MINUTES OF A WORK SESSION HELD BY THE MAYOR AND COUNCIL OF THE

TOWN OF CHAPEL HILL, NORTH CAROLINA, SATURDAY, SEPTEMBER 9, 1995

Mayor Broun called the work session to order at 8:42 a.m.; Council Members in attendance were Joyce Brown, Joe Capowski, Mark Chilton, Pat Evans, Jim Protzman and Rosemary Waldorf. Council Members Lee Pavao and Barbara Powell were unable to attend. Also in attendance were Carrboro Alderman Jay Bryan, Carrboro Town Manager Bob Morgan, Planning Board Chair Mary Reeb, Planning Board Members Diane Bloom, June Dunnick, Scott Radway and Bruce Runberg, UNC-Chapel Hill Planning Panel Members Flicka Bateman, Nancy Gabriel, Josh Gurlitz, Ted Hoskins, Pearson Stewart, Don Weisenstein, Rachel Willis and Bob Woodruff. Town staff members in attendance were Town Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine Miller, Planning Director Roger Waldon, Current Development Coordinator Jennie Bob Culpepper, Long-Range Planning Coordinator Chris Berndt and Planners Lorie Teikele and Rob Wilson.

Mayor Broun presented a brief overview of the day's proposed activities and briefly introduced Mr. Dwight Merriam.

MR. MERRIAM'S OVERVIEW PRESENTATION

Mr. Merriam noted that the Town had changed a lot since 1972, when he first visited Town to attend the University while pursuing his masters degree at the University. Mr. Merriam stated that he had his own personal biases, such as strongly favoring small commercial aviation airports such as the Horace Williams facility. He also said the downtown area had a very good appearance and seemed to be prospering. Mr. Merriam noted that he represented developers with about two-thirds of his professional time, the balance being split between local governments, neighborhood and environmental groups.

Mr. Merriam said his principal focus today would be to identify regulatory approaches relative to the Horace Williams and Mason Farm tracts and limitations on these regulations. Mr. Merriam said that often times too much emphasis was placed on public regulation in addressing community-wide land planning matters.

Mr. Merriam also suggested that it was:

* Very important to orchestrate techniques

* To begin to focus in on a strategy or set of strategies, respecting the needs of various actors

* To develop a partnership orientation to the problem

Mr. Merriam noted limitations of regulations, including:

* The power of the market place, with developers driven by market forces, rather than a rational planning model

* Regulations are limited by enabling statutes, case law and constitutions. He stated that if existing statutes were ineffective, local governments could seek special authority.

* Condominium declarations and other private property restrictions are very different.

He also cited the following orchestration techniques:

* Combining public and private forces

* The importance of the availability of infrastructure, especially sewer service and roads, in triggering development proposals

* Taxes/investments by local governments

* Zoning and subdivision controls

Mr. Merriam stated that available regulatory tools included:

* Zoning

* Subdivision

* Variances (Legally defensible in only a very few cases)

* Special Uses

* Site Plan Review

* Rezoning

* Planned Unit Developments

* Mixed-use (OI-1 zone): Vertical and horizontal; Land-use intensity ratios tend to be very mechanical and setback and height restrictions are often times geared to worse case developers and developments

* Nonconforming uses such as outdoor skateboard ramps

* Floating zones are in community's development ordinance, and "float" over community, rather than being mapped. The zones provide local governments with broad discretion in legislative judgements.

* Design review (special appearance district) regulations concerning massing and relationship to open space

* Conceptual and final approval of master land-use plan

* Overlay zones (Resource Conservation District) are not tied to underlying zones

* Airspace easements and scenic vista controls: Start with visual aspects

* Impact analysis

* Incentives versus mandates; Problem with incentives: One never knows developer's economics; To make incentive zoning work, give developer several times more than something is really worth

* Performance zoning

* Exactions: Contributions made in-kind for infrastructure such as road improvements

* Transfer of development rights (Density transfers in pocket-type developments

* A new zoning classification (OI-4) for large University properties

* Two or three step process; It will take decades for actual buildout to occur

He stated that other ideas suggested included:

* Density transfer between two land parcels

* Density transfer into land parcels

* Preparation of design manual or standards by developer

* Special tax districts; Stage impact fees over time, possibly through a private association

Mr. Merriam said some other items to be considered were:

* Setting aside greenspace

* Pedestrian & bicycle access; Quite high densities are required for mass transit options

* Greenway system connections

* Water and sewer

* Traffic generation

* Connections to northwest area & high school from the Horace Williams tract

* Commercial & retail needs

* Parking

* Stormwater management

* What to do about non-conforming airport, especially noise and safety concerns; possible reuse if airport facility is closed

* Alternative energy sources: solar and wind; Save resources for future generations; photovaltaic technology is feasible in the near term

* Housing equity & a mix of housing types, regardless of what the marketplace dictates

* Power of iterative (building one on the other) and interactive (outward growth) planning and development

* Sustainable development

* Going from general to specific with consensus along the way

* Wrestling with buzz words such as neotraditional town planning and pedestrian pockets ("New names for old friends")

* Fire, police and emergency medical services

* Watershed versus site by site

* Coordination among local governments

* Changes in the way we will work (Telecommuting, etc.) needs to be directly addressed/confronted

* Environmental impact analysis

* Community impact analysis

* Buffer overlays: minimize adverse offsite impacts

Possible future uses for Horace Williams tract include, but are not limited to: housing, retail, office, research facilities, light industrial and recreational uses. Mr. Merriam stated that the University of Connecticut at Storrs campus would comprise 333 acres, 80 of which were wetlands, 1.2 million square feet of buildings and seventy hotel rooms at ultimate buildout.

The session adjourned at 10:13 a.m. and reconvened at 10:35 a.m.

Questions by Citizens and Board and Panel Members

Julie Andresen inquired what steps could be taken to ensure that special use permits were consistent with master land-use plans, relative to health, safety and welfare protections. Mr. Merriam said the best approach was to start with an anticipated buildout plan of fifty to one hundred years and a set of conceptual development sites, in concert with the development of proposed design guidelines. He also said it was important to commit to a longer-term development with a range of uses, for twenty-five or more years. Ms. Andresen also inquired about vehicles for accommodating future infrastructure capacity needs. Mr. Merriam said it was most desirable to draft a concurrency document concerning on-site and off-site infrastructure. Ms. Andresen inquired about setting development limits through zoning. Stating that there appeared to be a lot of local desire for mass transit, Mr. Merriam said it took very high densities to make mass transit systems viable, financially and in terms of actual routing.

UNC-Chapel Hill Planning Panel Member Bob Woodruff inquired further about managing the process needed for achieving the higher densities necessary for mass transit. Mr. Merriam stated that the community would inevitably encounter a certain amount of traffic congestion in the future. He also stated that infrastructure tended to be "lumpy", with a lot of mass transit capital investment needed to get one passenger from one point to another. Infrastructure investment cannot be made in a smoother steady way over time. He also briefly reviewed the case of Scottsdale, Arizona, a community which issued over 5,000 building permits during the past year and was experiencing serious water-related infrastructure problems.

Transportation Board Member Rachel Willis said she believed that the Town's transit system was doing a fair job of coping with the community's current mass transit demand. She stated that the community had done a remarkable job of building a bus system and fleet to move 13,000-14,000 riders per day. Ms. Willis also said the Triangle Transit Authority was in an evolutionary stage. She also stated that there was not insufficient parking in the University campus area. Mr. Merriam stated that very high densities were needed to support a directed mass transit system. He also said that it took very large amounts of money to build or convert mass transit systems. Ms. Willis said she believed that the community was coping very well with interim transit demands.

Planning Board Member Scott Radway said it was unwise to depend solely on new development to fund mass transit systems. Mr. Radway inquired whether it would be wise for the community to use zoning and rezoning authority as a principle means of protecting community interests. He also asked how the Town could require the University to submit planned unit development (PUD) applications. Mr. Merriam said it was not possible to make a developer develop if there was no viable market. He also said that it would be a very good idea for the community to consider the use of development agreements.

Dan Coleman said he did not believe that an OI-3 zone was workable in concert with a floating zone. Mr. Merriam stated that the Town could possibly adopt an interim development ordinance or establish a short-term (6 months to 1 year) residential construction moratorium in order to encourage relatively lower density developments. Stating that the Horace Williams tract currently permitted quite high zoning densities, Mr. Coleman said that trading development rights for higher densities on outlying properties might prove problematic for the Town. Stating that there was no specific proposal for use of the Horace Williams tract, Mr. Merriam stated that transferring density in had been tested and had proven quite successful in other communities. Mr. Merriam also emphasized the importance of saving lands for future generations.

Mr. Coleman inquired whether suggesting that the Town zone to require higher densities near mass transit sites fit well with the rights of developers to develop. Mr. Merriam stated that mandating higher densities had been done elsewhere in concert with buying development rights from developers.

Planning Board Member June Dunnick said it was very important to keep in mind the need to support the statewide community's future education and health needs on the Horace Williams and Mason Farm tracts. Noting the importance of providing open space and recreational facilities, she stated that use of the tracts would not necessarily involve buildings.

Planning Board Member Diane Bloom stated that the success of mass transit systems was somewhat dependent upon the availability of parking at facilities such as the University campus. She inquired about the risk of having unacceptably high densities in the future due to mass transit considerations. Mr. Merriam stated that the interrelationship between campuses would be a very important factor in future modal shifts.

Joal Hall inquired about the meaning of the "doctrine of concurrency" referenced earlier by Mr. Merriam. Stating that the community would like only have water resources from University or Jordan Lakes in the future, Ms. Hall said it was very important to think about future water capacity in the development review process. Mr. Merriam said it was also important to think about the necessary future transit infrastructure. Mr. Merriam stated that the "doctrine of concurrency" referred to the fact that infrastructure should be in place by the time a particular development went "on-line". He also said that two key elements of infrastructure planning were determining who was responsible for paying for particular improvements and development of a phasing plan for installation of infrastructure.

Planning Board Member Scott Radway said it was important to balance having flexibility to change unanticipated items with the need to identify minimum natural and social resource levels. Mr. Radway also noted the importance of measuring impacts within the baseline of the Town's Development Ordinance. Mr. Merriam stated that environmental and resource impacts were relatively easy to deal with and measure. He said that social equity concerns were much more difficult to deal with since this involved the concept of general welfare matters, such as the provision of affordable housing opportunities. Mr. Merriam stated that if sufficient density incentives were provided, it might be possible to negotiate with developers about making contributions for upsizing of infrastructure such as widening of roadways. Planning Board Member Mary Reeb inquired whether Mr. Merriam was suggesting that developers be required to make such improvements. Mr. Merriam said it was very important for major employer/developers to mitigate social equity impacts by providing affordable housing opportunities for their workers.

Mr. Coleman stated that it was not viable for many University employees to find affordable housing close to their workplace. Mr. Merriam said he generally believed that housing should be constructed as close to workplaces as possible. Mr. Coleman said it would be very important to try to balance the Town's specificity in zoning versus more flexible types of zoning versus the establishment of more planning guidelines and principles. Stating that this was a fair statement of the totality of the situation, Mr. Merriam said there were also some tradeoffs to be considered, including: (1) whether the community vision was shared with an individual landowner and (2) the amount of infrastructure a community was willing to stage, over time, to accommodate long-term (25-50 years) buildout of developments.

Bob Woodruff stated that most regulation was reactionary, rather than proactive. Mr. Woodruff inquired about legal methods for eliminating the law of precedence. Mr. Merriam stated that floating zones, such as special development districts, could be used to handle unique situations such as the community's educationally-oriented needs. He also said that specific criteria could be used for land parcels such as the Horace Williams and Mason Farm tracts. Mr. Merriam noted that standards for special development districts could be recorded on land records and become a part of the Town's Zoning Ordinance in the future.

Stating that much of today's discussion had focused on limitations, June Dunnick urged all parties to think more broadly about future planning of the current airport site, rather than just setting limits. Mr. Merriam said he did not believe that anyone was advocating preservation of the airport at the Horace Williams tract. He stated that there would likely be continuing discussions about night operations at the facility.

Carrboro Alderman Jay Bryan inquired about mechanisms for ensuring the development of reliable restrictive covenants. Mr. Merriam said development agreements reviewed by the Town's Attorney were a good vehicle for this purpose.

Dan Coleman asked whether the two properties would be viewed as one or two land parcels. Stating that the two properties had profound physical differences, Mr. Merriam said he was not sure whether it made sense to have use and density tradeoffs between the two parcels. He stated that another possibility was to have subsets of the two land parcels.

The group adjourned for a lunch break at 11:57 a.m. and reconvened at 1:10 p.m.

Mayor Broun opened the floor for questions by Council Members.

Council Member Protzman asked Mr. Merriam to elucidate further on the use of "floating zones" as a tactical planning tool. Mr. Merriam inquired whether planned developments and mixed use were similar to floating zones. Mr. Waldon said there were quite similar, based on certain performance standards and thresholds. Mr. Merriam said it was important to have a sufficiently descriptive term for floating zones. He also stated that floating zones needed to have maximum flexibility and few restrictions. Council Member Protzman said he believed a benefit of this approach would be that it would allow for a broader pallet and larger community vision. Mr. Merriam said this was correct.

Council Member Brown said she believed that the planned development category was little used as a practical matter. Development Coordinator Jennie Bob Culpepper said planned developments, including most special use permits, were used quite frequently. She noted that planned developments currently involved proposals of five acres or more. Council Member Brown inquired how the Town could instigate the use of floating zones if developers generally proposed the use of such vehicles. Mr. Merriam said the technique was a highly flexible one which was dependent upon the instigation of landowners. He stated that the ideal way to proceed would be for the Town to hold preliminary, open dialogue meetings with landowners, advising of the availability of floating zones as a mutually beneficial planning tool.

Council Member Brown said it was especially important for the Town to maintain its values and principles while guiding development activity. Mr. Merriam said there were two ways to do this: to amend the Town's Comprehensive Plan to include more details on these two tracts (Mason Farm and Horace Williams) or to prepare a special development floating zone, referenced in the Comprehensive Plan, locking the landowner into certain basic parameters of the Council's vision.

Council Member Capowski asked whether Mr. Merriam had had the opportunity to visit the UNC Hospitals area during his current visit. Mr. Merriam said he had not done so and had last visited the area about five years ago. Council Member Capowski stated that the character of the University campus generally varied between being very pretty to very urban. He inquired how the Town could require that the Horace Williams tract be developed similarly to the older portions of the University campus. Mr. Merriam cautioned that such an approach might result in the unintended effect of developing areas having an artificial feel. He suggested that a better approach was to provide a general outline or model for the developer to emulate or slightly adapt.

Council Member Brown asked whether Mr. Merriam was suggesting that the Town use master land-use plans or the Town's Comprehensive Plan as a general guideline. Mr. Merriam stated that the Town's Comprehensive Plan could have a detailed element for the Mason Farm and Horace Williams tracts. He also said the Town might consider having a reference in the Town's Development Ordinance referencing a guidebook to the Town's Comprehensive Plan, serving as an educational guideline, rather than mandatory requirements.

Council Member Waldorf said she liked the concept being described by Mr. Merriam. She inquired how the Town could address environmental protections and developer-borne infrastructure costs upfront in the development process. Mr. Merriam stated that it was fairly easy to establish absolutes for environmental guidelines, such as "no net loss of wetlands". He also said that the question of who paid for infrastructure improvements was much more complex, since it was necessary to orchestrate specific financing mechanisms, phased in over time. Mr. Merriam said it was important for the Town to convey to developers that impact fees were good because they allowed tailoring to direct impacts on infrastructure. Mayor Broun noted that payments-in-lieu were a type of impact fee. Council Member Waldorf inquired whether it was possible to have bilateral agreements between governments and developers, rather than development agreements. Mr. Merriam said he preferred the use of developers agreements as a good negotiating tool.

Council Member Brown asked how phasing could be incorporated into development agreements. Noting that such agreements would very likely have to amended over time, Mr. Merriam said it was essential to have necessary infrastructure to protect the public's health and safety. He stated that every time that zoning was amended in concert with a development agreement, it opened the door to potential conflicts. Mayor Broun asked whether special development districts and floating zones were essentially the same concept. Mr. Merriam said this was correct. He suggested that the Town possibly use the term "University Special Development District".

Council Member Evans said special development districts or floating zones could be used in many parts of the Town. She inquired whether floating zones had to be under ownership of one property owner. Mr. Merriam said no, adding that it would be necessary to set limits and constraints in identifying specific boundaries for the proposed floating zone. He noted that special legislative authorization would be needed to establish floating

zones.

Council Member Capowski inquired about the general feasibility of building a flood control lake on the Horace Williams tract. Mr. Merriam said although he could not directly answer this question, he had only seen one or two references to multijurisdictional Stormwater management in the materials he had reviewed for today's workshop. Council Member Capowski inquired whether it was desirable to constrain water on site. Mr. Merriam said he did not think this was the best approach. Mr. Merriam stated that he believed the best approach was drafting a cooperative agreement between a series of detention systems. Mr. Merriam said such an arrangement would be beneficial in getting Stormwater downstream before peaking occurred. Noting that there was a significant amount of undeveloped property in steeper areas of the Horace Williams tract, Council Member Capowski asked whether this was best handled by a contractual arrangement with the University. Noting that local governments were very hesitant to use the power of condemnation, Mr. Merriam said the Town might wish to assess downstream property owners for the possible construction of an expanded detention basin. He also suggested the possibility of giving upstream property owners more development rights if they agreed to build a facility to reduce flows downstream and base flood elevations.

Council Member Evans inquired what Scottsdale, Arizona's leaders saw as advantageous relative to accommodating very rapid growth. Mr. Merriam stated that although a number of factors were involved, a major factor was the powerful political influence of homebuilders in the Phoenix, Arizona area and an overall pro-growth/pro-development orientation.

Council Member Waldorf said three issue important to the properties were ownership, transportation and the complications of buildout. She asked Mr. Merriam to address himself to ownership patterns and how to (apart from bilateral agreements) address development proposals since the State was the property owner of the two tracts. Mr. Merriam said he had nothing significant to add to his earlier remarks. Mr. Merriam also stated that the Town might investigate the possibility of a joint development corporation, in concert with the University sometime in the future.

Council Member Brown requested that Mr. Merriam address the concept of phased infrastructure development. Mr. Merriam stated that phased development was essential to benchmarking estimated completion dates for portions of proposed infrastructure improvements. Council Member Protzman inquired about phasing of the mix of land uses. Mr. Merriam said although this was feasible and had been done elsewhere, it was important not to load project requirements with "economic losers" upfront, such as requiring a very high percentage of residential units. Noting that economic-related development patterns could completely change in the next twenty years, Council Member Evans said it was important to have ways to change requirements. Mr. Merriam said this was correct. He added that it was also important for the Council to have an immutable vision of lasting elements. Council Member Evans noted the possible use of reclaimed water in the future. Mr. Merriam noted that some areas were putting in two separate lines to use reclaimed water.

Noting that some existing HVAC systems, especially in the University campus area were quite noisy, Council Member Brown asked whether or not the Council could specify sizes and other specifications for these systems. Mr. Merriam stated that the Town's Noise Ordinance was the best place to start to address these concerns. He added that many establishments were using groundwater heat pumps, which tended to be quieter than other types of systems. Council Member Brown stated that building design could also effect systems. Mr. Merriam said this point was well-taken. He added that there were currently insufficient economic incentives to encourage the building of very energy-efficient buildings.

Mayor Broun inquired whether other persons had follow-up questions. UNC-Chapel Hill Planning Board Member Josh Gurlitz asked Mr. Merriam to elaborate on items that Town officials needed to be thinking in order to continue positive relations in negotiating future development agreements with the University.

Mr. Merriam said two good starting points were: (1) joint review of site plans by the University and the Town, and (2) the establishment and continued operation of the UNC-Chapel Hill Planning Panel. He added that all stakeholders had to have something at stake and be able to send an end to the review process. Mr. Merriam said although a regulatory strategy could be developed in six months, he thought it was more likely that this step would take twelve to eighteen months to complete.

UNC-Chapel Hill Planning Panel Member Pearson Stewart asked how the Town could incorporate necessary flexibility concerning floating zones for planned developments. Mr. Merriam said a good first step in the near term was to project estimated ranges of square footage for various proposed land uses, subject to renegotiation in the future by both parties. Council Member Protzman asked Mr. Merriam if he believed that the Town should be thinking about investing real capital in visioning of future major development projects. Mr. Merriam said there were many instances where communities had decided to jointly invest in site planning processes for adaptive future reuses. He added that both parties could show signs of good faith throughout the planning process.

Mayor Broun said he believed that the current zoning of the two tracts was too loose and non-restrictive. He added that developing the right kind of land-use controls would be a long process. Mayor Broun asked whether there was anything that the Town should be doing while a new land-use control process was being developed. Mr. Merriam said it was virtually impossible for the landowner to commit to a buildout scenario, given the size of the land parcels involved. He stated that one option was to change underlying zoning for the tracts, limiting future use to minimal development or something close to anticipated development. Mr. Merriam said another possibility was a development moratorium. Mr. Merriam stated that it was his preference to have parties outline what each side would do, such as a pledge by the Town not to rezone and a pledge by the University not to have any irretrievable development plans.

Stating that the University had built only one dormitory and no housing for its employees and faculty during the past twenty-five years, Council Member Capowski inquired whether the Town had authority to require the provision of affordable housing opportunities. Mr. Merriam said he did not know. Council Member Capowski inquired whether the Town should pursue the concept of requiring that land developers provide housing to employees. Mr. Merriam said he could not think of any cases where mandatory inclusionary zoning had been held to be illegal. He added that if the University wished to attract people to fill jobs, it would have to help with the community's housing needs. Mr. Merriam said it would be advantageous for the University to provide such assistance.

Planning Board Member Radway suggested the possibility of lengthening the proposed schedule for rezoning of the tracts, to possibly accommodate floating zones. He stated that some base zoning level was needed for thresholding to occur. Mr. Merriam said although this point was a good one, he thought it might not be necessary. Mr. Merriam stated that it was in the University's best interest not to propose any specific new developments on either of the sites. He inquired how the University felt about thresholds. UNC-Chapel Hill Planning Panel Member/University Associate Vice-Chancellor Bruce Runberg said the University had outlined its good faith intention not to develop on either of the tracts. He stated that the Town had made similar good faith commitments.

Mr. Merriam stated that large landholders could not afford to generate animosity during a land development negotiation process. He noted that there appeared to be a positive cooperation in place at present between Town and University officials. Mr. Runberg said there was generally a positive, cooperative mode between the University and Town. He also expressed hope that trust would continue to build so that there was no need for the University to worry about the premature interest of some parties in rezoning of the two tracts. Mr. Merriam said there would likely be three difficulties with the overall planning process: overall density, the relationship between development and related impacts, and who would pay for offsite infrastructure improvements.

Mr. Merriam expressed thanks for being invited to facilitate today's workshop on planning for the two tracts. Mr. Merriam also said he had learned a great deal today.

The session concluded at 3:15 p.m.