Town rezoned land for employment space; bank wants more houses

by Katie Orlando

DAVIDSON – CommunityONE Bank is suing the Town of Davidson, challenging the board’s Sept. 13 decision to rezone the Davidson East Property, which the bank owns.

In a lawsuit filed Tuesday, Nov. 2, the bank claims the town’s decision has harmed its ability to develop the property.

Asheboro-based CommunityONE, represented by Roy H. Michaux of K&L Gates, is challenging the validity of the board’s decision to rezone the property. That decision only allows the bank to build 12 homes on the 179-acre property along Davidson-Concord Road and focuses heavily on light industrial and office space, according to the suit. Town Manager Leamon Brice said the zoning could allow for any number of houses.

The bank claims the new zoning is incompatible with the original development agreement and master plan and makes the Davidson East property unmarketable, according to the suit.

Planning Manager Lauren Blackburn declined to comment on the case.

Background

Former owner Frank Jacobus had secured the zoning he needed to build a 480-unit subdivision on the Davidson East Property. He bought the 179 acres stretching from the intersection of N.C. 73 and Ramah Church Road east to McAuley Road with a $6 million loan from CommunityONE. The bank foreclosed on the property in late 2009.

A master plan for this property, adopted in 2006, and a development agreement signed in 2007 allocates 136 acres of the property for single- and multi-family houses and about 42 acres for mixed and commercial uses, according to the lawsuit.

In its suit, CommunityONE says it was relying on the master plan and development agreement when the bank loaned Jacobus money to buy the property.

Since taking ownership of the land, the bank has been looking for a developer interested in buying the property.

But at a Jan. 31 planning meeting, town officials announced plans to rezone all but 25 acres of the Davidson East property as an employment campus, focusing on office and light industrial uses, not allowing residential, retail or civic uses, according to the lawsuit.

Town planners brought a proposal to rezone the property for a mixed-use employment center on Feb. 8.

CommunityONE argued the site would not make a good business park and that tipping the balance toward office and light industrial space would make the property unmarketable.

A developer would need to build enough houses, CommunityONE argued at the Sept. 13 town board meeting, to finance infrastructure for an office park. Wetlands and topographical features, the bank said, would make the Davidson East property difficult to develop as a business center.

In response to the town’s proposed rezoning map, CommunityONE called in Norman Walters, a land developer specializing in business and industrial park developments, and land planner Walter Fields. The bank hoped their expert testimony would convince the town that an employment campus would be “neither economically viable nor feasible for the Davidson East Property because of topography and wetland issues peculiar to the site and the projected income from that type of development could not justify the cost of the infrastructure required for such a development,” according to the lawsuit.

The planning board endorsed a plan CommunityONE presented in August, saying it was economically viable.

The decision

In response to the bank’s arguments, town town planners created a new flex campus zoning designation, allowing for multiple uses. The bank argues in the lawsuit that the town offered no evidence that flex campus zoning would allow the property to be economically viable.

At the Sept. 13 meeting, after seven months of discussion, Mayor John Woods said he would not open the meeting to public discussion. He limited discussion to town board members and a vote on the rezoning.

CommunityONE could not present its proposal at the town meeting because they had not given sufficient notice, according to the lawsuit.

The town board approved Blackburn’s proposed plan, ignoring the plan endorsed by the planning board. Commissioners feared the bank would not be committed to developing the employment center after building the homes if more area was zoned for residential use. Commissioner Brian Jenest dissented.

In its suit, CommunityONE says:

• Rezoning the property violates the development agreement signed in 2007 that should last 20 years.

• The town violated notice requirements and denied the bank the opportunity to be heard and its rights to due process at the Sept. 13 board meeting.

• The town never contradicted CommunityONE’s evidence that an employment campus was not economically viable for this property or that flex campus zoning would be physically or economically viable.

CommunityONE is asking a judge to overturn the town’s rezoning of the Davidson East property.