ASHEVILLE - The North Carolina Supreme Court has said City Council was wrong in denying a developer a permit to build a new hotel on the north side of downtown.

The 5-2 ruling by the state's highest court in PHG Asheville LLC v City of Asheville was handed down April 3.

The majority of justices said Superior Court Judge William Coward and the NC Court of Appeals were correct in siding with Raleigh-based Parks Hospitality Group.

PHG complained the council illegally denied them to right to build an Embassy Suites on the site of the former Buncombe County Sheriff's Office on Haywood Street. The council had voted unanimously in January 2017 against the permit following a surge of hotel construction and rising backlash from residents who felt pushed out of downtown and other areas by crowds of tourists.

"After carefully reviewing the record, briefs, and arguments of the parties, we

conclude that PHG presented competent, material and substantial evidence that the

proposed hotel satisfied the relevant conditional use permit standards set out in the city's unified development ordinance," said Justice Samuel Ervin IV writing for the majority.

More: NC Supreme court to hear Asheville hotel case

"The record did not contain any competent, material and substantial evidence tending to establish that the proposed development failed to satisfy the applicable ordinance standards," Ervin said.

PHG President Shaunak Patel said construction would begin "as soon as possible."

"We are certainly aware of the current environment, but that doesn’t affect the long-term viability of the project. Asheville is resilient and no visible or invisible enemy can diminish it’s character and allure," he said.

Patel called the court cases a "complete waste of public and private funds" and attacked Mayor Esther Manheimer, saying she was behind the push to appeal the case, despite the council unanimously supporting the moves.

In May 2019 the council turned down PHG's $4.1 million settlement offer. Asked about the offer in January, Manheimer declined to comment.

"Asheville needs a leader that supports and brings the community together now more than ever," Patel said. "She has continued to villainize those in hospitality, and we will not let her political agenda divide us."

Manheimer declined on April 3 to respond to Patel's criticism. The mayor instead said the case showed the limits of an old permit approval process no longer used by the council.

The conditional use permit process followed a quasi-judicial procedure in which council members couldn't research or discuss the proposal before it came to them for a vote. They had to rely on only presented evidence given under oath and couldn't negotiate with the developer during he process.

“I’m disappointed that the NC Supreme Court did not uphold the decision of the City Council to deny the application for the construction of this hotel," Manheimer said. "I think the legal wrangling involved in this case highlights the limitations of the quasi-judicial building application process, specifically the limitations on a council to vote the will of the people.”

Justice Anita Earls, joined in her dissent by Justice Robin Hudson, said the prior courts were wrong in brushing aside the council's fear the hotel would cause "undue" traffic problems. Earls said that fear was not "whimsical" or "patently false."

"In my view, under the whole record test, the Asheville City Council's determination that PHG Asheville LLC , failed to meet its burden of establishing that the proposed use would not cause undue traffic congestion or a traffic hazard was not arbitrary or capricious," she said.

Joel Burgess has lived in WNC for more than 20 years, covering politics, government and other news. He's written award-winning stories on topics ranging from gerrymandering to police use of force. Please help support this type of journalism with a subscription to the Citizen Times.