Mills River Council Deadlocks 2-2, Sinking 88-Townhome Rezoning
Town Council • Mills RiverOctober 8, 2026
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A proposed 88-townhome development off Banner Farm Road failed Oct. 8, 2026, after the Mills River Town Council split 2-2 on every motion, with Mayor Pro Tem Jeff Moore recused. In the same session, the council backed bond financing to move the Landings of Mills River senior housing to nonprofit ownership. It also endorsed 35-foot residential height limits for the town's new development code, just as the mayor reported a threatened legal challenge to the code.
- R26-02 rezoning fails after approval, reasonableness and inconsistency motions each tie 2-2.
- Workforce housing offer fell short: 8 of 88 units at 80% to 100% AMI for 10 years.
- Uniform 35-foot residential heights and new industrial design rules head to the Oct. 22 UDO draft.
- Reported realtors' challenge to UDO height limits prompts a closed session with the town attorney.
- Resolution 2026-32 passes: Town forgoes about $8,800 a year to support nonprofit senior housing.
A Tie That Blocks: R26-02 Stalls Without a Majority
The basics: Ordinance 2026-24 would have conditionally rezoned parcels near Banner Farm Road and Presbyterian Church Road for 88 townhomes proposed by Orange Capital. In a conditional rezoning, the developer agrees to binding site-specific conditions in exchange for the new zoning. The legislative hearing reconvened after a recess on Aug. 13, 2026.
Why it matters: The roughly 96-minute hearing was the longest item of the night. Its failure means the existing zoning stays in place. The town attorney warned the council to document its findings carefully because litigation is possible.
Where things stand: Alexander, attorney for Orange Capital, responded to concerns council raised in August. He said the developer could not reach 80% of area median income without a hard financial hit. Instead, it narrowed an earlier 120% ceiling to 80% to 100% AMI for 10% of units over 10 years. A councilmember confirmed that equals 8 of 88 units.
The applicant also offered buffering and a shifted trail for neighbor Sam Bryson, construction-period access for the Wright family, a Schoolhouse Road/NC 280 turn-lane widening, and a Banner Farm Road sidewalk with room for a bike lane. It also offered a possible covered school bus stop if requested.
Traffic was the central evidentiary fight. David Worth Heider, senior technical advisor with JMT Engineering and Planning, testified as an expert. He said NCDOT required the traffic study because of the rezoning, not because of trip volume, and estimated about 620 daily trips. He projected 55% would exit toward Presbyterian Church Road and 45% toward Banner Farm Road.
"There were no changes in the level of service, and there were no meaningful changes in delay," said Heider.
Town Manager Matthew McKirahan added that the Banner Farm Road speed limit is now 35 mph by council direction.
The other side: Julie Shotner, a Wedgewood resident, opposed packing the site with development. She asked the council to protect the nearby church and cemetery and to require tree buffers. "I think Presbyterian is too tiny to be racing people..." she said. One councilmember called the project good but in the wrong location.
Alexander countered that the record contains no evidence to support a denial. "Is it dense? Yes, it's as dense as your ordinance allows, but your ordinance does allow this density," he said.
Decisions and stakeholder impacts: The approval motion failed (For: 2, Against: 2, Recused: 1, Moore). Individual votes were not specified. Mayor Shanon Gonce said he would rather see housing than a warehouse on the site. "I don't know that my whole term as mayor, and even going back in time, we've ever been deadlocked," said Gonce.
The town attorney advised that case law favors conditions over denial. "If there's any concerns that you have that could be addressed by a condition, you ought to consider adding a condition as opposed to an outright denial," the Town Attorney said. Gonce then moved a statement of reasonableness, and Councilmember Brian Kimball moved a finding that the project is inconsistent with the 2040 Comprehensive Plan. Both failed 2-2.
"If we can't get a majority on anything, it is the status quo," said the Town Attorney, who concluded the ordinance did not pass as presented. The outcome leaves the developer without approval, neighbors with the current zoning, and the town with no majority finding on plan consistency.
What's next: No follow-up action was scheduled.
Height Limits Reset as the UDO Nears a Vote
Why it matters: The revisions reverse an earlier 26-foot residential height limit in the Unified Development Ordinance (UDO), the town's consolidated zoning and land-use rulebook. They also add design rules for large industrial buildings ahead of the Oct. 22 adoption vote.
Where things stand: Chad Meadows, the town's UDO consultant, outlined about seven changes. Residential districts get a uniform 35-foot height limit, and references to number of stories are removed. The MXU district was reclassified as residential to avoid consent requirements under state downzoning legislation.
Planning Director Michael Malecek said a survey of the area found "there was no community that had a height restriction below 35 feet." He added that the only height decrease is 5 feet for nonresidential buildings in mixed-use districts.
Industrial buildings over 35 feet would face four standards:
- Facade width limited to 25% of lot width within the first 200 feet
- A 10-foot step back
- Base, middle and top articulation
- Streetscape canopy trees doubled from three to six per 100 feet
Ferncliff Park Drive is exempt.
The other side: Gonce raised building length and warned against restrictions that could deter a future employer that proves valuable to the community decades from now. Council also debated Broad Point and the flexibility of conditional zoning.
Decisions and stakeholder impacts: Council reached consensus to include the changes in the Oct. 22 draft. Existing property owners are protected. "This UDO does not impact any existing development in any way, shape, or form," said Meadows. Staff said expansions can seek adjustments, variances or conditional rezoning.
Litigation shadow: Gonce said he got a call from someone he described as an officer of the North Carolina board of realtors. "He said that they was planning on challenging as soon as we passed the UDO on these heights being restricted," Gonce said. Meadows said he carries errors and omissions insurance and that courts now have less discretion over damages. "The threat of litigation shouldn't be part of your consideration on adopting or not adopting a UDO," said the Town Attorney. Council voted without opposition to enter closed session under G.S. 143-318.11(a)(3). No report from that session was available.
What's next: The UDO adoption vote is set for Oct. 22.
Landings Senior Housing Moves Toward Nonprofit Ownership
Why it matters: Resolution 2026-32 supports Public Finance Authority bonds that let Piedmont Affordable Senior Housing Foundation acquire Landings of Mills River. The deal moves the property out of a real estate investment trust (REIT) structure and toward long-term affordability for about 63 to 66 senior residents.
Where things stand: McKirahan said federal rules require local support for the bond financing. He estimated the town will lose just under $8,900 a year in property tax. Tax Collector Kristen Rintoul said the loss would hit beginning with the Jan. 1, 2027 tax rolls, or fiscal year 2028, and could shift if nonprofit paperwork is delayed.
"One of the requirements was that the current operators stay in place, all the current residents, all the current staff remain at the building," said Nick Wilson, applicant representative for Piedmont Affordable Senior Housing Foundation.
Gonce asked the operators to prioritize Henderson County and Mills River residents, acknowledging it could not be written into the deal. The operators said they already do.
Decisions and stakeholder impacts: Two public commenters backed the change. Jim Foster, a public commenter, cited better care at nonprofit facilities and said the lost taxes are worth it. An elder-law practitioner identified as Bill, a public commenter, praised the facility, saying "they are providing an invaluable service to this community." Council adopted the resolution by voice vote, with no opposition heard.
Minor Items
- Consent agenda: Approved by voice vote, including setting a November hearing on R26-03, a conventional rezoning at 598 Miles View Drive.
- Annexation: Council accepted a certificate of sufficiency and adopted Resolution 2026-31, setting Nov. 12 hearings on the annexation and its zoning assignment.
- Board ethics: Resolutions 2026-36 and 2026-37 extend an ethics code and rules of procedure to all town boards and advisory committees. "Right now there are no rules," said Rintoul.
- Storm readiness: McKirahan said 1 to 3 inches of rain could force a North Loop closure and urged sign-ups for Rave Alert and Henderson County alerts.
- Community survey and public comment: Residents who missed the ETC Institute survey can request a replacement. Todd Wagner, a public commenter, said the survey ignores business owners and claimed the town "wasted over $200,000" on the UDO.
Looking Ahead
The UDO adoption vote is set for Oct. 22, and the manager also previewed a coming fee schedule hearing. The Nov. 12 agenda is slated to include the annexation and zoning hearings, a Henderson County tax presentation, an audit presentation and Ordinance 2026-04.