Asheville – It was now time for Asheville City Council to review the hotel development standards adopted in February. The adoption followed an 18-month moratorium on hotels, the proliferation of which was described as concerning by members of the community fearing sufficient hotel harms to participate in surveys and focus groups. The moratorium had been imposed to buy time for city staff to develop a workaround for the North Carolina General Statutes’ prohibitions on banning hotels. The interdiction strategy staff selected was to incentivize hotel developers with bypassing a review from council if they could provide enough community benefits, formerly known as extortions.
Developers would receive points for community benefits as spelled out in a table. Depending on the number of hotel rooms and in what part of town the construction would be, the developer would have to earn between 100 and 220 points. Contributions worthy of points included providing an adaptive reuse of a historic building, earning LEED or Green Globe certifications, or being Net Zero. Developers could also contribute between $3,000/room and $6,000/room to either the city’s Housing Trust Fund or its Reparations Fund, or they could construct or bankroll a certain amount of new, affordable, mortgageable housing, proportional to the number of rooms constructed.
Other means of scoring points include being an Employee Owned Business or B Corp, paying “living wages with inclusive hiring,” or either contracting with a minority- or woman-owned business or giving the city $600/room to support a minority- or woman-owned business. Hotel developers could also provide some form of transportation perqs, give the city $300/room for neighborhood improvements or public art, or construct a plaza or parking facility. Developers would lose points for demolishing a historic structure or displacing business operations or residents.
Planning and Urban Design Director Todd Okolichany said staff felt the new hotel standards were working well. Early on, concerns had been expressed that the community benefits would make hotels more appetizing for council. Regardless, expressed initial goals were to increase predictability and transparency with Asheville’s design review process, determine where new hotels would “be appropriate,” “leverage hotel development to achieve community benefits and limit impacts of new hotels,” and improve hotel aesthetics. To accomplish this, staff first created a hotel overlay district.
They also created a Joint Design Review Committee, a nine-member body that evaluates projects in the central business district and the River Arts District. After the trial period, staff recommended modifying the structure of this committee because it had been difficult to fill some positions. By creating more at-large positions, staff hoped to get more expertise and diversity on the board.
Since the new rules went into effect, the city has reviewed five hotel projects. All hotels were proposed for downtown, and three would be large hotels, or hotels with over 35 rooms. Only one of the hotels, the Four Points Sheraton, was not eligible to participate in the community benefits program because the project was large enough to require review regardless of the building’s use. The other four hotels, however, had the potential to garner $650,000-$800,000 in direct, up-front community benefits.
Councilwoman Kim Roney asked how the developers of these projects chose to contribute to the affordable housing or reparations fund, and Okolichany said staff is trying to get developers to commit early in the process. They also may do a 50/50 split between the funds if they can’t decide. Still, only one developer of the projects in the pipeline had opted to contribute to the affordable housing trust fund. The others remained noncommittal.
Councilwoman Sage Turner had questions about the process for deciding if community benefits should be applied to affordable housing or reparations. While the point of providing community benefits was to avoid a review by city council, there was widespread belief that council should be deciding how to spend these contributions. Turner, however, said she was uncomfortable telling developers how to spend their money.
Okolichany said staff would prefer to process more applications to get more data. Currently, however, the goal would be to start with a preliminary listening meeting with the community in which the form community benefits take would be an item of conversation. Even so, staff sought clarity on how these meetings should proceed. One certainty was that staff would not issue a certificate of occupancy until the developer had paid his community benefits in full.
Councilwoman Gwen Wisler was concerned that persons not leaning strongly toward one fund more than the other could view pressure to decide as a political situation. Mayor Esther Manheimer observed that contributing to the affordable housing trust fund would likely be tax-deductible, whereas seeking points in other categories may not be as rewarding.
Turner was also concerned about what was happening with extended-stay hotels. Okolichany had said a new concept, the condotel, has been cropping up across the country. Condotels are motel rooms with, for example, living rooms and a kitchen. They’re attractive to business travelers and families seeking more space. Both condotels and extended-stay hotels look like short-term rentals by another name to get around the city’s rules for setting up an Airbnb.
Manheimer agreed. She apologized to staff for putting them through a rigorous legal exercise, but asked that they “address that condo-hotel concept … because this is sort of an emergency.” At that, Okolichany agreed to expedite consideration of the matter, and added that his next update should be better-informed through more trial-and-error.