374 N.C. 133
N.C.2020Background
- PHG Asheville sought a conditional use permit to build an eight‑story, 185‑room hotel with a 200‑space parking structure in downtown Asheville; project required Level III review and proceeded to City Council after technical bodies recommended approval with some variances.
- PHG presented expert testimony and reports: Tommy Crozier (appraiser) opined the hotel would not diminish — and likely would increase — adjacent property values; Kevin Dean (traffic engineer) concluded the hotel would cause only minimal traffic delay using industry trip‑generation methods and peak weekday counts.
- City Council members and one public witness raised traffic/safety concerns (including a ‘‘blind hill’’ at the garage entrance) and questioned the sufficiency of Crozier’s comparables and Dean’s choice of a single weekday in November for counts; Council voted unanimously to deny the permit and issued 44 findings explaining why the experts’ evidence was inadequate.
- PHG sought judicial review under N.C.G.S. § 160A‑393; the superior court (de novo as to sufficiency) reversed and ordered issuance of the permit; the Court of Appeals affirmed; the Supreme Court granted discretionary review and affirmed the Court of Appeals.
- The Supreme Court held PHG had produced competent, material, and substantial evidence satisfying the ordinance standards; because there was no competent, material, and substantial contrary evidence in the record, the City lacked authority to deny the permit. Justice Earls (joined by Hudson) dissented, arguing whole‑record review should apply and the Council’s denial was not arbitrary or capricious.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did PHG produce competent, material, and substantial evidence to establish a prima facie case under the CUP standards (property value, traffic, safety)? | PHG: experts’ reports/testimony satisfied the low burden of production for each ordinance criterion. | City: experts’ methods/data were inadequate (no relevant comparables, limited traffic counts, no sight‑distance check); evidence failed to prove safety/traffic standards. | Held: PHG met its burden; experts’ uncontested competent evidence sufficed and no competent contrary evidence existed. |
| What standard governs judicial review of whether an applicant met the prima facie burden — de novo or whole‑record? | PHG: the sufficiency question is a legal one (burden of production) and is reviewed de novo. | City: Mann Media and ordinance wording require whole‑record review and permit denial was permissible based on Council’s factual findings. | Held: Supreme Court applies de novo review to the initial sufficiency/prima facie question; trial court properly separated de novo review on sufficiency from whole‑record review on other issues. |
| Are the City Council’s factual findings (rejecting experts) supported by competent, material, substantial evidence? | PHG: Council relied on inadmissible/lay anecdotes and improperly demanded evidence not required by ordinance; findings lacked competent support. | City: findings are supported by record concerns and local knowledge about seasonal peaks, parking shortages, and sight‑distance hazards. | Held: Council’s findings did not rest on competent, material, substantial contrary evidence; many critiques imposed an unlawful evidentiary burden beyond the ordinance. |
| Can a city rely on members’ special local knowledge or public anecdote to rebut expert evidence and deny a CUP? | PHG: local knowledge must be put on the record at hearing and be competent; lay anecdote about traffic is incompetent under statute. | City: members may rely on local knowledge and observations to inform decisions (citing Humble Oil). | Held: local knowledge may be considered only if revealed in the hearing and competent; the Council here relied on inadmissible or unsupported assertions and could not override uncontested expert evidence. |
Key Cases Cited
- Mann Media, Inc. v. Randolph Cty. Planning Bd., 356 N.C. 1 (2002) (discusses standards of review and when whole‑record review applies in CUP denials)
- Humble Oil & Refining Co. v. Bd. of Aldermen, 284 N.C. 458 (1974) (explains two‑step CUP decision process and applicant’s prima facie entitlement upon meeting burden of production)
- Woodhouse v. Bd. of Comm’rs, 299 N.C. 211 (1980) (clarifies that denial must rest on ordinance criteria and not extraneous grounds)
- Coastal Ready‑Mix Concrete Co. v. Bd. of Comm’rs, 299 N.C. 620 (1980) (identifies superior court’s appellate‑role duties in reviewing local board decisions)
- Styers v. Phillips, 277 N.C. 460 (1971) (establishes that sufficiency of evidence is a question of law)
- ACT‑UP Triangle v. Comm’n for Health Servs., 345 N.C. 699 (1997) (explains distinction between de novo and whole‑record review and when each applies)