will be removed.
Chair Olson-Boseman announced that no one signed up to speak in favor or in opposition to the request
and closed the public hearing.
Hearing no further discussion, Chairman Olson-Boseman asked for the Board’s direction on the request.
Motion: Commissioner Barfield MOVED, SECONDED by Commissioner Zapple to approve the proposed rezoning of
the subject property to a (CZD) O&I district as the Board finds it to be consistent with the purposes and intent of the
Comprehensive Plan because it provides for the zoning designation and uses outlined for Community Mixed Use
areas, and the proposal provides for a transition between existing lower intensity residential neighborhoods and
highly traveled roads. The Board also finds approval of the rezoning request is reasonable and in the public interest
because it would allow for office and service uses in line with the vision for this area and would be compatible with
the nearby commercial and retail operations and includes the following five conditions:
1.The property shall not be used for a tattoo parlor, shoe or clothing repair, or a drop off laundry, or a
stand-alone nail parlor.
2.The hours of operation for all businesses, other than the applicant’s beauty salon use, shall be from
8:00 a.m. to 7:00 p.m. with no Sunday hours.
3.There shall be no amplified outdoor music or outdoor events on the property other than by or ancillary
to the applicant’s beauty salon use.
4.There shall be only one business permitted on the property.
5.For so long as the properties adjacent to Forest Lane are zoned residential, the property shall be subject
to New Hanover County noise ordinance provisions, for residentially zoned properties.
Upon vote, the MOTION CARRIED UNANIMOUSLY.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 625
A copy of AN ORDINANCE OF THE COUNTY OF NEW HANOVER AMENDING THE ZONING MAP OF AREA 9A
OF NEW HANOVER COUNTY, NORTH CAROLINA, ADOPTED JULY 1, 1972, is hereby incorporated as part of the
minutes and is contained in Zoning Book II, Section 9A, Page 58.
APPOINTMENT OF VOTING DELEGATE TO THE 2020 NORTH CAROLINA ASSOCIATION OF COUNTY
COMMISSIONERS (NCACC) ANNUAL CONFERENCE
th
Chair Olson-Boseman stated that the NCACC 113 Annual Conference will be held virtually on August 5-6
and 14-15, 2020 with the annual business session to be held on August 6, 2020 at 11:00 a.m. Commissioner Barfield
and Commissioner Zapple are registered to participate. A voting delegate must be appointed and submitted to
NCACC by August 3, 2020. During the business session, each county will be entitled to one vote on items that come
before the membership, including election of the NCACC Second Vice President.
Motion: Chair Olson-Boseman MOVED, SECONDED by Vice-Chair Kusek to appoint Commissioner Barfield as the
voting delegate for the 2020 NCACC Annual Conference. Upon vote, the MOTION CARRIED UNANIMOUSLY.
APPOINTMENT OF VOTING DELEGATE TO THE NATIONAL ASSOCIATION OF COUNTY COMMISSIONERS (NACo)
2020 ANNUAL CONFERENCE
Chair Olson-Boseman stated that a voting delegate needs to be appointed for the NACo 2020 Annual
Conference. The NACo Annual Conference business meeting will be held virtually on July 20, 2020 at 2:00 p.m. A
designated voting delegate must be appointed and submitted to NACo by July 17, 2020. Per NACo, any elected or
appointed official or staff member from a county/parish/borough may be a voting delegate. NACo's annual election
of officers and policy adoption will take place during the annual business meeting. Commissioner Barfield and
Commissioner Zapple are registered to participate.
Motion: Vice-Chair Kusek MOVED, SECONDED by Commissioner White to appoint Commissioner Barfield as the
voting delegate for the 2020 NACo Annual Conference. Upon vote, the MOTION CARRIED UNANIMOUSLY.
COMMITTEE APPOINTMENTS
Appointment to the New Hanover County Health and Human Services Board
Chair Olson-Boseman reported that one vacancy exists on the New Hanover County Health and Human
Services Board with one application available for consideration.
Commissioner Barfield nominated Dr. Linda Francis for appointment. Chair Olson-Boseman seconded the
nomination.
Hearing no further nominations, Chair Olson-Boseman asked for a vote on the nominations on the floor.
Vote Results: The Board voted UNANIMOUSLY to appoint Dr. Linda Francis in the Psychiatrist category to the New
Hanover County Health and Human Services Board to serve an unexpired term with the term to expire on July 31,
2023.
Appointments to the New Hanover County Planning Board
Chair Olson-Boseman reported that two vacancies exist on the New Hanover County Planning Board with
one applicant eligible for reappointment and eight additional applications available for consideration.
Chair Olson-Boseman nominated Donna Girardot for reappointment. Vice-Chair Kusek seconded the
nomination.
Commissioner White nominated H. Allen Pope for reappointment. Vice-Chair Kusek seconded the
nomination.
Hearing no further nominations, Chair Olson-Boseman asked for a vote on the nominations on the floor.
Vote Results: The Board voted UNANIMOUSLY to reappoint Donna Girardot and H. Allen Pope to the New Hanover
County Planning Board to serve three-year terms with the terms to expire July 31, 2023.
PUBLIC COMMENT ON NON-AGENDA ITEMS
Chair Olson-Boseman reported that no one signed up to speak on non-agenda items.
ADDITIONAL AGENDA ITEMS OF BUSINESS
There were no additional agenda items of business.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34
REGULAR MEETING, JULY 13, 2020 PAGE 626
ADJOURNMENT
There being no further business, Chair Olson-Boseman adjourned the meeting at 9:17 p.m.
Respectfully submitted,
Kymberleigh G. Crowell
Clerk to the Board
Please note that the above minutes are not a verbatim record of the New Hanover County Board of Commissioners
meeting. The entire proceedings are available for review and checkout at all New Hanover County Libraries and online
at www.nhcgov.com.