(Photo: Rendering by McMillan Pazdan Smi)
ASHEVILLE – The city is asking the second-highest court in North Carolina to stop the construction of an 8-story downtown Embassy Suites, but the hotel’s developers say they have a right to proceed and might even do so while the N.C. Court of Appeals considers the case.
That comes after recent discussions between the Parks Hospitality Group and the city failed to reach a settlement despite offers of public parking and money for affordable housing.
PHG President Shaunak Patel said Monday that his Raleigh-based company might move forward on parts of construction of the estimated $24 million hotel, including pouring footers and utilities at the Haywood Street site.
The company might do so even after a Nov. 29 notice of appeal by City Attorney Robin Currin. City officials want the appeals court to overturn a Superior Court judge’s ruling saying PHG has a right to build the hotel.
“We understand what the risk is,” Patel said. “We could start construction and the state appeals court could say we want to overturn the judge’s ruling.”
That would mean construction would have to stop and anything new removed.
But it might be worth the risk in order to keep momentum on the project that could see a delay of nearly two years, Patel said. He added that the company felt “pretty good” about their chances in the appeal.
The city, meanwhile, is asking the court for a stay on construction.
PHG is the same company that built the $14 million Hyatt Place in March at the corner of Montford Avenue and Haywood.
Two years before building that hotel the group bought the former Buncombe County sheriff’s office across Haywood. Addresses for the former law enforcement building have been given as 192 Haywood and 202 Haywood. PHG made plans to build a 185-room Embassy Suites with extensive conference facilities, a rooftop bar, pool and 200-space parking garage.
But the council voted 7-0 on Jan. 24 to deny the conditional use permit needed for construction. The move came amid growing dissatisfaction by many residents over the fast-growing hotel and tourism industry. In dealing with some other hotel developers, the council had asked for help with affordable housing or guaranteed living wages in return for permits.
PHG appealed the decision and Superior Court Judge William H. Coward found in favor of the developers and on Nov. 2 ordered the city to issue the conditional use permit. Coward said the council has made an “arbitrary and capricious” decision. The council was using a strict quasi-judicial permit process that has since been phased out.
At the end of November, the city attorney gave notice the council would appeal.
Shortly after, the council and PHG began discussions about a settlement.
Patel said the council asked for 60 public parking spaces, which the PHG president said would cost his company $1 million, plus $250,000 for Asheville’s housing trust fund.
He said PHG agreed to the spaces but offered $200,000.
Currin, though, said the two parties were never that close to a non-court resolution.
“What it came down to is a majority of the City Council did not want to settle the litigation,” the city attorney said.
PHG applied Jan. 16 for a demolition permit for the former sheriff’s office. That permit is pending review by city staff and approval by the WNC Regional Air Quality.
Patel, though, anticipates getting the permit and said demolition will start in 30-45 days “and we expect to pour footings in August.”
On Wednesday, a day after the demolition application, the city filed a motion in Superior Court asking for a stay on Coward’s November order. That would mean the city could delay giving the conditional use permit until a Court of Appeals decision.
That could take until the November of this year. Patel said the past and anticipated delay will cost millions in lost tax revenue and in construction costs to PHG. The company will lose $4 million in construction costs over the two years, he said.
Currin said the stay was needed because if the city granted the permit, the appeal could be considered moot by the court. Or if the city wins, any construction would be considered a zoning violation and the developer would have to remove it.
If the developer doesn’t “this burden will be bourne by the city and its taxpayers,” the city attorney said in the Wednesday motion for a stay.