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HomeMy WebLinkAboutBOA minutes 081318 Approved January 14, 2019 1 MINUTES 2 BOARD OF ADJUSTMENT 3 August 13,2018 4 REGULAR MEETING 5 6 MEMBERS PRESENT: Karen Barrows, Vice Chair 7 Susan Halkiotis 8 Barry Katz 9 Randy Herman 10 11 STAFF PRESENT: Michael Harvey, Current Planning Supervisor 12 Patrick Mallett, Planner II 13 James Bryan, Staff Attorney 14 15 AGENDA ITEM 1: CALL TO ORDER 16 Vice Chair Karen Barrows called the meeting to order at 7 p,m. 17 18 AGENDA ITEM 2: CONSIDERATION OF ADDITIONS TO AGENDA 19 There was none. 20 21 AGENDA ITEM 3: APPROVAL OF MINUTES—July 9, 2018 Barry mentions two sets of minutes 22 It was noted that the word "statue" needed to be replaced by"statute"in several places. 23 MOTION by Barry Katz to approve the July 9, 2018, minutes. Susan Halkiotis seconded. 24 VOTE: UNANIMOUS 25 26 AGENDA ITEM 4: PUBLIC CHARGE 27 Barry Katz read the public charge. 28 29 The Board of Adjustment pledges to the citizens of Orange County its respect. The Board asks its citizens to conduct 30 themselves in a respectful, courteous manner, both with the Board and with fellow citizens. At any time should any 31 member of the Board or any citizen fail to observe this public charge, the Chair will ask the offending person to leave the 32 meeting until that individual regains personal control. Should decorum fail to be restored, the Chair will recess the meeting 33 until such time that a genuine commitment to this public charge is observed. All electronic devices such as cell phones, 34 pagers,and computers should please be turned off or set to silenflvibrate, 35 36 The Board of Adjustment is a quasi-judicial administrative body established in accordance with the provisions of local 37 regulations and State law to perform specified functions essential to the County's planning program.Actions)taken by the 38 board are based solely on competent, substantial, and material evidence presented during a previously scheduled and 39 advertised public hearing on a specific item. As detailed within Section 2.12.2 of the UDO the Board chair reserves the 40 right to exclude evidence and testimony that is deemed: 'incompetent, irrelevant, immaterial, or unduly repetitious'and 41 therefore fails to reasonably address the issues before the Board of Adjustment While it should be noted there is no time 42 limit on the presentation of evidence, the Chair asks that the presentation of evidence be consistent with established 43 policies, rules of procedure, and acceptable levels of decorum to ensure a fair and equitable hearing for all parties. 44 45 45 AGENDA ITEM 5: A-3-18 — PUBLIC HEARING TO CONTINUE REVIEW of an application 47 appealing the final determination of the Planning director, as articulated in an October 13, 48 2017, letter, concerning a parcel of property located at the intersection of Morrow Mill and 49 Millikan Roads (PIN: 9729-50-7168) owned/operated by Southeast Property Group LLC (a.k.a. 50 Wild Flora Farm) care of Ms. Kara Brewer. Approved January 14, 2019 1 Staff Attorney James Bryan said in past cases, he has given an opening statement about what is quasi-judicial and I 2 what is not to clear confusion. He explained the Board of Adjustment appeals procedure. He simplified that facts can be 3 reasonably decided and rules are correctly interpreted. He noted that facts decided by this board cannot be arbitrary or 4 capricious but rather supported by competent, material, substantial evidence in the record. The rules are interpreted by 5 the law. He reviewed how the Board of Adjustment determines the facts. This board makes findings of facts if facts are 6 based on competent, material and substantial evidence that are not arbitrary or capricious and are presented in the 7 record. Competent evidence is legally fit so that it is trustworthy, and reliable and competent evidence for traffic and 8 property values must be provided by experts in those fields. James Bryan also reviewed that substantial evidence is 9 sufficient to support a specific conclusion. 10 11 James Bryan then reviewed the flow for facts and shared a diagram that explained that before the public hearing, the 12 application is submitted and the staff report is written. At the hearing, evidence is given on the record and then the j 13 hearing is closed and the board deliberates. The board then takes all the evidence presented for the record at the 14 hearing and determines findings of fact based on whether it was competent, material and substantial evidence. The 15 staff attorney noted that some evidence may be uncontested and other evidence may be excluded, In cases where 16 there is evidence on both sides for a relevant standard,the board must decide based on its reasonable judgment. 17 18 James Bryan then reviewed how the board interprets a rule and presented a slide to remind everyone that if the text is 19 clear and unambiguous, its plain meaning should be enforced. If an ambiguity remains, the board must favor the 20 property owner and the free use of land. 21 22 James Bryan then established the framework for this case. Regarding jurisdiction, on Page 11 of the agenda packet, 23 there is a letter from Current Planning Supervisor Michael Harvey dated October 13, 2017, that is a final and binding 24 decision of staff, which carries the weight of law. Regarding whether the applicants have standing, the board will find on 25 Page 51 of the agenda packet the applicants'statement of standing. James Bryan reviewed that regarding the rule, this 26 is a new statute N.C.G.S. §153A-340(b)[2a).This was passed by the General Assembly in July 2017. 27 28 Barry Katz said this is a case that predates the change in the law. He wonders how the change in the law is relevant to 3 29 this case. James Bryan said the parties can better speak to that, 30 31 James Bryan then reviewed that before Michael Harvey wrote his letter on October 13, 2017, he received a request, 32 James Bryan reviewed that the request was for a classification that the structure on the property is a structure for a ? 33 farm purpose, pursuant to N.C.G,S. §153A-340(b)(2a). He then highlighted the first sentence in a paragraph of the 34 statute that states: "A building or structure that is used for agritourism is a bona-fide farm purpose if the building or 35 structure is located on a property that is owned by a person who holds a qualifying farmer sales tax exemption 36 certificate from the Department of Revenue pursuant to G.S. 105-164.13E(a). James Bryan said he does not think 37 either parties are arguing over the last part of that statement. James Bryan said the applicant included the property 38 owner's original request, which is one letter with four exhibits. James Bryan referred to Page 10 of the agenda packet to 39 answer how staff responded to the rule, noting that Michael Harvey laid out four sections. 40 41 Barry Katz said the deed for the property was filed with Mark Chilton on March 24, 2015. Is it relevant for him to ask 42 when the barn itself was purchased. 43 44 James Bryan said he does not know whether it is relevant but Barry Katz will have an opportunity to ask that when the 45 applicant is before the board. 46 47 James Bryan returned to Page 10 of the agenda packet, noting there were five attachments to Michael Harvey's letter, 48 pages 12 - 50 of the agenda packet. He noted that Page 51 is what the appellant says is wrong with the staffs 49 determination. He noted that Page 68 is the new information that is available. This is 20 pages that were submitted by 50 the applicant upon the board's subpoena. This information includes the application to the state for a qualifying farmer Approved January 14, 2019 1 exemption certificate number; the Internal Revenue Service letter issuing an employer identification number; and the 2 plan of merger of Wild Flora Farm, LLC, with Southeast Property Group, LLC. 3 4 James Bryan said to apply the principles to the present case, a structure is a bona fide farm purpose if the structure is 5 used for agritourism and the person who Owns the property where the structure is located is the same person who 6 holds a qualifying farmer sales tax exemption certificate from the Department of Revenue pursuant to G.S. 105- 7 164.13E(a). He thinks there will be three conclusions the board will have to make. 8 #1 Is the structure used for agritourism? 9 #2 Who owns the property where the structure is located? 10 #3 Does that owner have a certificate from the North Carolina Department of Revenue indicating a farmer sales tax 11 exemption? 12 13 James Bryan said when reviewing Michael Harvey's determination for an appeal, the Board of Adjustment stands in the 14 staff person's shoes and says this is what should have been done. That decision is made today after evidence is 15 presented. 16 17 James Bryan shared a slide repositioning all of the information. He said the current evidence in the agenda packet is 18 the building permit found on Page 19 and the farm plan summary, website, correspondence regarding weddings and 19 educational workshops, social media and other pictures found on Page 26. His slide noted the facts used by staff but 20 James Bryan noted that the board may receive additional evidence this evening or may determine that some of this 21 evidence is not competent, material or substantial. The board will determine its facts. James Bryan then reviewed that 22 the board will have to decide that the structure is used for agritourism or is not used for agritourism. 23 24 Barry Katz said it has been his impression that Kara Brewer and her attorney have been arguing that the Unified 25 Development Ordinance is not germane to this and it is essentially a state issue and not a county issue. So, why are we 26 discussing this? 27 28 James Bryan answered that the General Assembly has tried to craft what they want for many years. What they drafted 29 here isn't the clearest but don't let the perfect be the enemy of the good. 30 31 Barry Katz said he would like to look at the statute while James Bryan answered. It was noted that the statute starts on 32 Page 92 of the agenda packet. 33 34 James Bryan read this sentence excerpted from the statute and found at the top of Page 92 in the agenda packet, 35 "Failure to maintain the requirements of this subsection for a period of three years after the date the building or 36 structure was originally classified as a bona fide purpose pursuant to this subdivision shall subject the building or 37 structure to applicable zoning and development regulation ordinances adopted by a county pursuant to subsection (a) 38 of this section in effect on the date the property no longer meets the requirements of this subsection." 39 40 James Bryan noted that there is a time limit of three years from the date the building or structure was originally 41 classified as a bona fide farm purpose. If not the county, who makes that classification?The applicant asked the county ' 42 to make that classification and Michael Harvey made that classification as a bona fide farm purpose. 43 44 Barry Katz asked for confirmation that staff made that classification because the structure is a barn on a property that 45 has an agricultural tax exemption. 46 47 James Bryan said anybody can ask for a classification and staff will make that determination if that first sentence is met. 48 49 Barry Katz asked that the property owner does not have to be a farmer to gain that classification. 50 Approved January 14, 2019 1 James Bryan answered that you have to meet the letter of the law. 2 3 Barry Katz checked that this barn qualifies for agritourism because it is situated on property that qualifies for an 4 agricultural tax exemption. He asked James Bryan if that is part of the argument. 5 6 James Bryan said it was imperfectly cited, so he couldn't say. 7 8 Randy Herman added that there is a definition of agritourism later in that section. 9 s 10 Barry Katz said he has read the definition. I 11 12 James Bryan said the second element is who owns the property. He shared a slide that lists current evidence in the 13 agenda packet including: 14 1. Building Permit(PIN)on Page 19 15 2. Orange County Land Records showing owner as SPG, LLC,on Page 42. 16 3. Deed recorded at Orange County Register of Deeds showing SPG, LLC,on Page 45. i 17 4, Articles of Merger filed with NC Secretary of State showing Wild Flora Farm, LLC, as surviving entity after being 18 merged with SPG, LLC,on Page 83. 19 5. Certification of Merger filed with Orange County Register of Deeds showing merger of SPG, LLC, into Wild 20 Flora Farm, LLC,on Page 85. ' 21 22 James Bryan noted Michael Harvey did not have the merger information when he made his determination in October 23 2017. 24 25 Barry Katz asked how an entity would fail to maintain requirements, 26 27 James Bryan said he would presume if you no longer hold a certificate from the North Carolina Department of Revenue, 28 no longer own the property,or no longer are engaged in agritourism. 29 30 Barry Katz asked in agritourism or agriculture? 31 32 James Bryan answered agritourism because that is explicitly what the statute requires. 33 34 James Bryan reviewed some sample motions for the board's decision,which were shown on a slide. 35 36 Barry Katz asked if the board would be hearing about continuity of ownership. 37 38 James Bryan answered that the parties can respond to that. 39 40 Current Planning Supervisor Michael Harvey reviewed that the abstract package begins on Page 3. A public hearing 41 began at the May 7, 2018, regular meeting, where the board chose to issue subpoenas, at the request of the applicant, 42 to Wild Flora Farm, LLC, and other parties for information submitted to the North Carolina Department of Revenue as 43 part of an application for a qualifying farm exemption certificate. At the board's July 9, 2018, meeting, those responses 44 were provided to the board along with other motions by the attorney for Kara Brewer, the owner of Wild Flora Farm, 45 LLC, As James Bryan has alluded and as covered in the abstract, what precipitated this appeal was on July 12, 2017, 46 Session Law 2017-108 became effective. The excerpt of this session law is contained in Attachment 4 of the abstract 47 package and begins on Page 92. It establishes criteria for the use of structures on a bona fide farm for agritourism 48 events, Staff received a request from the attorney for Kara Brewer, Andy Petesch, on October 12, 2017, asking for the 49 determination classifying the use of the barn building and structure at Wild Flora Farm for agritourism events as a bona 50 fide farm and therefore exempting for it from county zoning regulations. Michael Harvey said Andy Petesch based this Approved January 14, 2019 i 1 request on the relevant session law. In reviewing the request provided by Andy Petesch, staff made the determination 2 that the structure qualified for bona fide farm purpose as recently amended under the North Carolina General Statutes 1 3 and as such was not subject to county zoning regulation and the owner could engage in agritourism activities,which the 4 statute indicates includes weddings. Staff provided Andy Petesch with a copy of the determination, along with LeAnn 5 Brown, attorney for the appellants.That staff determination has been appealed. 6 7 Michael Harvey reviewed that the appeal begins on Page 5. The subpoena response begins on Page 68. The request 8 to quash or modify the subpoenas begins on Page 89, The aforementioned Attachment 4 begins on Page 92. The 9 excerpt from the May and July 2018 meetings begins on Page 94. He asked that the abstract and all attachments be j 10 put in the record, f 11 12 MOTION by Susan Halkiotis to enter the abstract and all attachments into the record. Barry Katz seconded, 13 VOTE: UNANIMOUS 14 15 LeAnn Brown said she represents the appellants and read their names, acknowledging they are the same people who 16 have been involved in the other appeals this board has heard regarding this property. She said that this is an appeal of 17 a decision that was made October 13, 2017. She said the appeal was dated November 7, 2017, and noted it has taken 18 awhile to get before the Board of Adjustment, She said one of the first items that the board needs to deal with is the 19 item regarding standing, She said she has a certified copy of the minutes from the first time the Orange County Board 20 of Adjustment heard an appeal regarding this property,which included detailed evidentiary materials that gave evidence 21 of standing. So, in addition to what's in the application that Michael Harvey has introduced into evidence addressing 22 standing, she is offering into evidence those minutes so that the board does not have to receive additional hours of 23 testimony about standing. She asked that the board receive that as sworn testimony. Also included in those minutes is 24 the determination that was made by this board in connection with the Special Use Permit that the use that was 25 proposed would not maintain or enhance the value of contiguous property. She noted the board has received the 26 certified copy of the minutes twice as sworn testimony in determining whether her party has standing. I 27 28 Barry Katz asked for the date of the meeting minutes regarding standing. 29 30 LeAnn Brown answered October 10 and 24, 2016.And everyone still lives in the same place and is still doing the same 31 thing. LeAnn Brown explained the circumstances whereby several people she represents could not be present this 32 evening and acknowledged that she would have to ask for this public hearing to be continued if the board determined it 33 needed testimony from the individuals in order to establish standing. 34 35 LeAnn Brown said in the October 2016 minutes she is passing out, Page 19 acknowledges the board's earlier finding 36 that those individuals she represents have standing, in addition to what's on Page 51 of the agenda packet. She asked ? 37 if the board agreed to find standing. Board members informally agreed. I 38 39 Andy Petesch requested to make a brief comment regarding the submission of these materials as standing, Andy 40 Petesch does not object to the certified minutes but wanted to note for the record that he objected then and objects now 41 to the finding that the individuals LeAnn Brown represents have standing. 42 43 LeAnn Brown asked if the board finds that the individuals she represents have standing so that she can proceed. Board 44 members nodded. LeAnn Brown noted for the record that all the board members nodded assent. 45 46 LeAnn Brown said in the materials filed in the appeal, there is an error alleged that she wants to address. She said 47 Southeast Property Group, LLC, which is now called Wild Flora Farm, LLC, by merger -- a merger that occurred well 48 after this tax certificate -- Southeast Property Group, LLC, applied to this board for a Special Use Permit in 2015. The 49 facts are, as is reflected in the minutes that the board has received into evidence, that Michael Harvey originally 50 determined that a Class B Special Use Permit was required for the events center that was going to be built upon the Approved January 14, 2019 1 property. There was no appeal taken of his determination that a Special Use Permit was required. She was not the 2 attorney for the opposing individuals at that time, but by the time the public hearing was held by the Board of 3 Adjustment, evidence suggests that Kara Brewer was proceeding voluntarily. Nonetheless, Kara Brewer chose to seek 4 a Special Use Permit from the Board of Adjustment. The Board of Adjustment held hearings, received evidence, 5 considered the facts, and denied the Special Use Permit on the grounds that it did not mean the facts that the board 6 must find in order to grant one. That occurred in 2015 and one of the documents before the board is the order of the 7 decision determining that in 2015. 8 9 LeAnn Brown asked the board to receive into evidence Exhibit 2, which was handed to board members a few minutes 10 earlier. 11 12 MOTION by Randy Herman to accept Exhibit 2 into evidence, Barry Katz seconded. 13 VOTE: UNANIMOUS 14 15 LeAnn Brown noted she had just passed copies of Exhibits 3, 4 and 5 to James Bryan for distribution to the board. She 16 reviewed that Exhibit 3 is the petition to deny the Special Use Permit; Exhibit 4 is the writ of certiorari granted by the 17 court, which means the court was intending to hear it; and Exhibit 5 was a dismissal with prejudice of the appeal. The 18 building involved and the land involved is the same as before the board now. She noted this is a quasi-judicial hearing 19 and the doctrines of res judicata and collateral estoppel apply in quasi-judicial hearings. She has copies of a case, 20 Mount Ulla Historical Society v, Rowan County, that talks about the doctrine of res judicata. Res judicata in a zoning 21 case is for the purpose of protecting litigates from re-litigating previously decided matters. It applies to Board of 22 Adjustment quasi-judicial decisions. If you can show that the fact and reasons obviate the reason the denial occurred, 23 then it would not apply, but otherwise it applies. In the Mount Ulla case, there was a three-year period of time between 24 the first Board of Adjustment decision and the second. It involves a radio tower and the radio tower was 1,250 feet in 25 the first application and it was changed to 1,000 feet in the second, The board determined that it was a different tower 26 because it was a different height and the court reversed that and said res judicata that the concerns expressed by the 27 board with regard to the reasons for denial and not been obviated. 28 29 LeAnn Brown said the doctrine of collateral estoppel also applies to this proceeding. She noted collateral estoppel 30 means determination of an issue in a prior judicial or administrative proceeding precludes re-litigation of that issue. It 31 bars a subsequent adjudication of a previously determined issue even if a subsequent action is based on an entirely 32 different claim. It is designed to prevent repetitive lawsuits over matters which have been decided and which have 33 remained substantially static factually and legally. And it applies to quasi-judicial opinions. There is a 2013 Court of 34 Appeals opinion called Hillsboro Partners v. the City of Fayetteville, which is again a land use matter in which this 35 doctrine was held to apply. The filings that have occurred in this case: May 18, 2015, application for a Special Use 36 Permit, as LeAnn Brown had mentioned, Michael Harvey had originally indicated to Kara Brewer, who was seeking the 37 permit through her entity that owned the property, Southeast Property Group, LLC, that she had to have a permit. Kara 38 Brewer did proceed. It was denied on November 9, 2015. The order is included in Exhibit 2. It was appealed and it was 39 dismissed with prejudice. LeAnn Brown noted she has said "with prejudice" twice because she thinks it is very 40 significant. 41 42 Barry Katz asked what that means. 43 44 LeAnn Brown answered that it means this matter was litigated, the board had a quasi-judicial hearing, it was appealed 45 by Southeast Property Group, LLC, and Kara and Chris Brewer to Superior Court. It was never heard and when it was 46 dismissed, it was dismissed with prejudice, which means it was dismissed without an opportunity to bring it back to 47 court. She said it is her contention and has been her contention that once the decision was made to dismiss that 48 petition, that's the end of the story and whatever has happened subsequent to that with regard to this property, whether 49 or not the statute should have applied then or now is foreclosed by that, It's foreclosed under the doctrines of res 50 judicata and collateral estoppel, LeAnn Brown said. i Approved January 14, 2019 1 2 Barry Katz asked if Superior Court gave a reason for dismissing it with prejudice. 3 4 LeAnn Brown answered that she cannot speak to that because that is not her case. It would be for Andy Petesch to 5 answer. She reiterated that the dismissal with prejudice brought an end to the recourse for appealing the Orange 6 County Board of Adjustment decision to deny the Special Use Permit. She added that she believes Southeast Property 7 Group, LLC, and Kara and Chris Brewer were without recourse before the petition to Superior Court was filed because 8 when Michael Harvey first determined that she had to file for a Special Use Permit, Kara Brewer should have appealed 9 that to the Board of Adjustment, And that never occurred. 10 11 Randy Herman said the effect of all that would be that the property owner does not qualify for a Special Use Permit and 12 he does not think that the property owner is now arguing that they do but rather that the statute has changed such that 13 the property is no longer subject to our zoning entirely. 14 15 LeAnn Brown said that under the doctrine of res judicata and collateral estoppel when you have chosen the means by 16 which you proceed before a quasi-judicial body and seek a permit and then you choose not to appeal that decision that 17 you have chosen the path that you are going to take. You have set your course of action. Once you are denied the 18 Special Use Permit, you cannot appeal that and dismiss it and then come back and say, `You know what, I don't think I 19 ever needed it anyway.'And that is exactly what has happened here. 20 21 Randy Herman said the statute under which they are proceeding did not exist at the time that they initially applied so 22 they couldn't have chosen that path at that time. 23 24 LeAnn Brown said the statute at the time that they saw the Class B Special Use Permit is the statute that this board 25 was considering when it considered the appeal in 2016 and then the statute said what it says now about nonfarm use. 26 That zoning always applies when a farm property is being used for a nonfarm use. That sentence has not been taken 27 out of the statute.And that's the sentence I think Michael Harvey was considering when he made the decision that Kara 28 Brewer needed a Class B Special Use Permit in the first place, or that the property owner did, The statute did exist. It 29 has been amended to delete the provision that allowed a property owner to rely upon a farm number, which is what 30 Kara Brewer was relying upon, but has added the provision that talks about structures. So, yes, the statute has 31 changed but as she said, related to the Hillsboro Partners case, the doctrine of collateral estoppel will apply even if the 32 subsequent action is based on a different claim, And she thinks that's the only thing that's happened here is it's a 33 different claim. The language is still the same. The building is still the same. The property is still the same. It is still the 34 same intended use. 35 36 Barry Katz said he recalls Kara Brewer voluntarily applying for the Special Use Permit. 37 38 LeAnn Brown said the minutes show that initially the county determined that she had to apply for it. The county then 39 determined that she did not necessarily need to do that. And by the time the hearing took place, Kara Brewer had i 40 decided to voluntarily proceed and in the hearing she said she was voluntarily proceeding. Voluntarily or not, she chose 41 that path, And when that didn't work out, they've used different avenues and that's what collateral estoppel says you 42 can't do. 43 44 Randy Herman asked LeAnn Brown if she has a case that says that res judicata or collateral estoppel applies when the 45 substantive law has changed between the first proceeding and the second proceeding. 46 47 LeAnn Brown said she does not have a case that talks about a change in statute between the first proceeding and the 48 second proceeding. She said she is happy to hand out the cases she mentioned, She thinks both cases she mentioned 49 are clear that the claims can change but if the facts are still the same, the facts are still the same. We are not allowed in 50 the law to have a proceeding and be unhappy with the results and then find another theory and another theory and Approved January 14, 2019 1 another theory she said. There have been four appeals and her party contends that res judicata and collateral estoppel 2 bring an end to this proceeding, 3 4 LeAnn Brown said she has Other reasons for the board to rule in her party's favor. In March 2016 there was an 5 application for a building permit and the planning supervisor determined that a building permit was not needed, The 6 Board of Adjustment heard that and remanded it back to Michael Harvey. That was appealed and that appeal is 7 pending. Then the current planning supervisor on remand determined that it was a bona fide farm and the use of the 8 barn for weddings was incidental to the farm use. That was around November 2016. Her party appealed on December 9 1, 2016, and that case was heard on March 17, 2017. There is a pattern of taking a long time for her to get before the 10 Board of Adjustment, LeAnn Brown added. The Board of Adjustment determined that the barn was an events center 11 and reversed the current planning supervisor. That's on appeal. There was a petition for review for that filed on May 4, 12 2017. There was an NOV(Notice of Violation) that was issued that Southeast Property Group, LLC, has appealed, Her 13 party filed an appeal of the determination that it was a rural special events center, which is one of the things that 14 happened.Those appeals have never been heard.And then we have this appeal. 15 16 LeAnn Brown said her first contention to this board is that because of the doctrines of res judicata and collateral 17 estoppel that this matter is not properly before the board and the board should determine that those doctrines should 18 prohibit Kara Brewer from seeking the opinion that she sought from Michael Harvey. LeAnn Brown plans to talk about 19 why her party believes the current planning supervisor erred and why she thinks he erred in saying that the materials 20 that he had before him were sufficient to comply with the current version of N.C.G.S. §153A-340(b)(2a). The party has 21 a pending application before the court to compel further compliance with the subpoenas this board issued. She said she 22 looked at whether to postpone this hearing because that's pending and she wanted to preserve her rights to seek 23 additional documents and so that has been filed, but in looking at the documents that the subpoenaed parties chose to 24 produce to the board that are in Exhibit 1, she thinks the evidence is clear that Orange County erred in determining that 25 the owner of the property has an exemption certificate from the North Carolina department of Revenue, She said she 26 thinks the last time she was before this board, Randy Herman asked her if she thought this board could look behind the 27 Department of Revenue to determine whether the information that department had was adequate to issue the 28 certificate. She does not plan to get there tonight but what Orange County did was look behind the clear language on 29 the face of the certificate and connect dots to say that a certificate issued to some entity other than the owner of the 30 property was in fact a certificate for the owner of the property.The certificate is issued in the name Wild Flora Farm. It is 31 not Wild Flora Farm, LLC, Wild Flora Farm, LLC, did not exist on the date the certificate was issued, 32 33 Karen Barrows noted that LeAnn Brown had spoken for 30 minutes and asked if she could wrap up in the next 10 34 minutes. 35 36 LeAnn Brown said she could wrap up in 10 to 15 minutes and asked that the board give her at least as much time as 37 County Attorney James Bryan and Current Planning Supervisor Michael Harvey took. LeAnn Brown said she is not 38 presenting a lot of evidence but she wants to be sure her party has the proper due process for the board to hear this 39 argument in full. 40 41 LeAnn Brown read the portion of the N,C,G,S, §153A-340(b)(2a) that states that the property owner must hold the 42 qualifying certificate of a farming sales tax exemption. She noted that the sales tax exemption certificate requires an 43 income from farming of$10,000 for the previous tax year or for an average of$10,000 a year over a three-year period. 44 The certificate is dated November 22, 2017. The preceding tax year would be 2016. The profit-and-loss sheet produced 45 identifies the tax year as 2016. That document lists Wild Flora Farm without the LLC and lists Kara Brewer's name 46 under it. The application included in the documents that were produced in answer to the subpoena has Kara Brewer as 47 the applicant doing business as Wild Flora Farm, What that means is that the person who applied was Kara Brewer and 48 she used the DBA of Wild Flora Farm. There is no evidence that she used the DBA of Wild Flora Farm as an individual 49 but that's what her application to the Department of Revenue says. So, LeAnn Brown thinks the board should look at 50 that at face value and say the person who applied is Kara Brewer doing business as Wild Flora Farm. The entity that 1 i Approved January 14, 2019 1 owned the property at the time the application was made was Southeast Property Group, LLC. There is no dispute 2 about that, Wild Flora Farm, LLC, was not created until February 14, 2017. It could not have had income in 2016, The 3 tax identification number was not obtained until April 12, 2017. The tax ID number on the documents was partially 4 redacted. It looks similar but the document produced shows that the I❑ was obtained April 12, 2017. The articles of ! { 5 merger for Wild Flora Farm, LLC, and Southeast Property Group, LLC,were not filed until February 19, 2018, on a plan 6 of merger dated February 14, 2018, Nothing in the evidence suggests that an exemption certificate obtained was 7 obtained in the name of the owner of the property, LeAnn Brown clad. There is an assumed name certificate for 8 Southeast Property Group, LLC, to do business as Wild Flora Farm but it wasn't recorded until October 12, 2017. Here 9 is how the staff erred. Staff determined that Kara Brewer is a memberlmanager of the LLC and therefore a certificate in 10 her name is the same as a certificate in the name of the LLC. And then there was the merger and the names are similar 11 so if we sort of connect the dots, it must all be the same thing, LeAnn Brown said we cannot look behind what that j 12 certificate says and we likewise cannot do the work for someone who is applying and say well, if you'd done it right, it 13 would say this or this. Kara Brewer is not Southeast Property Group, LLC. The fact that she is a member of it simply 14 means she is a member of it, Just as she would not want her personal liability to be subject to any lawsuit filed against 15 Southeast Property Group, LLC, her as an individual obtaining the certificate of exemption is not adequate to meet the 16 statute. Unless the certificate said Southeast Property Group, LLC, related to income it earned in 2016, it would not be 17 a certificate that meets the requirements of the statute. 18 19 LeAnn Brown said that Michael Harvey noted in his letter from which her party appealed in the thing that is an advisory 20 opinion that changes in the property ownership could subject the property to the Unified Development Ordinance. It was 21 not part of Michael Harvey's final and binding determination but she thinks it was an interesting point. She would ask i 22 the board to find that the request to the county and the grant to the county is precluded by the doctrines of res judicata 23 and collateral estoppel, And on the merits, if the board does not find the evidence that she asks it to find, LeAnn Brown 24 noted the records on the documents do not show that the owner of the property at the time the application was made to 25 the county had a tax exemption certificate. And the county cannot look beyond what the statute requires and allow 26 someone to get a certificate in someone else's name and apply it. That is not what the statute says you can do, The 27 statute does not say you can get the certificate in your personal name and apply it to your corporate entity. i 28 29 Randy Herman requested to ask a question, Karen Barrows said she would ask Andy Petesch to speak first and then 30 give the board time to ask questions. ! 31 32 Andy Petesch addressed the board on behalf of Kara Brewer and Wild Flora Farm, LLC, which is the successor to 33 Southeast Property Group, LLC. Starting with the res judicata and collateral estoppel argument, LeAnn Brown brought 34 up the issue of Michael Harvey having made a determination, Andy Petesch would submit that it was not an appealable 35 determination at any point. It was never in writing. It was something that was verbally conveyed and as Barry Katz 36 noted and as reflected in the minutes, it was something that Kara Brewer had volunteered to pursue. He submitted 37 copies of an excerpt from the abstract of the Special Use Permit hearing and an excerpt from the approved minutes. He s 38 took both from the certified record that went to the Superior Court. He has highlighted some key passages, starting with 39 the abstract case, In staff comments, it is noted that there has been a heightened level of concern that the property 40 meets the requirements to be classified as a farm. On the next page, the second paragraph from the bottom states that 41 when staff first met with the property owner, staff indicated that the project would require a Special Use Permit. That 42 was part of a conversation and not a written determination, which would be required for an appeal. He continued to 43 read from the same paragraph that the property owner informed staff that the property was in farm status but Kara 44 Brewer thought it was prudent to go through the Special Use Permit process. The same paragraph states that the 45 property owner had the ability to have a wedding venue or a retreat on the property as it is recognized as a farm 46 according to state law. That fact has frustrated some residents.Andy Petesch then read from the next page, under the 47 first comment from staff, it states that the farm status is completely separate and irrelevant and has no bearing on the 48 this permit process or on the applicant being allowed to pursue a Special Use Permit proposing the development of the 49 land. Andy Petesch said at the beginning of that hearing, Michael Harvey gave a preface that the board's purpose that 50 night was not to make a determination on the property's status as a farm as defined under General Statutes. Approved January 14, 2019 1 2 Andy Petesch said what these documents plainly show is that these were two separate issues and in fact ... Andy 3 Petesch then passed out copies of an email from Orange County Planner Patrick Mallett to Kara Brewer that indicates 4 that there were always two paths: the proposed barn, as a retreat center, could be permitted in that zoning district with 5 the issuance of a Class B Special Use Permit or as a bona fide farm operation as part of the agritourism activity 6 associated with the law. Those were the two possibilities, It was always presented that she could have gone on either 7 path and one did not preclude the other,Andy Petesch said. What the case law does show is that if she were granted a 8 Special Use Permit, then she could not later attack that Special Use Permit by saying she is exempt. But she never 9 accepted that benefit. She was denied that, which left the possibility of pursuing the farm exemption completely open. 10 11 Michael Harvey asked for the exhibit number for the email from Patrick Mallett to Kara Brewer, There was brief sorting 12 out of the exhibit numbers. Andy Petesch answered the abstract would be Exhibit 6, the minutes would be Exhibit 7, 13 and the email would be Exhibit 8. 14 15 Barry Katz said if Kara Brewer had been granted the Special Use Permit, she would have had no reason to say that this 16 is not a county matter but rather a state matter. 17 18 Andy Petesch said that's interesting that you bring that up because in the case of Marsh v. Union County Board of 19 Adjustment, a gentleman wanted to operate a rodeo and applied for a Special Use Permit, which was granted with nine 20 conditions. One of those conditions was that he could only have four events a year and that he had to open a second 21 access. When his Special Use Permit was revoked for not meeting the conditions, Marsh appealed to Superior Court 22 that his property was exempt and he did not need the Special Use Permit, The court decided to uphold the Board of 23 Adjustment's decision, Marsh did not appeal the decision of the Superior Court but continued to operate. He was issued 24 another notice of violation. He again argued that he was exempt and the court told Marsh that he had missed his 25 chance to make an appeal. Andy Petesch said that is not what is happening here because Kara Brewer did appeal and 26 the fact that it was dismissed with prejudice adds no special effect under the law. Andy Petesch said the board will not 27 find in the petition the reason that she should be allowed to operate is because she is exempt but is limited only to the 28 Special Use Permit and not statutory exemption and that is why res judicata and collateral estoppel do not apply here. 29 30 Andy Petesch said in the case of Bailey and Associates v. Wilmington County Board of Adjustment, the court 31 referenced, in reference to judicial estoppel where a party was seeking to say an application was submitted recognizing 32 property was in a wetland area and now the applicant is changing it to say not in a wetland area, the court described 33 what the Supreme Court says are three factors useful in determining whether judicial estoppel should be invoked, with 34 only the first being essential in the doctrine's invocation. First, the party's subsequent position must be clearly 35 inconsistent with its earlier position. Kara Brewer, consistent with staff, has held the entire time that she can seek the 36 exemption. That she would be exempt once she starts operating a bona fide farm and can do agritourism, At that time, 37 as LeAnn Brown alluded, the agritourism was related to or incidental. Now that's changed and the General Assembly 38 has clarified that standard.Andy Petesch referred back to the court case that the second factor is whether the party has 39 succeeded in persuading an earlier court to that position so that acceptance of a subsequent position in a later 40 proceeding might pose a threat to judicial integrity. He said that gets at the case LeAnn Brown brought up earlier with 41 respect to a cell tower because the shortened cell tower proposal was not substantially different from the first proposal 42 of a slightly taller cell tower.Andy Petesch said one of the reasons why the exemption was not pursued in the beginning 43 is that the owner had not yet begun any agricultural activities on the property so staff could not have said at that time 44 that the property was exempt. There was no agriculture was going on at that time, In order for Kara Brewer to proceed 45 faster,at that point the Special Use Permit was a more streamlined process, 46 47 Barry Katz said Kara Brewer made an error in how she pursued this and now Andy Petesch is claiming she gets a do- 48 over. 49 Approved January 14, 2019 1 Andy Petesch said he would disagree with that characterization of it. There was never an error made. It was indicated 2 to Kara Brewer that she could have pursued either option but one was a faster option. It did not work out but that did not 3 mean that she is precluded from pursuing the other. 4 5 Barry Katz said that the board has heard that it may be, depending on what case law you're looking at, that she is 6 precluded. And then there is this issue that the board has heard that there is an ownership discontinuity. Would Andy 7 Petesch get to that as well? 8 9 Andy Petesch said he would. He said LeAnn Brown did not present any case that is squared on the facts of this case 10 and he has shown the board several reasons why this case is distinguished from other cases. 11 12 Barry Katz said the board has not had time to look at the cases that either Andy Petesch or LeAnn Brown has 13 presented and has not made any determination at all, 14 15 Andy Petesch said the Board of Adjustment does not have the equitable powers to make such a determination. He 16 believes the power is too broad for this hoard and the board's powers are more narrowly prescribed. 17 18 Barry Katz asked if Andy Petesch believes that this would be better decided by Superior Court. 19 20 Andy Petesch answered that he believes LeAnn Brown needs to raise the issue now for it to be considered in Superior 21 Court and he does not believe this board has the authority granted by the state to adjudicate res judicata and collateral 22 estoppel issues. He said he thinks it would be potentially different in a case where you have a very clear Special Use 23 Permit being submitted because that usually is included in the language of the UDC with regards to submitting a 24 substantially similar application but in this case,we're talking about something very different from that. 25 26 Karen Barrows asked Barry Katz to hold his questions, 27 28 Andy Petesch said to address the merits of the materials that have been submitted with respect to Michael Harvey's 29 decision, referring to the agenda packet, the application for a qualifying farmer exemption certificate on Page 70, LeAnn 30 Brown tried to indicate that it would be unreasonable for the staff to go behind the Department of Revenue but he would 31 submit that the application clearly references that if the owner is an entity, partnership or LLC, enter the tax I❑ number 32 on Line 1. Kara Brewer gave the identification number of the LLC and it has been partially redacted but its last three 33 numbers clearly match that of Kara Brewer and Wild Flora Farm, It is the LLC that has made the application and that is 34 further underscored on the profit-and-loss Schedule F, the 1040 form, that again the Wild Flora Farm is the proprietor 35 and the ID number, It also includes a social security number that has been redacted. A single-member LLC Wild Flora 36 Farm, LLC, sole member, also part of plan of merger on Page 74 indicated under paragraph 4 that Kara Brewer was 37 the sole member of Southeast Property Group and Wild Flora Farm. When you have a single member LLC, it is not 38 regarded differently from Kara Brewer herself for tax purposes. From a Department of Revenue standpoint, there is 39 zero difference between Kara Brewer and Wild Flora Farm, LLC, but it is clear that the certificate is issued to Wild Flora 40 Farm, LLC, and not a DBA because the federal tax I❑ number is listed specifically there connecting it. Whether there 41 was a typo in terms of the pen not listing LLC or whether she put her name on the wrong line, those things are 42 irrelevant or at least it is within Michael Harvey's power and this board's power to look at this and make a finding of fact 43 that it was indeed Wild Flora Farm, LLC, that was issued the certificate. While Southeast Property Group, LLC, was the 44 property owner of the time, in October 2017, the merger process had been started and it became effective in February 45 of 2018. The certification of merger was recorded with the Orange County Register of Deeds February 14, 2018. This is 46 a de novo review by this board that Wild Flora Farm is the owner of this property and is also the holder of the qualifying 47 farmer exemption and therefore it meets the statutory standard, As far as it being used for agritourism, Paragraph 2 (a) 48 clearly addresses wedding, meals as being agritourism activities, He requested that this board affirm Michael Harvey's 49 determination that Wild Flora Farm, LLC, Kara Brewer, The Barn of Chapel Hill, however you want to frame it, meets 50 the statutory requirements and is therefore exempt from the UDO and other zoning regulations of Orange County. I Approved January 14, 2019 1 2 Karen Barrows invited questions from the board. 3 4 Randy Herman said he has a question to ask for both attorneys and invited Andy Petesch to answer first because he 5 was already standing. Randy Herman said it relates to the fact that we have on appeal a decision of the planning staff 6 which you have said was probably not correct at the time because at the time Southeast Property Group, LLC, and Wild 7 Flora Farm, LLC, were not the same entity, but because of the merger, Andy Petesch would now submit is correct 8 because the facts have changed, so is the board supposed to be reviewing the facts as they were presented to Michael 9 Harvey at the time or reviewing the facts as they exist today. 10 11 Andy Petesch answered that with respect to the first part of that and what was the status when SPG still was a record 12 owner of the property, he would submit that this is a brand new statute that has not been interpreted in the courts and 13 so the question about whether single member LLCs with unity of ownership satisfy the statute, that is still an open 14 question, 15 16 Randy Herman said that aside. 17 18 Andy Petesch said to get to the real part of your question, the issue is what was the question presented to Michael 19 Harvey and you assess that same question with the evidence before you. Because if we were just limited to the 20 evidence he had at the time he made the decision, we could have skipped a lot of this. But now you have additional 21 evidence, And Andy Petesch added that shortly after that merger was completed, he submitted a supplement to 22 Michael Harvey so that the current planning supervisor had that information with respect to the ownership of the 23 property by Wild Flora Farm vis-a-vis the merger. 24 25 Randy Herman said to LeAnn Brown let's assume hypothetically that the certificate was issued to Wild Flora Farm, LLC, 26 at the time that the property was owned by Southeast Property Group, LLC, but since then they have merged and are 27 the same entity. What effect does this have on the appeal if we assume that facts were incorrect at the time but they 28 are correct today? 29 30 LeAnn Brown said that she does not think the Board of Adjustment review power over a staff member is to take an 31 appeal that was filed in 2017, allow someone to do something in 2018 and say, 'Oh, never mind. We just didn't get to 32 you before the facts changed.'We are deciding based on what the facts were when Michael Harvey made the decision 33 in 2017. She also reminded the board that the profit-and-loss document is from 2016 when Wild Flora Farm, LLC, did 34 not exist. So, the argument that it is really Wild Flora Farm, LLC, cannot possibly be correct. It is her position that 35 whatever has happened subsequently, Kara Brewer would have to go back through the process and do this correctly. If 36 Kara Brewer went to the Department of Revenue, applied in the property entity, showed income in that entity's name for 37 the period that she needed it and brought that back to Grange County, perhaps there would be a different set of facts. 38 But you can't fix this for her. She didn't do this right. The county can't fix it for her and I don't think the Board of 39 Adjustment can either, LeAnn Brown said. 40 41 Barry Katz said so on September 21,2017, Kara Brewer filed an application that included the 2016 taxes? 42 I 43 LeAnn Brown answered it includes a profit-and-loss statement from 2016. 44 45 Barry Katz said and what she has here identifies herself as Kara Brewer with an LLC. But in fact in 2016 she was not 46 that entity, Is that what you are arguing? 47 48 LeAnn Brown said in 2016, Wild Flora Farm, LLC, did not exist, And it wasn't a DBA for Southeast Property Group, 49 LLC, because that assumed name was not filed until afterward,And no one is arguing that it is because that's not its tax Approved January 14, 2019 1 ID number. So, yes, LeAnn Brown said, it's her contention that it is impossible for an entity that does not exist to earn 2 income the year before it exists. 3 4 Susan Halkiotis said there is not a signature or a date of when this was filed. Usually there is a signature on the 5 Schedule F. 6 7 LeAnn Brown said she is looking at it just as the board is and it was attached to Kara Brewer's application so she does 8 not know when it was filed. i 9 10 Susan Halkiotis asked if it was an amended return. 11 E 12 Andy Petesch said he does not know the nature of the return. What was requested on the subpoena request was the 13 document submitted to the Department of Revenue with respect to the qualifying farmer exemption. This was part of the F 14 exemption application. 15 16 Susan Halkiotis said just because the profit-and-loss statement is for 2016 doesn't mean that it was filed by April 15, 17 2017, 18 i 19 Andy Petesch said all he could say is he does not have more information about that but what he would submit is that 20 the Department of Revenue would be able to look and see whether a filing had been made and it was that department's 21 determination that the filing was compliant. 22 23 Andy Petesch said he would like to respond to the contention that Wild Flora Farm did not exist in 2016 and somehow 24 makes this void. He submitted Forth Carolina Department of Revenue Directive CD02-1 states that a single-member 25 LLC that is not classified as a corporation is a disregarded entity from its single owner. So, the fact by 2017 when Wild ' 26 Flora Farm, LLC, did exist and tax returns were filed, and the application was made, there is no distinction between 3 27 Wild Flora Farm and Kara Brewer from a state or federal tax standpoint. 28 f 29 Susan Halkiotis said there is a distinction for the application. For the application that was produced for the exemption f 30 certificate number, there is clearly a distinction, They are asking for the farm's income and not Kara Brewer's income. 31 32 LeAnn Brown said she would like to object to the document, which does not relate to the farm exemption at all. The 33 document that Andy Petesch just handed the board. She wanted to object to the board receiving it,for the record. 34 35 Karen Barrows said so we shan't. 36 37 Susan Halkiotis said she thinks Andy Petesch has said that the employer I❑ that ends in 804 is the same on all 38 documents, 39 40 Andy Petesch said that's correct, 41 42 Barry Katz asked if Kara Brewer had an employer identification number in 2015. 43 44 Andy Petesch answered it was issued in 2017. Andy Petesch said the revenue is listed as farm revenue, Whether it 45 was Kara Brewer at the time, because it's a disregarded entity, this is a question outside this board's purview. He 46 believes the question before this board is who was the qualifying farm tax exemption certificate issued to. And the card 47 itself says Kara Brewer and Wild Flora Farm. He believes the documents make clear that the entity that the Department 48 of Revenue issued it to is Wild Flora Farm, LLC, vis-a-vis an employer identification number. 49 { 50 Barry Katz checked that Andy Petesch did not think that res jurisdicta and collateral estoppel apply. Approved January 14, 2019 1 2 Andy Petesch agreed that was his argument, 3 4 Randy Herman asked LeAnn Brown if hypothetically the tax exemption was clearly issued to Wild Flora Farm, LLC, and 5 it read that way and then LeAnn Brown was able to show the board that Wild Flora Farm, LLC, did not actually have 6 any income to qualify for the certificate, in that case does LeAnn Brown believe that under the statute this board could 7 disregard the certificate? 8 9 LeAnn Brown answered that is an interesting question with this brand new statute and she should note James Bryan's 10 observation earlier was a good one that the statute, inartFully written as it is, appears to give the county the ability to 11 look at things. Otherwise, who is making the determination whether or not it is a farm activity if not the county? LeAnn 12 Brown does think the board is allowed to look at what the statutes say and the statute says the certificate has to be 13 issued to the owner of the property. We know it wasn't.When Michael Harvey made his decision, it was not yet merged. 14 The board is also to look at 105 and 105 states that a qualifying farmer has income from farming operations for the 15 preceding tax year of$10,000 or more. And we know the entity didn't exist. She thinks the board can look at that. If the 16 board gives the Department of Revenue the benefit of the doubt, whether or not Kara Brewer amended her return, it is 17 impossible for Wild Flora Farm, LLC,to earn income in a year in which it did not exist. She thinks that is not the entity to 18 whom the Department of Revenue issued the certificate and that is why it is written the way it is, because that entity did 19 not exist in 2016 to have generated income. In answer to the deeper question Randy Herman is asking whether the 20 board can look at whether the Department of Revenue erred in issuing a certificate, she said she does not know that 21 she knows the answer to that but the Board of Adjustment has pretty broad power to enforce the UDO. But in this case, 22 she doesn't think the board has to worry about it because the board knows that the entity did not have income in 2016 23 so the board knows that the Department of Revenue did not issue the entity a certificate. It must be to Kara Brewer 24 individually, ❑BA Wild Flora Farm. 25 26 Barry Katz said starting with this process in 2015, the board was under the impression that this was a qualified farm 27 because there were forests on it and whatnot. The whole time there was the impression that this was a qualified farm, 28 but is obtaining the exemption certificate what documents it as a qualified farm? 29 i 30 LeAnn Brown answered no, the statute still contains the factors it had before with the exception of one of the factors j 31 she relied on earlier which was the farm number. One of the positive changes in the statute, from LeAnn Brown's 32 perspective, is that it removed the requirement of the farm number. The other factors are still there. The forestry plan is 33 still there, although you have in your evidence that the forest isn't still there. This is a separate thing, This is something 34 that bootstraps a building on very special facts. l 35 36 Susan Halkiotis said she would like to point out, especially for Randy Herman's benefit, that beginning in 2015, the 37 board had questions all along about the determination that we were starting with a farm and this was an agritourism 38 activity. So, in fact tonight's meeting probably is no different in character from our first meeting in 2015 in that so much 39 circuitous information was presented at the time. Susan Halklotis acknowledged that Andy Petesch was not present at 40 that time, but even going back nearly three years ago, this board had a lot of questions and skepticism about what was 41 being presented to qualify this property as a farm.And so, how that relates to tonight is that this is deja vu, 42 43 Barry Katz said he can recall Kara Brewer's testimony as she characterized the farming activities at the public hearing 44 for the Special Use Permit. She had two young children who were in grade school. She would pick them up after school 45 and take them out there to transplant seedlings. That was her farm. She had these beds of flowers and she was going 46 to transplant flowers. And then came the chestnut trees when she got advice that she needed to have something that 47 looked like a farm. The chestnut trees and the bees and all that came later. 48 49 James Bryan asked to speak. He said he would like to clarify whether the board can consider new evidence. James 50 Bryan said it is clear that the board can. He referred to a handout he has given the board from the School of I I Approved January 14, 2019 1 Government that says in other cases the board may need to consider additional evidence to make a decision. He said 2 it's important to remember that a board review of the board's decision is different from Michael Harvey's review of his 3 decision. It's a review of his determination so it's just a fact of whether something is or is not. Michael Harvey 4 determined that it is certified as something. Whether he had any rationale or reasoning is meaningless. He could have 5 written only that this was his final and binding determination that X. The board, however, is held to a different standard. 6 The board has to have findings of fact and conclusions for it. What's before this board is everything that is competent, 7 material, substantial evidence. 8 9 James Bryan said regarding res judicata and collateral estoppel, there are two things to consider. One is if the board is 10 truly concerned and not persuaded by his advice, the board can continue the hearing and tell the attorneys to brief this 11 for the board. They mentioned a lot of cases and didn't provide the cases. The board can continue this if it wants to d❑ 12 so but James Bryan said this is a new matter; 2(a) did not exist. There are issues that have been decided. There is a 13 previous order with a finding of fact that this is a bona fide farm. So, the board cannot come back and say it's not. But 14 that is irrelevant to this discussion. All that is relevant to the discussion is the rule. Who owns the property? Do they 15 hold a tax exemption certificate from the Department of Revenue? And is the structure used for agritourism? That's all 16 that matters. 17 18 James Bryan said regarding this new law, one other case has gone up to the Court of Appeals, Jeffries v, Hamett 19 County, They had sort of the mirror image of this.That one was a gun range and the board had to look at it. The statute 20 mentions weddings but doesn't mention hunting. The court decided that most hunting is not agritourism but went on to 21 say that the property owner could go on to apply for a Conditional Use Permit. James Bryan said it is not exactly on 22 point,the property owner went for the agritourism exemption first instead of the Conditional Use Permit. But the court is 23 saying, 'You didn't get this one. You are free to go for another permit.' 24 25 Randy Herman asked James Bryan, regarding the issue of looking behind the certificate, if the board thinks a certificate 26 was supposed to be issued for Wild Flora Farm, LLC, and the board thinks that Wild Flora Farm, LLC, didn't have 27 income sufficient to gain the certificate and therefore the issuance of the certificate was wrong, can we look behind it or 28 do we have to say, `No, the certificate was issued and that's the end of it."? 29 30 James Bryan answered the board is held to the exact words of the statute and to their plain meaning. What the statute 31 says is the holder of the certificate—not someone who has the attributes of someone who would qualify. He said it's not 32 shown in the photocopy very well but the letter from the Department of Revenue, there's an actual card for it. He said 33 he thinks it would be an absurd reading to say it is somebody who literally holds the card so you could pass it around 34 the table. But he thinks it says that. If you want to read something into it, there has to be some reason. There has to be 35 some statutory construction that you say, 'Oh, this is probably what they meant.' And he does not think the board has 36 heard anything about that. He doesn't think it's ambiguous. He thinks the plain meaning is intended. If it's ambiguous, 37 you have to resolve it with statutory construction and if there is any ambiguity left, you have to resolve it in favor of the 38 property owner for the free use of land. The courts have been very clear for a long time. It is very settled that anything 39 done through the zoning, Chapter 153 A, Article 18 is a derogation of property rights and has to be narrowly construed 40 in favor of the property owner. So, if there's a question, that's where the tie to the runner goes, One side has to win and 41 it's the free use of property. 42 43 Barry Katz asked for clarification that the board does not get to consider res judicata and collateral estoppel, 44 45 James Bryan answered res judicata would be if this was before the board again, So, if someone applies for a kennel 46 and the board denies a kennel and then the same person comes for a kennel that would be res judicata. He does not 47 see how it applies in this matter--2(a)did not exist. 48 49 Barry Katz said James Bryan mentioned that if it's like a tie, the privilege goes to the property owner, But the board's 50 issue here is whether there is any real continuity. Isn't that so? i 's s Approved January 14, 2019 1 2 James Bryan said the Board of Adjustment needs to show where in the General Statutes it states that there has to be 3 continuity. 4 5 Barry Katz said to James Bryan that Bryan had just said that the statute doesn't mean that you can just have this card 6 and pass around this card. If Kara Brewer was the one that actually owned this property and the LLC was formed 7 sometime after, and it's not clear that Kara Brewer is or was at that time the LLC, then how can the board give any 8 advantage to a property owner? 9 10 James Bryan said he thinks what Barry Katz is implying is that the Department of Revenue made a mistake. That the 11 certificate on its face when it says Wild Flora Farm doesn't mean Wild Flora Farm or shouldn't have stated Wild Flora 12 Farm. That it was either a clerical error or a mistake on their part or maybe fraud was committed on them. Whatever it 13 is, James Bryan doesn't think the statute clearly indicates that the board can consider that. He thinks the board has to 14 read the statute as: `A person who holds a qualifying farmer sales tax exemption certificate from the Department of 15 Revenue,' 16 17 Barry Katz checked that the board is also to consider whether Michael Harvey erred. 18 19 James Bryan answered no, but rather the determination was right or wrong, 20 21 Barry Katz asked whether the board is to make any judgment on whether the determination was right or wrong. 22 j 23 James Bryan answered yes, the board is to determine whether the structure located on the property is classified as a 24 bona fide farm purpose under the new section of statute. 25 26 Karen Barrows asked if it was time to close the public hearing. 27 28 LeAnn Brown said that she was not sure she had requested that Exhibits 3, 4 and 5 (the petition, the writ, and the 29 dismissal) be moved into evidence. 30 31 MOTION by Randy Herman to move those exhibits into evidence. Barry Katz seconded. 32 VOTE; UNANIMOUS 33 34 LeAnn Brown said she needed to put an objection in the record, in case this case goes elsewhere, to the last bit of 35 information and argument that the board received from James Bryan. The information included in evidence indicates 36 that the county attorney's office advised Michael Harvey as to the opinion the board is now reviewing and when the 37 county attorney's office starts making argument with regard to the case, it's a violation of her clients' due process rights 38 and potentially Andy Petesch's. 39 1 40 Andy Petesch requested that the board make a motion to accept all the documents he handed up into evidence. There 41 were Exhibits 6-8 and a 9 that LeAnn Brown had objected to. Andy Petesch said he did not see any reason to not enter 42 it into evidence as well, 43 44 MOTION by Barry Katz to move those exhibits into evidence. Susan Halkiotis seconded. 45 VOTE: UNANIMOUS 46 47 Susan Halkiotis asked James Bryan, regarding facts, on the slide James Bryan had put up earlier, there were three 48 requirements for facts: competent, material, substantial. In order for evidence to be competent, James Bryan had 49 indicated that it needed to be trustworthy. If members of this board were to find any of this evidence not to be 50 trustworthy based on our own questions about, for instance, how that certificate was obtained, or the name on the I Approved January 14, 2019 1 certificate, etc., etc., can we do that? Can we question the trustworthiness of the evidence and therefore the 2 competence of the evidence? 3 4 James Bryan said that is nuanced. The trustworthiness speaks to a piece of evidence for what it is proffered to be. For 5 instance, if you were to have an affidavit from somebody and you don't know whether that's their true statement, 6 whether it's notarized and things like that speak to the trustworthiness of the affidavit. The actual substance of it, that's 7 not the competency that they're talking about with the rules of evidence. For instance, if you were to have a case that j 8 dealt with traffic, if you had an engineer's sealed report that it would increase traffic tenfold, then you would have a j 9 competency issue with the trustworthiness of it if he wasn't an engineer. If he gave the same report and you just didn't 1 10 believe him, saying that he was only out there one day and it was a Saturday, not a Monday, that's a very poor report 11 and I just can't trust your conclusions, that's different. That goes to whether there is substantial evidence of something 12 being there. 13 14 Susan Halkiotis said then she has questions about the substantial qualifications for this evidence, I guess. 15 16 Karen Barrows said I think we can still close the public hearing and still speak with James Bryan. She asked if that is 17 correct. 18 19 James Bryan answered that she was correct. 20 21 Karen Barrows called for a motion to close the public hearing. 22 23 LOTION by Randy Herman to close the public hearing. Barry Katz seconded. 24 VOTE. UNANIMOUS 25 j 26 Randy Herman said not having been here for any of the previous iterations of this case, as James Bryan stated there 27 are only three issues that the board has to determine: whether a tax certificate was issued, whether the person who 28 owned the property was the holder of the certificate, and whether the structure is used for agritourism. There is a pretty f 29 clear definition of agritourism in the statute. And he does not think that anyone is seriously contending that it does not 30 meet that definition and no one is really questioning whether the tax certificate was issued so really the only question 31 that remains is whether the person who owns the property is the same person who holds the certificate, And then the 32 board has to look at specifically what does the certificate say and what does the application for the certificate say. And 33 it's interesting because it is pretty clear that if you just look at the certificate it does not say LLC, it just says Wild Flora 34 Farm, which is not necessarily the same thing. But if you go back and look at the application that was submitted, it 35 clearly shows a federal employer identification number, that it is an LLC is clearly checked, but on the other hand if you 36 look under No. 3, it says the applicant's legal name is Kara Brewer. It doesn't say Wild Flora Farm, LLC. So, the 37 application kind of goes both ways and it isn't clear from the application who actually is applying. And there's evidence 38 that could support either conclusion in there, so he doesn't know. 39 40 Barry Katz asked Randy Herman to reiterate the three items for consideration,which he did. 41 42 Barry Katz said there has been argument that the entity in 2016 was not the same entity as what's on the document in 43 2017. That's a problem. 44 45 Randy Herman said there are two different ways you can look at that. You can say the certificate was issued in error 46 and shouldn't have been issued because maybe the information provided on the return was inaccurate or was 47 fraudulent or something and he doesn't think the board can consider that kind of argument because once the certificate 48 is issued, the board has to take it at face value. But, he does think it goes toward the question of who was the intended 49 holder of the certificate; was it Kara Brewer or was it the LLC. And if the fact is that the LLC did not have any income for Approved January 14, 2019 1 the period for which the certificate was issued, then he thinks that it tends to support the conclusion that the Department 2 of Revenue did not intend to issue the certificate to the LLC but to Kara Brewer personally, 3 4 Barry Katz asked what would the consequence of that be. 5 6 Randy Herman said if the certificate was issued Kara Brewer and she is the holder of the certificate, she is not the 7 property owner and so in that case the building would not qualify under the statute. So, really the question is. Who is 8 the holder of the certificate, which was issued in two different names and one of which was maybe supposed to say 9 LLC but doesn't say LLC and based on the application which has two names, one of which is the name of the LLC 10 without the LLC written?The board is trying to guess at what the Department of Revenue intended when it issued this. 11 12 Barry Katz said I don't think the department thought that much about it. 13 14 Randy Herman said that's part of the problem. And if you look at the certificate, I think it is pretty clear that all the 15 Department of Revenue did was copy what was written on the application. 16 17 Barry Katz said it seems that Kara Brewer was the owner and the LLC was formed later. 18 19 Randy Herman said Southeast Property Group, LLC, was the owner of the property at the time. It has since merged. 20 So, if the board is taking the facts as of today, the LLCs are the same thing but Kara Brewer as an individual is not. It 21 clearly indicates on the application that it is for an LLC but the name under applicant is not an LLC. 22 23 Barry Katz asked Randy Herman for his opinion on when the LLCs existed. 24 25 Randy Herman answered Southeast Property Group, LLC, existed earlier and Wild Flora Farm, LLC, was created in 26 early 2017. So, it existed at the time that the certificate was filed but maybe didn't have the income. 27 28 Barry Katz asked Randy Herman that it is his opinion that this is the only thing to consider and not the arguments that 29 were made considering res judicata and collateral estoppel but he does not think they are correct because the issue 30 before the board is different from what was presented in the earlier case. 31 32 Barry Katz said one of the arguments before the board is that the board has made decisions in the past on this case 33 and the property owner hasn't appealed those decisions in a timely manner. That should have ended it. 34 35 Randy Herman said the decision that was made earlier was that the property did not qualify for a Special Use Permit, 36 And they are not arguing now that they do qualify for a Special Use Permit. They are arguing that they don't need a 37 Special Use Permit because they are exempt from zoning. 38 39 Barry Katz said we have heard this over and over again. 40 41 Randy Herman said that the board has been told, although he hasn't looked through the documents to verify, that the 42 Board of Adjustment at some point earlier made the determination that there was bona fide farm use on the property. 43 44 Barry Katz said he does not think the board did. 45 46 Susan Halkiotis said if the board did, it was only with opposition because this has always been the point of contention 47 with this property. 48 49 Karen Barrows said she wasn't sure the board was contesting that farm activities were going on but... 50 i Approved January 14, 2019 1 Susan Halkiotis said they were added later. 2 3 Karen Barrows said right,they were incidental to the barn. 4 5 Randy Herman said the question has to be at the time that Michael Harvey reviewed whether the property was exempt 5 from zoning, was the property exempt from zoning based on the laws that existed at that time. 7 8 Susan Halkiotis said the question tonight is with regard to Michael Harvey's determination in October 2017, 9 10 Randy Herman agreed. 11 12 Susan Halkiotis said her feeling about this is Michael Harvey made a determination based on evidence that was 13 presented to him which in his role with the Planning Department he can't question. He was looking at a certificate and 14 the new statute and he made a determination. But the appeal is based on these questions about what was presented, 15 about the validity of the certificate to begin with. If the three questions are that the board has to find positively for the j 18 questions of agritourism, who owns the property, and is the owner of the property actually who the certificate is issued 17 to, she can't say that for sure. She can't vote or affirm in any way that those last two items are true. She can't say that 18 the person who owns the property is the same entity to whom the certificate was issued because of the questions that 19 have been raised. So, she wouldn't be able to find positively for all three of those questions. She is open to someone 20 arguing a different point with her. 21 22 Barry Katz agreed with Susan Halkiotis. 23 24 Karen Barrows said she thinks she is persuaded to agree with Susan Halkiotis. She had thought at the outset that this 25 was going to be clear and easy but of course it isn't. It is ambiguous. 25 27 Barry Katz asked for someone to succinctly define the ambiguity. 28 29 Randy Herman said the ambiguity is that in order to support the determination of staff, the board would have to find that 30 the owner of the property was also the holder of the certificate. And the way that the name is reported on the certificate 31 and the way the name is reported on the application, it is not clear that the person who holds the certificate is the same 32 person who is the owner of the property. 33 I 34 Susan Halkiotis asked James Bryan whether the board has to make three motions, noting that on James Bryan's slide, 35 there were motions regarding the findings of fact, conclusions, and affirming/reversing/modifying staff determination. 35 37 James Bryan recommended that the board make three separate motions. 38 39 Randy Herman said the board can make each of the findings of fact motions separately. 40 41 Susan Halkiotis checked with James Bryan that the question still comes under the substantial qualification because she 42 is figuring out how to word the findings of fact. 43 44 Randy Herman said he doesn't think it does, He does not think that there is any question of whether the certificate is 45 valid. He does not think there is question of whether the certificate is substantial, It is what it is. But it concerns him still 45 a little bit because he thinks all the other indicators on the application indicate that it was supposed to be an application 47 for an LLC and the wrong name was put in on Line 3 and if Kara Brewer had put the name of the LLC on Line 3 then 48 there would be no question. So, basically the board is saying that she does not quality because she made a small error 49 in her paperwork.That may be the right decision but it is concerning to him to look at it that way, he said. 50 i Approved January 14,2019 I 1 Barry Katz said isn't there an issue that if the LLC didn't exist in 2016 and they have to file a financial statement for 2 2016 that the statement is not pertinent to the LLC. 3 4 Randy Herman said maybe it is and maybe it isn't but he is not sure that it's a determination that the board can make. 5 Even if the application was based on a totally fraudulent tax return and the parties could appear before us and prove 6 without a doubt that it was a fraudulent tax return, he thinks if the certificate was issued the board has to rely on that 7 because that's what the statute says. So, he doesn't think the board can say the certificate should not have been 8 issued. The only question is who was the certificate issued to and is that the same entity as the party who owns the 9 property. 10 11 Susan Halkiotis asked how the first motion should be worded. 12 13 Randy Herman suggested starting with the ones that are not controversial. 14 15 Karen Barrows suggested starting with the finding that the structure is used for agritourism. 16 17 MOTION by Randy Herman to find as fact that the property is being used for agritourism as that term is defined in the 18 statute. There was no second. 19 20 James Bryan said that is more of a conclusion. He suggested .a template that includes citing the evidence or what was 21 presented. 22 23 Randy Herman said neither parties have disputed that weddings are taking place on the property. Prior minutes could 24 be relied upon. 25 26 James Bryan said pages 26 to 41 of the agenda abstract were entered into evidence. 27 28 Randy Herman said he would include pages 19-22 also, which includes the building permit. i 29 30 Barry Katz said he does not think that the board has ever challenged the farm plan summary but like a business plan, 31 what actually happens is very different from what a business plan says. 32 33 Barry Katz said he would not accept this as a fact at all. It is not a fact. It is hypothetical. He said he has done too many I 34 business plans to believe one. 35 36 James Bryan said this is a very good point of what is substantial evidence. The board can refer to the minutes of the 37 prior hearings, which was entered as an exhibit. He said the board does not have to be very specific, 38 39 Barry Katz said the proposal was made last year and he doesn't remember anyone challenging it but the farm plan 40 wasn't the focus. He noted that originally Kara Brewer said she was going to plant flowers with her children. And then 41 she moved on to this because she got better advice. 42 43 Susan Halkiotis said she agrees with Barry Katz. 44 45 Andy Petesch and LeAnn Brown conferred with James Bryan. 46 47 Karen Barrows said that the board would like to continue to make motions. 48 49 James Bryan said the attorneys had been working out how to make it easier for the board to make a motion and the 50 board could reopen the public hearing to hear evidence if that would help. Approved January 14, 2019 1 2 MOTION by Randy Herman to find as a matter of fact that the evidence presented on pages 19-22 and pages 26-41 and 3 also the evidence presented in the minutes contained in Exhibit 3 the board finds the property is being used for 4 agritourism as the term is defined in the statute.There was no second. 5 6 Barry Katz said he does not believe the farm plan summary, adding that it's an aspirational document and not a 7 substantive document. 8 9 Randy Herman said the board has 100 pages of minutes concerning the activities that were taking place on the 10 property and the statute defines agritourism to include weddings so he doesn't think there is any question that weddings 11 are taking place on the property. 12 13 Barry Katz said fine,weddings are taking place on the property. 14 15 Susan Halkiotis asked Randy Herman to amend the motion to not include the farm plan summary. 16 Barry Katz said he would prefer to just say Kara Brewer is holding weddings there. 17 18 Randy Herman said the board has to point to a specific piece of evidence that supports that finding and that would be 19 the previous minutes. 20 21 Karen Barrows suggested only using pages 19-22 as evidence. 22 23 Barry Katz said that would be fine. 24 25 Randy Herman said a building permit is also aspirational and not what is actually taking place. 26 27 Barry Katz agreed and said he would be fine with including pages 19-25. 28 29 Susan Halkiotis suggested the evidence include the minutes of previous meetings where it was not contested that 30 weddings are taking place on the property rather than the building permit and the plans. 31 32 MOTION by Randy Herman to find that based on the evidence previously presented in the minutes from the October 10, 33 2016, and October 24, 2016, meetings, which the board has accepted into evidence as Exhibit 3, that there is 34 agritourism activity taking place on the property as that term is defined in the statute. Barry Katz seconded. 35 DISCUSSION: Susan Halkiotis said she would vote for it but strictly on the wording, 'agritourism as defined by the new 36 statute.' Barry Katz added that in the board hearings the board heard testimony but the board never accepted that this 37 was a real agricultural entity that used agritourism as a way to supplement the income of a farmer, What we were 38 experiencing was an attempt to have an events center placed in an agricultural environment where the events center 39 was a business entity and it was not in fact adjunct or supplemental to an agricultural entity, Barry Katz said. Rather, it 40 was the primary purpose if not the sole purpose of citing it where it was. 41 VOTE: UNANIMOUS 42 43 MOTION by Randy Herman to find as a matter of fact that based on the deed which was included on pages 78-80 of the 44 documents and also the Articles of Merger on pages 85-86 the property is currently owned by Wild Flora Farm, LLC. 45 DISCUSSION: Susan Halklotis said she was thinking about it. Barry Katz asked for Randy Herman to be clearer because 46 Southeast Property Group, LLC, was the purchaser. Randy Herman said the purchaser was Southeast Property Group, 47 LLC, and then Southeast Property Group, LLC, merged with Wild Flora Farm, LLC, with Wild Flora Farm, LLC, being 48 the surviving entity. So, as of today, the owner of the property is Wild Flora Farm, LLC. Susan Halkiotis noted that was 49 as of February 14, 2018. Randy Herman agreed. 50 SECONDED by Susan Halkiotis. 1 Approved January 14, 2019 1 VOTE: UNANIMOUS 2 3 Barry Katz said he does not know how to phrase the next finding of fact,which is the most consequential. 4 5 James Bryan said if this were to be appealed to Superior Court, the court is going to look at it and the board has to tell 6 the court very explicitly here why the board decided one way or the other. The board needs to point to documents that j 7 persuaded them to decide.The court will look at that and review whether that was arbitrary or capricious. 8 i 9 Susan Halkiotis asked Randy Herman to make the motion. I 10 11 MOTION by Randy Herman moved to find as a matter of fact, based on evidence presented in the qualifying farmer 12 exemption certificate on Page 13 and also the application for that certificate which is found on pages 71-73, that Wild 13 Flora Farm, LLC, is not the holder for a qualifying farmer exemption certificate issued by the Department of Revenue. 14 Barry Katz seconded. 15 VOTE: UNANIMOUS 16 17 MOTION by Randy Herman moved to conclude as a matter of law that the structure located on the property is being used 18 for agritourism purposes as that term is defined in the statute. Susan Halkiotis seconded. 19 DISCUSSION: Barry Katz said there is an issue of continuity--if it is being used for agritourism purposes, then the entity 20 that is running it is not the same entity that does not have the tax certificate. Randy Herman said that's a separate 21 conclusion, 22 VOTE: UNANIMOUS 23 24 Karen Barrows said the next conclusion is with regards to who owns the property. Susan Halkiotis said she still doesn't 25 know who owns the property, Randy Herman said the board made a finding of fact that Wild Flora Farm, LLC, owns the 26 property so he does not mind making that motion. Barry Katz said the board can agree to that 27 28 MOTION by Randy Herman moved to conclude as a matter of law that the property is owned by Wild Flora Farm, LLC. 29 Barry Katz seconded. 30 VOTE: UNANIMOUS 31 32 Susan Halkiotis reminded the board that the last conclusion is with regards to whether the property owner holds the 33 certificate. 34 35 MOTION by Randy Herman to conclude as a matter of law that the owner of the property, Wild Flora Farm, LLC, is not a 36 holder of a qualifying farmer exemption certificate issued by the Department of Revenue. Susan Halkiotis seconded, 37 VOTE: UNANIMOUS 38 39 Susan Halkiotis asked to make a fourth conclusion that the property did not meet the statutory requirements for the 40 issuance of the decision made on October 13, 2017. 41 42 MOTION by Randy Herman to reverse the final and binding determination of staff as set forth in the letter dated October 43 13, 2017, that the property is a bona find farm purpose as set forth in the statutes. Barry Katz seconded. 44 DISCUSSION: Karen Barrows clarified with Randy Herman that the motion is that it's not a bona fide farm or that the 45 exemption certificate was the issue. Randy Herman said he was saying that the exemption certificate was presented to 46 support the conclusion that it was a bona fide farm and because the property owner is not the same as the holder of the 47 certificate, that certificate cannot support that conclusion. 48 VOTE: UNANIMOUS 49 3 Approved January 14, 2019 1 Barry Katz said it is still not clear to him whether there is any relevance to the argument related to res judicata and 2 collateral estoppel. Can the hoard make a motion to keep that issue open to he discussed at some later date at some 3 other venue. 4 5 Randy Herman said if the hoard has already determined that the determination of staff was in error, then that argument 5 is moot. Barry Katz said OK, l 8 9 AGENDA ITEM 6: ADJOURNMENT 10 11 MOTION by Barry Katz to adjourn at 10 p.m. Susan Halkiotis seconded. 12 VOTE: UNANIMOUS 13 14 aA441i"iLZ2"'Llel 15 NAME OF VICE-CHAIR