The North Carolina Court of Appeals has overturned a 2001 Asheville annexation, finding that the city improperly categorized tracts of land as in commercial use to support the move.
On March 15, 2000, Asheville declared its intention to annex the Ridgefield area with an effective date of June 30, 2001. A number of businesses affected by the annexation sued, contending the city had not followed state law in the annexation. Specifically, they argued that the area did not meet the statutory requirements to be eligible for annexation.
The North Carolina statue in question was N.C. Gen. Stat. § 160A-48(c)(3):
(c) Part or all of the area to be annexed must be developed for urban purposes at the time of approval of the report provided for in G.S. 160A-47… An area developed for urban purposes is defined as any area that meets any one of the following standards:…
(3) Is so developed that at least 60 percent of the total number of lots and tracts in the area at the time of annexation are used for residential, commercial, industrial, institutional, or governmental purposes.
Asheville contends that 22 of the 34 tracts (69 percent) at the time were used for a qualifying purpose. The businesses disagree, noting that several properties were then being developed or redeveloped and should not have been considered to be in “commercial use.” With those tracts not counted as urban, the area would not have been urbanized enough at the time to qualify for annexation. A superior court judge agreed with the city.
The Court of Appeals rejected the city’s argument and reversed the lower court’s ruling Aug. 5. Citing the 1999 case of Arquilla v. City of Salisbury, the appeals court noted that the proper standard is “the use of property determines whether it may be involuntarily annexed.”(emphesis in original) In Arquilla, the Court of Appeals found that “future plans for use are irrelevant in determining whether a property may be involuntarily annexed. Instead, the proper inquiry is the actual use at the time of annexation.” On March 15, 2000, the properties in question were not yet in commercial use, hence the Court of Appeals’ decision to overturn the annexation.
Judge James Wynn wrote the Court of Appeals’ opinion. Judge Rick Elmore concurred.
Judge Douglas McCullough dissented, however, arguing that the majority had adopted a too narrow definition of “commercial use.” “When a developer hires a construction company to erect shopping centers and/or offices, such would certainly seem to qualify as a ‘commercial’ use of the property,” he said. “The construction company is purchasing building materials and using them to erect the structures by the application of skilled labor in the hopes of making a profit on the transaction. Such activity is ‘commercial’ by its very nature.”
North Carolina law allows for appeals by right to the N.C. Supreme Court from divided rulings of the Court of Appeals, making it likely that the state’s highest court will have the final say in the matter.
The case is Ridgefield Properties, L.L.C. v. City of Asheville, (02-1110).
Lowrey is associate editor at Carolina Journal.