News: CJ Exclusives

Secrecy Surrounded Moratorium Plans

Business and political leaders say no mention made before election

Editor’s note” This is the third installment in a series investigating the spread of “smart growth” regulations across North Carolina and other states. Pushed by environmentalists, smart growth abrogates the rights of property owners and diminishes individual liberty, critics say.

SYLVA, N.C. – Secrecy surrounded plans for enactment of a moratorium on development in Jackson County before the measure was hastily put into effect in early February, county commissioners and business executives say.

“The moratorium came up as a surprise to everyone except a few of the commissioners,” said Chairman Brian McMahan, the only commissioner who voted against the measure. “Commissioner [Tom] Massie was one of the individuals. And we discussed it briefly and we added it to the agenda that night [Feb. 5]. I had not even seen a copy of it.”

The moratorium, which went into effect the next day, has drained millions of dollars from the county’s economy, McMahan and local businessmen said.

Critics have said the commissioners who voted for the moratorium, and who were led by Massie, did not mention the issue before the election in November.

When asked by CJ whether those commissioners avoided discussion of a moratorium, Massie said, “Now, only a moron stands up and says what his direct strategy is going to be. But we can…learn from some of our neighbors and past history. So, no we did not stand up and say, ‘Elect us and we’ll have a moratorium.’

“No. 1, that heightens people’s fears unnecessarily because that may not have been the case … But we did tell people, I told them specifically, I told them at every public gathering I went to and spoke…that we were going to look at some land-use regulations of a reasonable nature to deal with subdivisions, environmental protection, and safety issues.”

Bankers, lawyers, developers and others associated with the construction industry said the moratorium hit like an ambush, cost them tens of millions of dollars, and jeopardized their businesses and their employees’ livelihoods.

Roger Plemens, president of Macon Bank, said that the bank supports “planned growth,” but that the moratorium came as a surprise. “It was. It was. I know of one particular developer who owned several hundred acres and he had gone far enough that he had Phase I already platted that he could continue to sell lots, but it left his other properties in limbo in how to plan hiring surveyors and engineers and those kind of things.”

Plemens estimated that because of the moratorium the bank has about $20 million worth of loans whose outcomes are questionable.

“We made the loans, with the way we’re going to get paid back with the development of the property. Now it’s kind of put us at a loss of not knowing how quickly they can develop it, how many lots they can get with the slopes, and the widths of the roads, and those kinds of things,” he said.

“I had some folks who were looking to borrow money and they were not aware of the moratorium. They were buying 100 acres in Jackson County. And I said, ‘You might want to do some more investigation before you buy this property, because they were planning on developing it. They backed off of buying the property,” Plemens said.

Joel Rice, owner of an excavating company in Cashiers, said his business has lost a total of about $750,000 because of the moratorium. “We’re about half what we were this time last year in gross sales,” he said.

“All of this started when the news came out. Everybody was scared of the unknown and they put a hold on everything,” Rice said. “I lost a $300,000 job the day after they had that first meeting that night and I had been working on that about six weeks and had all the leg work done on it. When it came out the first day, the guy just backed away from the deal. He said, ‘too much unknown, I’m not going to do it.”

So far, Rice said, he has been lucky that he hasn’t had to lay off any employees because his business and others in the county had enough work under contract before the moratorium was enacted. But after being in business for about 12 or 13 years, he said, “If the moratorium stays in place, and I don’t pick up something new, I would say within 30 to 40 days there will be six or eight layoffs, at least.”

“I was kind of blind-sided,” he said. “I had worked 12 years and I could kind of see the end of the tunnel for a future, and then they just kind of jerked the rug out. I’ve got nine TrackHoes, and I’ve worked my butt off, and I’ve got them three-quarters paid for, if I owe on five of them.

“What happens if you can’t work and finish paying another $25,000 after you’ve already paid $100,000 on each one? Are you going to lose that on each machine?”

“Jay” Pavey, a lawyer in Sylva, reports that the number of real-estate closings done by his firm has decreased significantly. “We did approximately 50 closings in our firm in March, and we’re down probably 15 to 20 closings a month now. And this is normally our busiest time of the year.”

“I’ve talked with a client of mine who said, ‘I employ 15 people, and I’ve had to lay off eight of them.’ I’ve talked to a number of people and they’ve all told me, ‘I’ve laid off people. We don’t have work,” Pavey said.

“I’ve gotten phone calls from people asking, ‘Is there any work available?’ In the first time in anyone’s memory, they’re trying to find work. It has just come to a screeching halt,” he said.

Marty Jones, former president of the Highlands-Cashier Board of Realtors, rejects claims by some county officials and the Chamber of Commerce that the moratorium has not hurt the local economy. So far, the unemployment rate in the county has remained fairly steady.

“That’s just a bunch of bull,” Jones said. The real crunch is just beginning to hit.

“In South Jackson we’re off about 25 percent in the number of units, and we’re off about 15 percent in the median price of the land. It’s driven people to existing, rather than vacant (housing),” he said.

“The median price of vacant land is $115,000, and last year it was $149,000 per transaction [developable lots, tracts, and lots of record],” Jones said. “It would be difficult to calculate the hundreds of thousands of dollars of loss.”

No Realtors have gone out of business yet, he said, but, “It’s definitely hurting…I do know of developers who are in dire straits. There are a lot of them,” he said.

The moratorium, and the damage it has caused, wasn’t necessary, McMahan said.

“When I weigh all the things that were there on the table and I look on the impact that it could have on people’s livelihood, and … a lot of people — most people, I would say — live from paycheck to paycheck,” he said. “If they don’t get paid this week, then their payments don’t get made. They don’t have money to buy food, to eat groceries that week. They don’t have anything.

“And a lot of these young guys have gone out and borrowed everything they could borrow in their names, trying to build a business and we would have ruined it. And when I weigh that against whether we’re going to be able to stop one more house from being built, it wasn’t worth it.”

The four commissioners who voted for the moratorium were Massie, William Shelton, Joe Cowan, and Mark Jones. They also instructed the Planning Board and the Planning Department, directed by Linda Cable, to draw up proposed steep-slope and subdivision ordinances.

McMahan, in opposing the other commissioners, said he has been left in the dark about their plans. He and many others said that the commissioners, as candidates in the election, did not mention a moratorium. Also, he said, the other commissioners were evasive about their plans for directing growth in the county.

“I have always campaigned, in the two elections I have been in, on no zoning. The issue of zoning is probably one of the hottest topics that you’ll answer during the campaign. It’s the question that’s on everybody’s mind — especially a county that has no zoning.

“That question was put up to all the candidates. All the candidates said, ‘Oh no, we’re not in favor of countywide zoning. We’re in favor of land-use planning.”

Massie, however, defended the other commissioners’ actions and said it’s not true that as candidates they misled the electorate about the possibility of introducing land-use ordinances. “I did campaign on land-use regulations as did at least one of the other commissioners and probably two of them about the fact it was time to do something,” he said.

“The movement for the moratorium simply comes about because of the growth in Jackson County here for the last several years, principally in the last 15 years,” Massie said. “We think the growth rate’s been extraordinary…and many of the other commissions in this region are experiencing the same types of growth, particularly in the influx of second homes and seasonal residences…and we can see a real explosion in the near future as more and more people retire, and this is where they want to retire to.”

Although some people oppose regulations, he said, the majority of residents want “reasonable” regulations enacted. “Now, what’s the definition of ‘reasonable?’ We don’t know exactly what that is. We do know, for a fact, that there’s been an unwillingness – Jackson County’s had no subdivision regulations at all – that’s the reason we had the moratorium.

“But there’s been an unwillingness of the industry to regulate itself and establish any kind of minimum standards whatsoever. Consequently, in my opinion, that’s where good government steps in and provides some kind of minimum standards so that there are some regulations out there both from a public safety standpoint and also from the standpoint of consumer protection.”

Disasters in the mountainous region also motivated Jackson County commissioners to consider the ordinances, Massie said. He cited “numerous situations” in Haywood, Macon, Swain, and Jackson counties in which landsides killed people and destroyed homes.

However, neither Plemens nor Pavey could recall any fatal disasters in Jackson County. “There have been a couple of instances, in Haywood County, I think…but I don’t see that problem as being huge” in Jackson County, Plemen said.

Before the bank makes loans, he said, it already takes steps to protect its investments. “That’s what we have to look out for. We definitely have to take a hard look at property on steep slope.” Insurance companies, real-estate firms, and developers generally do likewise.

The commissioners’ next step in the process will be work sessions, where they will study the proposed ordinances submitted by the planning director. Another public hearing is scheduled for July 19.

If all goes well, Massie said, the moratorium could be canceled July 20.

“The moratorium is set to expire Aug. 8. It’s only a five-month moratorium,” he said. “We have the next public hearing scheduled on the modified ordinances on the 19th of July. We could adopt them that night…and remove the moratorium the next day if public sentiment is in favor of whatever draft the commissioners put out there in front of them. If they don’t, we’ll probably hold it until our first meeting in August, which will be Aug. 6, and make some more changes.”

According to Pavey, however, and others, the public’s sentiment is one of surrender, for now:

“I think a lot of people have given up. A lot of people have said, ‘OK, there’s nothing I can say, or nothing I can do is going to change the minds of these commissioners. They’ve made their minds up, and we’re just waiting on the next election.”

Richard Wagner is editor of Carolina Journal.