News

TALL TALE: Battle over nine-story condo featured '3 amigos,' lender named Trump

The Skyland Hotel and First Citizens Bank remain the tallest buildings downtown. After the proposed Sunflower high-rise in 2006, city voters enacted a 64-foot building height cap.

By Bill Moss, Published: April 2, 2019

Thirteen years ago, a proposed high-rise project sparked a citizen uprising that ultimately defeated the luxury condo plan and capped building heights downtown. Protagonists included ardent preservationists, pro-development forces, ‘the three amigos’ and a financier by the name of Donald Trump.

A native of Hendersonville, Jeff Collis recalls his first council meeting after his swearing in. Mayor Greg Newman, who was also newly elected, gaveled the meeting to order at 6:05 p.m. Newman adjourned it more than six hours later, at 20 minutes after midnight.

In between, the council had for the first time found out just how strongly people felt about a proposed high-rise condo development on First Avenue East, less than a block from the Historic Courthouse.
“Thinking back on this, I don’t know that we’ve seen one issue in this town that people were that passionate about,” Collis said in an interview. “From the beginning, I was so passionate about the Courthouse dome. Everywhere you drive around town, you see the dome. Every day I’m coming across the high bridge by Duke Power and I see it.”
In fact, when the high-rise was a hot topic, the Historic Courthouse had itself survived a threat. Decaying in plain sight on Main Street, the vacant historic building had been the subject of an extended debate, passionate in its own right. Should it be restored and used for public meetings, or should it be bulldozed for parking? Preservation won, as it usually does in Historic Hendersonville. The Historic Courthouse would reopen two years later after an extensive renovation.
Thirteen years later, the Hendersonville City Council is entertaining the idea of a major new building downtown, but in a far different light. The mayor and all four council members strongly favor the newest proposal, a six-story hotel on Church Street at Fourth Avenue. One other thing the council agrees on: the hotel will be no taller than 64 feet.

Three new council members

Collis recalls Newman, then an attorney in private practice, running an energetic campaign for mayor in the fall of 2005. With the retirement of Fred Niehoff, the seat was open for the first time since 1993. Although a Miami developer had filed plans for a big downtown condo project, the proposal was not widely talked about in the campaign.
“I can remember we had the mayor’s election going on at that time,” Collis said. “They had already discussed (the project). Fred Niehoff was revved up about that project before the election. Him and Ron Stephens were all talking about how beautiful the building was.”
Greater Hendersonville had seen nothing like this since the Fleetwood. Nine stories tall, the Sunflower would cover almost an entire city block and bring 70 luxury condos to downtown. Niehoff had endorsed the project before he left office and others hailed it as the catalyst for a residential boom to complement shops and dining in the central business district.
When the council convened on Dec. 14, 2005, the three newcomers — Newman, Collis and Bill O’Cain — joined Jon Laughter and Barbara Volk. They looked out at a room overflowing with people eager to talk about the proposed Sunflower condos. Ed Hernando, 39 years old, handsome and self-confident, extolled the virtues of the plan. The project, on property owned by Stuart Rubin, a Miami investor who owns many downtown parcels, would include a parking garage, ground-floor retail space and a rooftop garden. Architect Frank Kelsch produced surveys illustrating that the Skyland Hotel and First Citizens Bank were also taller than the 64-foot height limit, which had been imposed about 18 years earlier.
Boyd Massagee, an attorney who represented Rubin, told the council that the Sunflower is “the biggest potential boom that he has seen for this little town since he has been an adult here,” according to minutes of the meeting. If the council brushed aside this opportunity, Massagee asked, “How many years is it going to be before someone else is willing to come in and buy the old potato packing house and fix it up to this level?”
But the Hernando team would meet its match when the opponents reached the microphone. Although he had tried to stay neutral, Collis could hardly take two steps without encountering a defender of the status quo.
“It was just unbelievable, the passion of people,” he said. “It seemed like I was having coffee with people constantly, lobbying about the project. It was apparent that nobody wanted that height. A lot of people didn’t want it at all. I think looking back on it, if we had looked outside the central business district, it wouldn’t have been an issue.”
The council tabled Hernando’s request after that long winter’s night and took it up again on Feb. 9. During that meeting Councilman Laughter asked Hernando if he was a Florida developer. Hernando said no. Laughter asked if he’s ever heard of another project proposed by a Florida developer — the Fleetwood Hotel on top of Laurel Park, which failed in the 1920s. Laughter asked facetiously if Hernando “had anything to do with the Fleetwood Hotel,” according to minutes. “Mr. Hernando responded no and he doesn’t know if that is a good thing or bad thing.”
Erica Allison, who was then acting chair of the Planning Board, told the council that the Planning Board had struggled with the Sunflower permit. Though it had recommended approval in a 4-3 vote, the advisory committee was desperate for guidance from the elected leaders. The city should consider a zoning code amendment based on “thoughtful discussion, debate and inclusion by a wide variety of people,” Allison said, which she said had occurred when the council adopted the 64-foot maximum. Downtown property owners Jim Hall, Virginia Gambill, E.K. Morley and Burt Browning all spoke against the project, saying it was out-of-scale and would dwarf the Historic Courthouse. Hall produced a map showing 17 other sites downtown where the Sunflower could be built. Although the council turned down the development on a 2-2 vote, Collis recalled that Hernando did not give up. He invited the council member to the Lake Osceola Inn, which he had restored and rebranded as the Copper Crest.
“He’s dressed nicely and then maybe 15 minutes after I got there his wife drives up and the kids are there and they’re all dressed in like Easter dresses and everything,” he said. “Oh, yeah, ‘Here’s my wife, I’d like you to meet her.’ That was the most staged thing that I think I’d ever been in.”
A probation officer, Collis found himself on the receiving end of Hernando’s explanation of some kind of financial problem.
“He spent more time talking about his relationship with some sheriff’s department folks, explaining this — I don’t know if he had some bad checks — I had no clue what he was even talking about,” he said. “I guess he thought because I was in the criminal justice system here that that was why so I was so anti the thing.”
Four years later, Hernando filed for bankruptcy, listing $13,000 in assets against $4.5 million worth of debt.

‘The three amigos’

Steve Caraker had first become interested in the city Historic Preservation Commission not because he thought a historic district was a good idea. Although owned an 85-year-old home in the West Side Historic District, Caraker feared that the historic commission would exert too much power over homeowners. Hearing his concerns, the council appointed him to the board in 2001.
“Shortly after that, I criticized the leadership of that body and they said if you’re so critical why don’t you take over,” he said. As chairman of the historic commission, a resident of the historic district and do-it-yourself home remodeler, Caraker began to hear a lot about the Sunflower.
“The conversation’s in the neighborhood and it’s also back channel,” he said. Mary Jo Padgett, like Caraker, lives on Third Avenue West.
“She walks and one day she stopped me and she says, ‘You are the chairman of the Historic Preservation Commission. This is your issue to speak to.’”
Because of his day job as a county building inspector, Caraker was reluctant to take a position publicly against a developer and the City Council.
“When the newspaper asked me, in July (of 2006), I said I don’t think it’s the right thing to do,” he said. “It has the possibility of changing the atmosphere for Hendersonville forever.”
He also thought the majority of the council — “the three amigos” — was unfairly biased.
“I felt very strongly that the mayor, who was an attorney, another councilman that was a civil engineer and another councilman who was an architect had an inherent conflict of interest even addressing this issue,” he said. “I’m not not saying they did anything wrong but public perception … I had a gut feeling, right wrong or indifferent, that these three individuals probably should have let this go and given it to another body.”
The City Council had not mustered the votes to approve the Sunflower because O’Cain, who had worked on the project, had recused himself. But at the same time, the council, with the support of Newman and Laughter, wanted to raise the building height maximum to 80 feet, a half block off Main Street. The change would apply to Hernando’s project, by then rebranded as the Carolina Grand. In August, the council voted 3-2 for the higher cap, with O’Cain joining Newman and Laughter.
Years later, Newman stands by his view at the time that the high-rise condo would have benefited downtown.
“It concerned me that so many people that don’t live in the city were so vocal about it,” he said. “These projects that are enhancing tax value allows you to pay for things. The other thing is it brought more residential living into the center of town. I thought that was good for the business community and that it would have driven some other types of businesses that would have sought a location in town. I felt the positive benefit of allowing these structures would have outweighed any negative.”
Caraker, taking Padgett’s advice, had become one of the more quotable figures in town. A Wall Street Journal reporter who wrote about the Trump involvement asked him what made folks in Hendersonville so adamant.
“This is a small town but it’s not a little hick Southern town,” he said. “Our base of population is retirees, most of the college educated and financially successful. They are not dummies and they are not going to get steamrolled.”
A few days after he spoke publicly against the project, Caraker got a call from Sen. Tom Apodaca.
“He said, ‘Steve, do you feel strongly about this?’ I said, ‘Yessir, I do.’ He says we can’t just stop it because that’s not the process. He said, ‘If we put it on a referendum vote, what does it do?’ I said, ‘Tom, given the fact that when, like me, people move into this town they buy into it emotionally. It’s a small town feel, it’s a hometown feel. I said I think it goes 60-40 to keep this height” at 64 feet.
Up to that time, Apodaca had never seen an issue as contentious.
“In my political career the hottest issue was the Duke Power (transmission line proposal), the second was definitely the building height,” he said. “People were fired up and I definitely understand why. Can you imagine if that was just coming on the market at that time (before the 2008 real estate crash)? It would have been right at the beginning at the downturn.”
Apodaca, with encouragement from dozens, if not hundreds, of constituents, decided he had to act.
“I stayed in touch with Carolyn Justus because we felt the same way,” he said. “Hendersonville didn’t need 90-foot, 100-foot buildings. Everywhere we went, we heard it. A few Realtors wrote me letters saying they’d never vote for me again.” Developers griped, too. Downtown landowner Harley Stepp accosted him about a move to undercut local control.
“Lisa and I were walking down the street, and he comes up and says, ‘That’s the most overreach of government I’ve ever seen in my entire life.’ I said, ‘Harley, I know you’ve worse than that. You’ve been involved in worse than that.’”

‘Fighting for the right cause’

Caraker’s prediction was right. Voters endorsed the building height cap by 68 to 32 percent. It remains the law in downtown Hendersonville between Washington and Grove streets.
Volk, who along with Collis had steadfastly opposed the Sunflower, joined three other council members in voting for a resolution condemning the Legislature’s action.
“They were going to do whatever they could to see that this would never happen again,” she said. “I still had a problem with the state Legislature interfering with local activities. I didn’t want to see the Sunflower but I didn’t think it should be up to the state Legislature to tell us.”
The Sunflower fight launched Caraker’s career in elective office.
“What happened I won the issue, I was prideful of that, that I was right and I had read public opinion correctly and I was fighting for the right cause, so then my appointment to the Historic Preservation Commission came up.” The three amigos refused to reappoint him. “That made me angry.”
In 2007, he won a seat on the City Council.
The council and some business leaders criticized Apodaca for what they regarded as a radical remedy — forcing a city referendum on a zoning question. The former senator says today that the high-rise condo was not right for his adopted hometown.
“I would say people moved here for a reason and I don’t think it was for skyscrapers,” he said. “I think the reason was for a nice Main Street that we’re still enjoying and is still very popular. I said I don’t think that’s why people moved here. This will not fit in the area. It just wasn’t needed, and from a political standpoint, from what I was hearing, I knew it was going to be 75-80 percent were going to be against it. I thought the referendum was the way to go.”