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Town gives details of exemption deal
Map shows locations of traded parcels.
Updated 9:45 p.m. Wednesday, June 6, 2007
Town officials say a 2004 agreement that allowed the owner of property off Pine Road to trade land for an exemption from affordable housing requirements was a good deal that helped complete the Southeast Greenway project.
Questions about the exemption arose after it was mentioned during a May 16-17 planning workshop for a 17.125-acre parcel owned by Stough Farms Family Limited Partnership, which is controlled by Davidson resident Lawrence Kimbrough and family.
Charlotte developer Killian Simonini LLC is proposing a neighborhood of up to 38 luxury homes on the property, costing $600,000 to $1 million each.
3-PARCEL SWAP
Town officials said during the first day of the May planning workshop for the 17-acre parcel that Mr. Kimbrough had received an exemption from affordable housing requirements in return for land. This week, the town provided a map of the parcels and a copy of the agreement with Stough Farms Family Limited Partnership, which the town board approved Dec. 14, 2004.
One parcel (“B” on the map) near the
end of South Street, was given to the town in a two-step transaction involving the nearby Pines at Davidson retirement community. It is now crossed by the Southeast Greenway and includes land the town would like to develop as a park at the start of the trail. Another (labeled “A”) is a sliver of land that could provide a new trailhead for the Greenway off Patrick Johnston Lane, between the Cabin Woods and Cabin Creek developments. A third (“C”) is an undevelopable triangle of land near gas transmission lines off Pine Road, next to the proposed new development. (Click on the map for a full-sized image in PDF format)
Mr. Kimbrough originally approached the town about the trade in 2003, as part of a “larger conversation,” Mayor Randy Kincaid recalled Wednesday. “We needed the land, and he needed to satisfy the (affordable housing) requirement. It seemed to me to be a reasonable swap.”
The parcel at the foot of South Street was offered to the town at a time when it was in the final stages of assembling land for the Greenway, town board member Margo Williams said Tuesday.
“Without that piece, I’m convinced we would not have completed the final portion of the Greenway,” she said. “The Greenway is a pretty remarkable accomplishment – that was the balance” (for town board members).
Mayor Kincaid said the swap was an amicable settlement that avoided a potential legal conflict over the property.
Mr. Kimbrough said Wednesday evening that he had been talking to Mayor Kincaid for some time about the property at the foot of South Street. He is a board member of the Pines and said he had “informally committed” to give the property to the retirement community for possible use as part of an expansion. As the Greenway project evolved, it became clear that “The Pines didn’t need but half of it, and we could accommodate the town’s need for a trailhead at the Greenway.”
KIMBROUGH’S OFFER
Around the same time, Mr. Kimbrough said he and his family were considering future development of the 17-acre parcel off Pine Road. The 1-acre triangle at the northern end of that tract would be difficult to include in the development, and Mr. Kimbrough offered that to the town as well.
And finally, Mr. Kimbrough said the town already was in conversation him about acquiring the sliver of land near his home that could be used as part of the Greenway.
Mr. Kimbrough said he knew that other developers had been able to gain exemptions from the affordable housing requirement through cash payments tot he town. He offered to trade the parcels to the town in exchange for an exemption.
Asked why his proposed project should not have to include affordable housing, Mr. Kimbrough said he believes he has satisfied the requirement through the land swap.
“The town is getting a tremendous amount of value,” Mr. Kimbrough said. The family had already sold 120-acres near the end of South Street at a market price to the developer of the Antiquity Cornelius project. “How much would the town have to pay for the two acres at the end of South Street?” he said.
The swap saved the town the cost of acquiring the property at a market price, he said. There was “nothing underhanded” about the transaction. The value of the property justifies the affordable housing exemption, he said.
The town has benefited from the savings on land costs; it also could sell the 1-acre triangle near the gas line, Mr. Kimbrough said. “The town can turn around and use that money where they want to use it, to purchase land or do whatever they want,” he said.
EXEMPTIONS POSSIBLE
The town ordinance requires developers of more than eight units to include affordable housing in their projects. For residential developments in the Village Infill Planning Area, where the 17-acre development is proposed, developers typically would be required to make 12½ percent of the units affordable. In the case of the Pine Road development, that would have meant as many as four or five homes.
But as Mr. Kimbrough knew, exemptions from the ordinance are not unprecedented. In some cases, developers are allowed to buy their way out of the requirement with a payment into the town’s affordable housing trust fund.
In the past couple of years since the Town Board adopted the rules, about $450,000 has been committed to the fund. (Assistant Town Manager Dawn Blobaum was unsure of the fund’s exact balance this week; developers are required to fulfill their commitments in phases, as they complete construction on market-rate units.)
Developers must negotiate any exemptions with town staff. But no such automatic exemption exists in the Village Infill Planning Area, which includes the Pine Road property. So the land swap and exemption had to be approved by the Town Board.
UNUSUAL CASE
Davidson could have bought the land, and entertained a separate request from Mr. Kimbrough to buy his way out of the affordable housing requirement. But two separate transactions “didn’t seem to make any sense — cash in and cash out,” Mayor Kincaid said. “It appeared to me, just back of the envelope calculations, that we were coming out way ahead.”
He said that in agreeing to the exemption, the board made a choice between providing affordable housing and building the Greenway. “The question of weighing competing goals is precisely what government does,” Mayor Kincaid said.
In interviews, conversations and comments posted on this website, some Davidson residents have expressed concern over the land swap. Some who support the town’s affordable housing policies have noted that while the town acquired land needed for the Greenway, it traded away an opportunity to add affordable housing.
Others are developers who must build affordable housing in their developments and worry that they’ll be at a disadvantage marketing their properties.
Mayor Kincaid said he understands why there are questions about the exemption. “Anytime you have such swaps, it is very easy for citizens to second-guess you. What you have to ask is not was it a good deal, but did your elected officials proceed in good faith and was it at least a reasonable deal?” he said.
Ms. Williams, who is president of the Davidson Housing Coalition and an outspoken advocate for affordable housing in town, said the deal was unusual, but worthwhile.
“We looked at the linchpin nature of at last two of these parcels. We were struggling to complete the Greenway. It just seemed an opportunity that seemed in balance worth the trade,” she said.
NOT A PRECEDENT
Asked whether other developers might benefit from similar negotiations with the town, Ms. Williams said, “This was an extraordinary circumstance.”
Mayor Kincaid said other developers would be free to approach the town with similar requests, but unless they were offering land as valuable to the town, or to a current project like the Greenway, as what Mr. Kimbrough offered, “It’s not even going to be close to the same.”
Rodney Graham, a developer who lives in the New Neighborhood in Old Davidson off Concord Road, said he supports the town’s affordable housing goals, but also wonders if the deal with Mr. Kimbrough will become a trend.
“When the (town) board takes an action like this, you do set a precedent. And the precedent is that we’ll give it up on affordable housing if we can get something in return,” Mr. Graham said Tuesday. “The town really gave up an opportunity to have housing for firefighters, elementary school teachers, military personnel, whatever.
Mr. Graham’s John Marshall Custom Homes is building a nine-unit project called Davidson Springs, at South and Walnut streets, which will include one affordable home. He said luxury homes in the proposed Pine Road project would have an advantage over those in his and other projects when. “There are a lot of people, when they’re in that price range, they want to be surrounded entirely by houses that are in that price range,” he said.
Mr. Graham also argues that the exemption amounts to a variance from a zoning requirement or a rezoning, which requires public notice and a public hearing. He thinks the town erred not handling it that way.
He worries that the town could end up with affordable housing clustered in one area, while luxury homes dominate elsewhere. “I’m afraid we’re heading down this road (that says) we want to be economically integrated, but Pine Road and Patrick Johnston Lane and Ardrey Circle - they don’t really count.”
But through the town ordinance and agreements with other developers, the town has recognized that affordable housing may not work everywhere. Developers of rural parcels are allowed to make payments in lieu of constructing affordable housing, in part because their projects – far from the town center services and public transportation – may not be suitable for people without cars, Ms. Blobaum said.
The biggest contributor to the affordable housing fund so far has been a project that fits that description: The 58-unit Woodlands at Davidson, which is north of Mayes Road and southwest of Park Place. Its commitments total about $425,000, or most of the $450,000 committed to the fund so far, Ms. Blobaum said.
DOCUMENTS
Minutes of the Dec . 14, 2004, Town Board meeting.
Copy of the agreement between the town and Stough Farms Family Limited Partnership detailing the land swap and exemption, approved by the town board Dec. 14, 2004, (requires Adobe Reader software) CLICK HERE>
MAP of the parcels, (requires Adobe Reader software) CLICK HERE>
Davidson planning ordinance, including the affordable housing requirement (see section 6.3, (requires Adobe Reader software), CLICK HERE>
Free Adobe Reader software is available for download from Adobe.com.
PREVIOUS COVERAGE AND READER COMMENTS
May 17, 2007, DavidsonNews.net, “4 scenarios offered for Pine Rd. parcel”
May 16, 2007, DavidsonNews.net, “Luxury homes planned off Pine Road”
PLEASE COMMENT - Just a reminder, it’s our policy that readers give their full names when commenting. We’ve had trouble with some anonymous comments in the past. Help us keep the conversation at a constructive high level. Thanks for your understanding. — The editor
Filed under: Davidson town board, Planning & Development
“back of the envelope calculation”? — does anyone else think thats a bit lackadaisacal, if not evasive, when adjudicating a zoning variance request?
The key issue to me is that Mr. Kimbrough requested a variance from a zoning ordinance. His property is zoned Village Infill. The ordinance clearly states that for developments of 8 or more lots, the developer must provide affordable housing units (12 1/2%). THERE IS NO EXEMPTION OR PAYMENT IN LIEU OF OPTION IN THE ORDINANCE FOR VILLAGE INFILL. What is very clear in the Town’s zoning ordinance is that if a private citizen requests a variance, then the Board of Adjustment must be convened and a public hearing held. The petitioner must show hardship not of their own making.
The argument that the Greenway could not have been completed without this deal is very suspect. The Town and the County have the power of eminent domain. The parcel at the end of South Street lies in a floodplain and is next to the former sewage pump station. A real attractive piece of property. I would guess that Mr. Kimbrough made more money from the tax deduction of donating this property to the non-profit Pines At Davidson than it is actually worth. The other two parcels donated to the Town are equally worthless. It will be interesting to see what the Town does with these very valuable pieces of property. Well, I forgot that one of them well enable a connector to the greenway from the high-end Cabin Creek neighborhood.
More later.
Rural areas are exempt because people who qualify for affordable housing don’t have cars? But isn’t affordable housing meant for firefighters, elementary school teachers, etc.? Will the Town end up with affordable housing clustered in one area? No, really? Isn’t it already? Reality check … tenants at The Bungalows (our Award winning DHC development) currently receive Section 8 Housing Vouchers. Is the Town Board confusing the issue of affordable housing with low-income housing? No, really? I was at a meeting years ago where just general information about the affordable housing ordinance was being given and comparisons to what others were doing and I simply asked if Beverly Hills, CA had an “affordable housing” ordinance. The room got real quiet … no, really? If Davidson does not want affordable housing, then they don’t need to have affordable housing. Trying to prentend like the Town “cares” about providing affordable housing is a waste of time … I don’t think Beverly Hills (or a thousand other towns) is worried about its image.
Excellent article and comments. One thing I see missing: What are the actual values of the land donations by the developers? As Rodney says, all three pieces appear to be unbuildable, so why no mention of the cash appraisals?
The greenway is a thin ribbon of connecting sidewalk that is a multi-million dollar asset, to any neighborhood. It’s paid for by tax payers. So to say you’re trading land for a sidewalk is like saying you’re also donating land for sewer and water lines. In this sense, the traded land has little cash value.
Did the town do due diligence calculating the cost of this transaction? 38 homes averaging $750,000 each is $28,500,000.00 12.5% of that is $3.562,500.00. Less the cost of building the affordable homes (50%?), is the land worth that much? Did the Town make a responsible deal?
I think a little more sun needs to shine on the financial basis of this transaction. Otherwise it could suggest mis-management or cronyism.
Finally, is the intent of the affordable housing initiative to build clusters of cheap housing, by extracting money from developers, or is it to create a truly diverse community that avoids Charlotte’s Balkanization of neighborhoods and gated communities?
Despite earlier pokes at Rodney Graham’s development on Walnut St., he has the right idea– building affordable residences shoulder to shoulder with pricier ones. My South/Walnut St. area has a huge differential in home prices. But the neighborhood works well, and could be a lesson to developers concerned that economic diversity will hurt their bottom line.
It will be a shame on the efforts of the many who worked so hard on Davidson’s idealistic Land Plan through the 1990s to see it nibbled away by those who favor the exclusive, mono-cultural neighborhoods that dominate the rest of the Charlotte region. Is Davidson’s future simply be absorbed by the Carolinas’ relentless suburban sprawl through timidity and easy buyouts?
Good sleuthing, David, and excellent comments so far. Many thanks. A few points come to mind:
1. No signatures or dates on the land swap agreements? Odd, if not illegal. Makes one wonder . . . Could we all get away with this kind of sloppiness with our own personal financial matters? I think not.
2. Mary is right. The town’s priorities are not really what they claim to be. Power and money override community values. Moneyed suburban monoculture is no way to serve the public good.
3. Kimbrough & Co., Stough Farms, etc. seem to be silent on all this. Where is the dialogue? Where is civic involvement? Where is the evidence that the community–and not the bottom line–is a priority for the town and the developer?
4. It seems quite obvious that favoritism, cronyism, and perhaps even illegal actions have taken place here (exemptions in Village Infill). The Kimbrough Exemption does not appear to have been exectuted according to the rules, or — from what citizens know now– within the law. The Town and Stough Family Farms need to show properly signed and dated contracts and agreements in order to show citizens of Davidson that they were operating within the law. Anything less contributes to a crisis of confidence in the Mayor, the Town Board, the staff, and the private developers with whom the Town is cutting deals under the table.
5. Even if the land swap turns out to have been legal, many will still wonder what the board members were thinking when they approved this agreement, which seems only to benefit the highest of the high-end in this town.
I don’ t know how these people sleep at night.
Scott Denham
Thanks to David and Rodney for taking the time to invesitgate this story. To town officials, you can do better than this.
Ken Menkhaus
To Bob’s comment regarding the valuation of the land, there is a formula contained within the town’s own zoning ordinance to determine how much payment needs to be made in lieu of providing affordable housing units. But, like every other aspect of this deal, the town eschewed their own ordinances in favor of what the Mayor termed a “back of the envelope” calculation. When the correct formula was applied to The Woodlands of Davidson, a development similar in size and house value to Kimbrough’s, the result was a “payment in lieu of” of over $60,000 per each affordable unit. Clearly the back of the envelope calculation resulted in a much more favorable outcome for Mr. Kimbrough. Furthermore, the payment in lieu of calculation is supposed to be made after the subdivision has been approved, at the final plat stage. Mr. Kimbrough received his exemption prior to even submitting a subdivision plan through the public process of master plan review. And, as I’ve stated before, the payment in lieu of option - per the town’s ordinances - was not a legal option in the case of Mr. Kimbrough’s development.
To Bob’s comment regarding our development on Walnut Street, we are simply following the law. It is a good law, but like any other needs to be enforced or it will lose its effectiveness. I do believe that pricier housing can co-exist just fine with affordable housing. If you build a nice house, they will come. And, if you build exclusively high-end housing, you are more likely to get the “mono-culture” you have warned against. The gate is a symbol of what I consider to be many luxury communities’ desire to isolate themselves from other economic classes. We don’t need that in Davidson.
“Sweetheart Deal: The Kimbrough Exemption Scandal”
by William E. Jackson, Jr.
No single event so clearly shows what is wrong at Davidson’s Town Hall than the recent revelations about the proposed 17-acre “Kimbrough development” off Pine Road.
Aside from the usual we-know-best arrogance, there has been secrecy by elected Town Board members when negotiating a deal with Lawrence Kimbrough, under the rubric of open government; there have been facile explanations of contradictions in public policy not worthy of Commissioner Margo Williams; there is evidence of staff incompetence in keeping records; there are conflicts of interest so blatant—especially on the part of Mayor Pro Tem John Woods–that they would not be tolerated in Washington, not even in Raleigh. And, most disappointing, there is “back-of-the-envelope” sophistry by Mayor Randall Kincaid. And they are all covering each other’s backsides.
According to the minutes of the Dec . 14, 2004, Davidson Town Board meeting:
Present were Mayor Randy Kincaid, Commissioners Margo Williams, John Woods, Bruce McMillen, and Garfield Carr, Town Manager Leamon Brice, Assistant Manager Dawn Blobaum, Town Attorney Rick Kline, Planning Director Kris Krider… and Public Information Officer Sara Levine. Consideration of approving a property swap was added to the agenda as new business. Town Attorney Richard Kline reviewed an Agreement with Stough Farms Family Limited Partnership for swapping property. After a brief discussion, Commissioner John Woods moved to approve the attached Agreement. The motion carried unanimously.
Lawrence Kimbrough had originally approached the town about the trade of land in 2003, as part of a “larger conversation,” Mayor Kincaid recently recalled–as quoted on this website. “We needed the land, and he needed to satisfy the (affordable housing) requirement. It seemed to me to be a reasonable swap. … The question of weighing competing goals is precisely what government does,” he said.
Even when it violates the law? Did not the exemption amount to a variance from a law, which would have required public notice and a potentially embarrassing public hearing?
Every new revelation casts suspicion that the reasons given for the 17-acre sweetheart deal the Town struck with citizen-developer Kimbrough—who must have known that they were creating a special exemption just for him—have been “doctored” post-facto; and that the process of decisionmaking, including the paperwork, suggests post-dating if not sheer fabrication. The timing sequences are off, moreover. Who has actually seen the ORIGINAL agreement (not a copy), signed and dated in real-time, December 2004?
Before this government-by-the-few, for-the-few deal goes any further, the public should be informed as to which financial institutions are loaning the money for the Killian Simonini LLC’s proposed neighborhood of up to 38 luxury homes. After all, it was banker Woods—formerly of First Charter Bank but now with another firm–who introduced in a regular Town Board meeting, as an unscheduled item of business, a brief motion of approval for a “property swap” of questionable value.
Town Board members almost never recuse themselves when voting on issues that pose potential conflicts of interest. The Town lawyer usually advises them that it is not necessary to recuse. And he has often raised the specter of the Town having to go up against developers’ lawyers in court who are prepared to invoke the “scarecrow” that their property rights are being unfairly impacted! This situation encourages “amicable” agreements with the Town.
Hardly a month goes by, incidentally, in which the Town Board writes an ordinance, or the Town staff issues a regulation, that does not impinge on private property rights in some way. Yet, the Town attorney often mentions the nebulous idea of “property rights” in making rulings that assist developers and avoid “legal conflicts.”
As for Town government staff–is it led by Leamon Brice or Kris Krider?–they would do well to keep in mind that they are public servants and NOT agents for private interests. All too often the official town planners become surrogates/advocates for the private developers whose projects they are shepherding through the approval process. It is a close—not crony–relationship that frequently undermines the ethics of good government; and it is very similar to military procurement officers becoming too comfortable with defense contractors producing weapons for their services.
Vide Lauren Blackburn: “Normally that would be a requirement, but an agreement has existed between the owner and the town for a number of years that would exempt him from the requirement,” regarding a most unique exemption from the affordable housing requirement.
Such a casual approach to issues involving the greater public good is made easier by the naïve attitudes of some local residents. It is not unusual to hear statements like these: “I have known ___ for a long time, and I am certain that he (she) has the best interests of the Town at heart.” And “Isn’t there some way to discuss these matters without getting personal by pointing out conflicts of interest?” Or “After all, we are in the same church.” But some Town Board members have close personal relationships with one or another commercial developer.
Retiring Commissioner Bruce McMillen hit the nail on the head when he lamented that citizens care most about their own neighborhoods—NIMBYs–and don’t often see issues in a town-wide context. “We are still too neighborhood-centric. Town Board meetings are sparsely attended. People only show up when something is being discussed that directly affects them or their immediate neighborhood.”
The resident/voters of the Town of Davidson, following the explosion of commercial development at Exit 30, and the high-handedness that has crept into Town decisions, have themselves to blame if they do not throw the rascals out and elect fresh talent to the Board and the Mayor’s office.
In the meantime, it would seem obvious that Kimbrough and developer Killian/Simonini are pressing to get the master plan for their million-dollar-ballpark mansion scheme past the current Town Board incumbents before some, if not all, of them leave office in 2007. They must be stopped.
There should be no redemption for the Kimbrough exemption.
William E. Jackson, Jr.
166 S. Downing St.
[...] trade land in exchange for exempting the property from the affordable housing requirement. (See “Town gives details of exemption deal,” June [...]
[...] thinks the town has “undermined” its efforts for affordable housing by such moves as issuing an exemption to the affordable housing requirement to the Kimbrough family for property they own off Pine [...]