Village settles in Allegro lawsuit

Published 12:58 am Tuesday, May 4, 2021

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Clemmons to pay $150,000 and agrees to allow Zoning Map Amendment for multifamily apartment project

By Jim Buice
For the Clemmons Courier

For the second time in three years, the Village of Clemmons has agreed to pay $150,000 as part of a settlement agreement for the denial of a rezoning request by Allegro Investment Properties LLC for the Village of Kinnamon multifamily apartment project.

But this time, an additional agreement in the settlement allows the Zoning Map Amendment for Carlos Pereira from RS-15 & LO-S to RM-12-S (Residential Building, Multifamily) located at 3462 Clemmons Road — PIN number 5893-30-8703 and 5893-30-9990 — approx.. +/ 8 acres — Zoning Docket C-234, meaning the plaintiff — Allegro Investment Properties — can proceed with the affordable housing development on the same property off of U.S. 158 near Kinnamon Village.

The Clemmons Village Council went into closed session in last Monday night’s regular meeting but reconvened without taking action that night and then went into recess until reconvening Friday at 2:30 p.m. at village hall. Another closed session followed with no action before going back into open session.

At that point, councilman Scott Binkley made a motion to approve the settlement agreement, which was seconded by councilman Chris Wrights. Councilman Mike Rogers, who attended remotely, voted “no” as did councilwoman Michelle Barson. Councilwoman Mary Cameron abstained, which is a default “yes” vote, meaning the motion passed 3-2.

A similar project on this site was proposed in 2015 by Allegro and denied by the council but later resulted in a conciliation agreement, with Clemmons paying $150,000 in the settlement in January 2019, to resolve claims raised by the N.C. Human Relations Commission that “reasonable grounds exist to believe that unlawful discriminatory housing practices have occurred.”

Wait maintained in a statement afterward that while signing a settlement agreement resolving allegations of discriminatory housing practices against Clemmons, the village “maintains that it did not unlawfully discriminate” against Allegro’s rezoning request.

Allegro came back with another rezoning request for a project in the same location last year, and even before it was rejected by the council in June, Mayor John Wait said that he received a letter from the petitioner’s attorney stating “you either need to approve this, or you’re going to get sued.”

And that was indeed the case as the village received notice that a lawsuit had been filed Aug. 6, 2020, in Forsyth County Superior Court by Allegro Investment Properties LLC with regard to denial of their rezoning request for the Village at Kinnamon project.

In the complaint filed by Fox Rothschild LLP, the plaintiff’s attorney, action was brought against the Village of Clemmons “for a declaratory judgment, injunctive relief, and damages based on the illegal, erroneous, and discriminatory denial of a zoning map amendment,” alleging the case is about Clemmons’ “rejection of an affordable housing development.”

Further, the lawsuit stated, “A previous denial by the village for an identical rezoning request for an affordable housing development on the same property resulted in a finding of discrimination by the N.C. Human Relations Commission and the village’s payment of $150,000 as settlement.”

After two May meetings that included a public hearing (May 11) and then tabling a vote (May 26), the council voted June 8 against rezoning 6.86 acres from RS-15 & LO-S to RM-12-S (residential building/multifamily) for the Village of Kinnamon project that includes three large buildings with up to three stories, including 41,835 square feet and 78 units (one, two and three bedrooms).

Councilwoman Michelle Barson made the motion to adopt the inconsistency statement provided by staff, which read as follows:

“The Clemmons Village Council finds the action to amend the village’s Official Zoning Map regarding portions of tax parcels 5893-30-8703 and 5893-30-9990 from LO-S (Limited Office — Special) and RS-15 (Residential Single Family) to RM-12-S (Residential Multifamily — Special) to be inconsistent with the Village of Clemmons Community Compass (2040). The Clemmons Community Compass (2040) calls for Village-Scale Office and Retail use on the parcels of interest. The village’s RM-12-S zone does not meet Village-Scale Office and Retail as the use is not a commercial use and the proposed development is too high of a density for a village scale development. The current zone of RS-15 and LO-S conform closer to Village-Scale Office and Retail, and will assist the parcels of interest reach its intended goal of development in step with Village-Scale Office and Retail, and to reject the rezoning request in Docket C-234.”

The final vote against the rezoning was 4-1 in favor with councilwoman Mary Cameron casting the lone dissenting vote.

In the meeting on Aug. 10, 2020, after the filing of the lawsuit, Clemmons attorney Elliot Fus mentioned a “major development on the legal side” but didn’t go into the specifics of the 29-page lawsuit, which included “Exhibit A,” detailing the determination from the N.C. Human Relations Commission regarding the previous lawsuit.

In the introduction of the complaint, it states that “although the village routinely approves zoning map amendments that are generally consistent with the broad guidelines and recommendations of its Comprehensive Plan, when Allegro Investment Properties LLC applied for affordable multi-family tax credit housing that was shown to be overwhelming consistent with the Comprehensive Plan, the village departed from its routine and denied Allegro’s application based on hyper-technical excuses of ‘incompatibility.’ ”

It further states that the denial was “pretextual and illegal” and “was motivated by numerous citizens’ written and public hearing comments that referred to potential crime, drugs, decline in property values, ‘those people,’ and other alleged problems that suggested the village should deny the rezoning because of the race and nationality of anticipated tenants,” and later recounted details of the “2015 rezoning denial and race discrimination settlement.”

It added six causes of action and concluded with Allegro requesting that this court enter a judgment, orders, impose any and all civil penalties, and award Allegro actual damage, punitive damages and cover costs and expenses as proven and allowed at trial.

When asked for comment at that time on the lawsuit, Wait said, “I cannot comment on pending litigation at this time.”

Wait again had “no comment” after Friday afternoon’s action, pointing to a “Confidentiality” section of the three-page settlement agreement that states “the parties expressly agree not to comment upon, discuss or disclose to any person or entity any information concerning the terms, conditions and provisions.”

When Wait asked for any further comments from council during the meeting after the vote, there were none.

After the previous conciliation agreement in 2019, Wait said that most of the $150,000 that time was to be paid by the village’s insurance company.

Village Manager Scott Buffkin added on Monday that Clemmons was responsible for a $5,000 deductible two years ago with the insurance taking care of the rest. He said that the insurance company is actually considering this as a continuation of the case from a couple of years ago, so there may not be any further deductible this time.

“Honestly, at the point, $5K would be the maximum out of our pocket and perhaps zero,” Buffkin said.