City council issues 9-month moratorium on CUPs

Thursday, July 29, 2021
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If you’re hoping to get a conditional use permit (CUP) for tourist lodging in a residential area, you’ll be waiting for a while.

On Monday night, the Eureka Springs City Council approved a nine-month moratorium on CUP applications for R-2 and R-3 zones.

The council first heard from residents who live in a subdivision where another resident has allegedly been operating illegal tourist lodging. Ferguson Stewart said the neighborhood was quiet when he moved in 2012.

“I’ve lost my quiet neighborhood,” Stewart said. “It’s now a runway. There shouldn’t be any tourist lodging in our area, but we have something going on.”

Steve Beacham asked the council to protect residential neighborhoods from commercial encroachment. Beacham said a resident who owns a home on Huckleberry Lane was denied a CUP for tourist lodging but continued to move forward with advertising the property as a short-term rental.

“They were sent a letter, I think, by our code enforcement officer,” Beacham said. “As far as we know, nothing has happened.”

Laura Covington said she’s in favor of a six-month moratorium on tourist lodging in her neighborhood.

“I’m totally against Airbnbs and I’m against what’s happened on 120 Oak Ridge,” Covington said.

Hitchhikers and other transient individuals have been staying at that address, Covington said, causing neighbors to fear for their safety. One neighbor even installed a security camera, Covington said.

“This has already gotten way out of hand and I’m hoping you will support the moratorium,” Covington said. “I hope you will support us and the neighbors and know that another neighbor on Cedar Lane may put their home up for sale just because of this problem.”

Joe Hill, who lives on Huckleberry Lane, said he supports the six-month moratorium on overnight rentals.

“I’m very familiar with the one on Huckleberry where I live because the folks there made sure they introduced themselves to all the neighbors, and it was going to be a vacation home and eventually a retirement home,” Hill said. “Please help us. I love living in that neighborhood.”

The first item of new business, the moratorium was introduced by council member Melissa Greene, who also sits on the planning commission. Mayor Butch Berry read a recommendation from the planning commission to put a six-month moratorium on tourist lodging in R-2 and R-3 zones and the commission then heard from planning commission chairwoman, Ann Tandy-Sallee.

Tandy-Sallee said the commission was working on a study on tourist lodging, and that’s when the situation with short-term rentals came to light. Tourist lodging hasn’t been allowed in R-1 zones since 2001, Tandy-Sallee said.

“That doesn’t mean we don’t have illegal tourist lodging, which we are addressing, but we do need to do some research,” Tandy-Sallee said. “Some of the things the research does show is Airbnb does have an impact on housing prices and rents. The impact is stronger in areas with fewer owner occupiers, such as vacation destination towns.”

Tandy-Sallee said Airbnb contributes to an increase in the supply of short-term rentals while decreasing the long-term supply of rentals.

“Over the next six months or less, the planning commission could do a good study and come back and make a recommendation on what we think the city needs to do,” Tandy-Sallee said.

Greene said she spoke with city preservation officer Kylee Hevrdejs, who said there’s an issue with people who have put contracts on houses with the intention of applying for a CUP. Greene said those people should have the opportunity to apply for a CUP.

“When they put the contract on the house, they had a legal right to apply for a CUP,” Greene said.

Tandy-Sallee said she’s never seen anyone come to the planning commission for a CUP after a house has closed.

“They come before they close,” Tandy-Sallee said. “It is as a condition.”

Hevrdejs said she received correspondence from at least five realtors or prospective buyers last week asking “very specific questions about what is allowed in R-2 or R-3.”

“I did tell them the moratorium is on the table and I advised them to complete the CUP application as quickly as possible,” Hevrdejs said. “Several of the realtors did express to me this was a concern for them and their client entering into these contracts.”

“I think it would be safe to allow them to midnight tonight,” Greene said. “If they have a signed contract, they can apply.”

“I think it would be fair to allow that, but it’s kind of a case-by-case basis,” Hevrdejs said.

“It’s not really what I want, but I don’t want any more lawsuits,” Greene said.

Council member Terry McClung said the council was only setting a deadline.

“We’re not guaranteeing they’re going to get approved or not,” McClung said. “That goes to the planning commission.”

Council member Autumn Slane asked if the homeowners would still have to go through the process of applying for a CUP and Greene said they would.

“What I’m hearing is if they have a contract tonight to purchase a house, then they can put in their application,” Berry said. “They may not get it. It may be denied, but they can still put out their application.”

Council member Laura Jo Smole proposed a nine-month moratorium and said setting a deadline for the moratorium does not mean things will go back to the way they used to be.

“Hopefully, the planning commission will have a good ordinance for us to look at with final decisions on how we’re going to handle tourist lodging in those areas,” Smole said. “There’s a lot of ways it could go.”

McClung asked if properties that are operating tourist lodging under a CUP will be grandfathered in if they are sold to someone new.

“Yes, that was in the original motion by planning,” Greene said.

Greene then moved to establish a nine-month moratorium on tourist lodging or boarding houses in R-2 and R-3 zones, allowing CUPs to transfer and those who have real estate contracts prior to midnight July 26 to apply for a CUP. The council voted unanimously to approve the motion.

Earlier in the meeting, Berry said it was time to vote to re-appoint Jeff Carter to Position 1 on the City Advertising and Promotion Commission. Greene immediately moved to re-appoint Carter to the commission, and council member Bill Ott moved to table the issue because of the “flux situation with the CAPC with the lawsuits and police investigations and the forensic audit of the website.”

“Mr. Ott, we don’t need you to — you just made the motion,” Berry interrupted.

“I move we table it for those reasons, sir,” Ott said.

The council then voted on Ott’s motion, with McClung, Slane and Ott voting in favor of the motion and Smole, Greene and Harry Meyer voting against it. In the absence of a majority, Berry declined to vote.

“So the motion fails,” Berry said.

The commission returned to Greene’s motion to re-appoint Carter, and Greene said she was “really angry” about the situation.

“Yes, there is a lawsuit, but we who are being sued, like any court of law, are innocent until proven otherwise,” Greene said.

Greene said Carter has been “vilified unjustly.”

“I keep hearing things and I say to people, ‘Where’s your documentation? Show me something,’ ” Greene said. “Not one piece of documentation has ever come up. To me, I’m very friendly with [Carter] and his wife. We’re not social friends.”

“Are we not raising hands anymore?” Slane interrupted. “I feel like this should be an open discussion. This is crazy. This is crazy.”

“Autumn, I have the floor, please,” Greene said. “You guys can do what you want, but it really, really, to me, stinks.”

Smole said the CAPC has business to do, with or without a lawsuit.

“Business needs to carry on as normal, so we can continue the growth we’re having and continue to advertise the city, and we need all seven positions filled,” Smole said.

Ott said Carter could remain on the commission until someone is appointed to his position.

“It’s not that we’re not going to have a leadership. Mr. Carter will stay on the commission, will stay on as chairman, but the situation is … that’s the reason I asked to table it, so we could get through all that,” Ott said. “So all those unanswered questions, all those innuendos, would die down.”

Slane said she believes Carter has done an “amazing job” but she’d like to know more before reappointing him to the commission.

“I would like to see a few more things other than just spending money,” Slane said. “I think [Carter] is very new to the town, maybe hasn’t seen all the issues and problems as a little bit more of the long-timers have.”

Slane said there are issues with parking and infrastructure that should have been taken care of “instead of getting more people here when we’re already trying to just provide jobs.”

“People aren’t even coming to work, you guys,” Slane said. “We may not even have a town before this is done.”

Meyer said he didn’t understand what people coming to town has to do with Carter.

“People are saying, ‘We like the guy. He’s doing a great job, but …’ and holding up because a lawsuit is going on,” Meyer said. “That might go on for another six months. No, let’s vote on this. He’s done a good job. The commission has decided that he’s the one we want.”

Meyer continued, “This is … just a rubber stamp and you can’t micromanage the CAPC. This is an independent commission.”

Ott said Carter wouldn’t lose his leadership on the commission if the item is deferred.

“I’m just disappointed we didn’t hold off until everything was settled,” Ott said.

“Well, anybody can file a lawsuit,” Greene said. “Maybe we’ll file one next.”

Greene said Carter is not the leader of the commission. The chairman runs the meetings, Greene said, but the commission makes all decisions together.

McClung called for a vote and the council voted 3-2-1 to re-appoint Carter to the commission. Greene, Meyer and Smole voted yes, Slane and McClung voted no and Ott abstained. Berry voted yes to create a majority.

Also at the meeting, the council approved an ordinance establishing Juneteenth as a city-wide holiday on second and third readings by title only and approved the planning commission’s changes to the bed and breakfast definition.

The council’s next regular meeting is scheduled for 6 p.m. Monday, Aug. 9, at The Auditorium.

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