IN THE SUPREME COURT OF NORTH CAROLINA

No. 434PA18

Filed 3 April 2020

PHG ASHEVILLE, LLC, Petitioner

v.

CITY OF ASHEVILLE, Respondent

On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision 

of the Court of Appeals, 822 S.E.2d 79 (N.C. Ct. App. 2018), affirming an order 

entered on 2 November 2017 by Judge William H. Coward in Superior Court, 

Buncombe County. Heard in the Supreme Court on 6 January 2020.

Fox Rothschild LLP, by Kip D. Nelson and Thomas E. Terrell, Jr., for 

petitioner-appellee.

Poyner Spruill LLP, by Andrew H. Erteschik, Chad W. Essick, Nicolas E. Tosco,

Colin R. McGrath, and N. Cosmo Zinkow, for respondent-appellant.

ERVIN, Justice.

The question before us in this case is whether the City of Asheville properly 

denied an application for the issuance of a conditional use permit submitted by PHG 

Asheville, LLC, seeking authorization to construct a hotel in downtown Asheville. 

The trial court and the Court of Appeals both held that the City had improperly 

concluded that PHG had failed to present competent, material, and substantial 

evidence tending to show that the proposed hotel satisfied the standards for the 

issuance of a conditional use permit set out in the City’s unified development 
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ordinance. In seeking relief before this Court, the City argues that the Court of 

Appeals ignored this Court’s precedents concerning the manner in which applications 

for the issuance of conditional use permits should be evaluated, incorrectly applied 

the applicable standard of review, and erroneously disregarded the City’s findings of 

fact. After carefully reviewing the record, briefs, and arguments of the parties, we 

conclude that PHG presented competent, material, and substantial evidence that the 

proposed hotel satisfied the relevant conditional use permit standards set out in the 

City’s unified development ordinance and that the record did not contain any 

competent, material, and substantial evidence tending to establish that the proposed 

development failed to satisfy the applicable ordinance standards. Therefore, the City 

lacked the authority to deny the requested conditional use permit. As a result, we 

affirm the Court of Appeals’ decision.

On 27 July 2016, PHG submitted a conditional use permit application to the 

City’s planning department in which it requested authorization to construct an eightstory, 185-room, 178,412 square-foot hotel and an adjoining structure containing 200 

parking spaces on a tract of real property located at 192 Haywood Street. The 2.05-

acre tract upon which the proposed hotel was to be located was contained in the 

Patton/River Gateway portion of the “Central Business District,” which is outside the 

“Traditional Downtown Core.” According to the Downtown Master Plan that the City 

had adopted in March 2009, the Patton/River Gateway area “should . . . accommodate 
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significant residential and extended-stay hotel development,” with “some [of this 

development to occur] in taller buildings.”

As a result of the size of the proposed development and its presence in the 

Downtown Design Review Overlay portion of the Central Business District, section 

7-5-9.1 of the City’s unified development ordinance required PHG to undertake a 

Level III site plan review of the project. The Level III site plan review process 

required the holding of a pre-application conference involving area representatives; 

staff review of the application; and review by the Technical Review Committee, the 

Downtown Commission, and the Planning and Zoning Commission prior to final 

review by the Asheville City Council. The Technical Review Committee and the 

Downtown Commission each recommended approval of the project subject to 

variances to be approved by the Planning and Zoning Commission and the making of 

certain modifications to the project by PHG. The Planning and Zoning Commission 

granted two variances relating to the project that modified the proposed lot frontage 

and the height of the street wall before unanimously recommending approval of the 

conditional use permit to the City Council.

On 24 January 2017, PHG’s application for a conditional use permit came 

before the Asheville City Council for a quasi-judicial public hearing. According to 

Section 7-16-2 of the City’s unified development ordinance:

(c) Conditional use standards. The Asheville City Council 

shall not approve the conditional use application and site 

plan unless and until it makes the following findings, based 
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on the evidence and testimony received at the public 

hearing or otherwise appearing in the record of the case:

(1) That the proposed use or development of the land 

will not materially endanger the public health or 

safety;

(2) That the proposed use or development of the land is 

reasonably compatible with significant natural and 

topographic features on the site and within the 

immediate vicinity of the site given the proposed site 

design and any mitigation techniques or measures 

proposed by the applicant; 

(3) That the proposed use or development of the land 

will not substantially injure the value of adjoining or 

abutting property; 

(4) That the proposed use or development of the land 

will be in harmony with the scale, bulk, coverage, 

density, and character of the area or neighborhood 

in which it is located; 

(5) That the proposed use or development of the land 

will generally conform with the comprehensive plan, 

smart growth policies, sustainable economic 

development strategic plan, and other official plans 

adopted by the city; 

(6) That the proposed use is appropriately located with 

respect to transportation facilities, water supply, 

fire and police protection, waste disposal, and 

similar facilities; and

(7) That the proposed use will not cause undue traffic 

congestion or create a traffic hazard.

At the hearing before the City Council, PHG presented the testimony of three expert 

witnesses, including Tommy Crozier, a licensed real estate appraiser with over fifteen 
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years’ experience in conducting property appraisals, and Kevin Dean, a registered 

professional engineer.

In his testimony, Mr. Crozier addressed the third standard set out in the City’s 

ordinance, which required consideration of whether the proposed hotel would 

significantly injure the value of adjoining or abutting properties. Mr. Crozier testified 

that three properties adjoined the tract upon which the proposed hotel would be 

located, including an apartment building, a church, and a multi-center office building. 

According to Mr. Crozier, “the three adjoining properties are valued for tax purposes 

under $3 million,” while the construction of the hotel would cost about $25 million. 

Mr. Crozier described the situation at issue in this case as a textbook example of the 

principle of progression, in which “lower valued properties are enhanced by the value 

of higher value[d] properties.” On the basis of his examination of recent land sale 

transactions in the vicinity of the proposed hotel, Mr. Crozier opined that “values 

have increased substantially over the last few years” as a result of the construction 

of other hotels in the area. As a result, Mr. Crozier concluded that “[t]he proposed 

subject hotel will not impair the value of adjoining or abutting property” and “should 

meaningfully enhance the values of surrounding properties.”

At the conclusion of Mr. Crozier’s testimony, Vice Mayor Gwen Wisler asked 

Mr. Crozier whether he had considered comparable sales data involving transactions 

in other cities in which two hotels had been located within a quarter mile from a new 

hotel. After acknowledging that he had not included data of that nature in his report, 
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Mr. Crozier stated that “there is so much demand for new hotel rooms in the market 

that [this new hotel] will not impact the value negatively of any of the hotels around 

here” in light of the fact that downtown hotel occupancy in Asheville is around 80 to 

85 percent even though occupancy rates in an efficient market at equilibrium would 

be approximately 65 percent. For example, Mr. Crozier testified that, following the 

opening of the Hyatt Place in downtown Asheville, the business of the adjoining Hotel 

Indigo had increased by about ten percent.

In his testimony, Mr. Dean addressed the issue of whether construction and 

operation of the proposed hotel would result in any undue traffic congestion or create 

a traffic hazard. Mr. Dean testified that he had consulted with the City’s traffic 

engineer, who had informed him that he only needed to provide a trip generation 

table and the anticipated distribution of those trips in order to satisfy the relevant 

ordinance requirement. Based upon the industry standards applicable to traffic 

studies, Mr. Dean determined that new traffic at nearby intersections resulting from 

the construction and operation of the proposed hotel would represent less than five 

percent of the total traffic that passed through that intersection and would only 

increase the overall traffic delay at nearby intersections by approximately four 

seconds. In order to make these determinations, Mr. Dean testified that he had

“collected peak hour traffic counts on November 10th of [2016]” and “performed a trip 

generation for the site based on [the] Institute of Transportation Engineer[s’] data” 

and information generated by appropriate software. As a result, Mr. Dean concluded 
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that “the proposed use will not cause undue traffic congestion or create a traffic 

hazard.”

At the conclusion of Mr. Dean’s testimony on direct examination, Councilman

Cecil Bothwell asked Mr. Dean why he had based his analysis upon conditions 

experienced on November 10th, which was a Thursday, rather than conditions in the 

summer or in September or October, when Asheville experiences higher touristrelated traffic levels. In response, Mr. Dean testified that “traffic [studies] are only 

supposed to be counted between Tuesdays and Thursdays to get a typical weekday 

condition that’s not affected by a Monday or Friday variation,” that the use of this 

approach is “industry standard,” and that traffic engineers are generally required to 

only conduct traffic assessments on Tuesdays through Thursdays. In addition, 

Councilman Bothwell questioned Mr. Dean about the queuing that already occurs at 

intersections near the hotel and whether the new entrance to the hotel would 

exacerbate existing conditions. After acknowledging that he could not argue with the 

Councilman Bothwell’s “anecdotal stories,” Mr. Dean stated that “the amount of 

traffic that’s going to be added is only supposed to be [a] negligible increase to any 

[queues] that you would see” and will not “cause any undue additional issues.”

Vice Mayor Wisler asked further questions about the time of day upon which 

Mr. Dean’s study focused, about whether Mr. Dean had taken the times at which 

people check into and out of a hotel into account, and whether Mr. Dean had studied 

conditions in the summer, during which the City experienced its highest levels of 
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traffic. In response, Mr. Dean stated that he had collected the data upon which his 

study was based on “a typical weekday in November” by measuring traffic from 7:00 

a.m. to 9:00 a.m. and from 4:00 p.m. to 6:00 p.m., periods which “generally represent[ 

] the peak hour” of the streets that were at issue in his study. At that point, Vice

Mayor Wisler asked whether Mr. Dean had taken Mr. Crozier’s appraisal, which 

mentioned certain hotels and apartments that were either planned to be built or had 

just been added, into account in conducting his study. Mr. Dean replied by stating 

that he had not considered the information to which Vice Mayor Wisler alluded and 

that he had, instead, examined the impact of the proposed hotel upon existing traffic 

conditions. In addition, Mr. Dean stated that, if there is a higher amount of traffic 

near the hotel originating from sources other than the hotel itself than was 

contemplated in his study, the traffic resulting from the construction and operation 

of the hotel would constitute a smaller percentage of the overall traffic and have a 

smaller percentage impact upon overall traffic conditions.

Three members of the public spoke in favor of the approval of the conditional 

use permit. Another member of the public asked a procedural question without 

supporting or opposing the issuance of the permit. Charles Rawls, a native of 

Asheville and resident of the nearby Montford community, expressed uncertainty 

concerning whether he opposed the project and posed certain questions about trafficrelated issues. With respect to the extent to which traffic would be entering and 

exiting the proposed parking deck onto North French Broad Road, Mr. Rawls 
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commented that, “heading south on French Broad, there is a hill there that is a blind 

hill” that might create an issue for persons who lacked familiarity with the area. In 

addition, Mr. Rawls asked “how much of the traffic coming and going to that parking 

garage would be happening at peak hours so that it might affect the safety of the 

public” and whether Mr. Dean had observed the angle and sight limitations relating 

to that hill. In response, Mr. Dean stated that he had not seen that hill and that “[w]e 

did not conduct a sight distance check, which is typically what’s required.” According 

to Mr. Dean, the North Carolina Department of Transportation “typically requires 

driveways to meet certain sight distance requirements” and that he had not 

conducted the “check” in question because his firm had not been involved in designing 

the site. No one presented any evidence in opposition to the approval of the proposed 

conditional use permit.

After Mayor Esther Manheimer closed the evidentiary hearing, Vice Mayor 

Wisler immediately moved that PHG’s conditional use permit application be denied 

on the grounds that the applicant had failed to meet the first, second, third, fourth, 

fifth, and seventh standards set out in the City’s unified development ordinance and

Councilman Keith Young seconded the motion. At that point, Councilman Bothwell 

expressed agreement with the assertion that PHG had failed to satisfy the trafficrelated standard and thanked Mr. Rawls for “discover[ing] the lack of the sight 

distance examination.” At that point, the City Council voted unanimously to deny 

the conditional use permit application.
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On 14 February 2017, the City entered a written order that contained fortyfour findings of fact in support of its decision to deny the issuance of the requested 

conditional use permit on the basis of its failure to satisfy six of the seven standards 

set out in the City’s unified development ordinance. Among other things, the City 

Council found as a fact that:

18. An appraiser, Tommy Crozier, testified on 

behalf of the Applicant and presented an “Expert Report,” 

which purported to show that CUP Standard 3 was met, 

i.e., that the development of the Hotel would “not 

substantially injure the value of adjoining or abutting 

property.” However, Mr. Crozier’s testimony and the 

Expert Report do not contain facts and data sufficient to 

prove that there would not be a substantial adverse impact 

on such values following construction of the Hotel.

19. Mr. Crozier’s testimony and the Expert 

Report state generally, and the Council accepts as fact, that 

the values of property in this area of Asheville (northwest 

downtown) have been increasing in recent years, and that 

recent sales prices exceed the assessed tax values of 

properties in the area. There was, however, no evidence to 

establish the date of the tax appraisals or evidence that 

would indicate how these tax values would have any 

relevance to CUP Standard 3. There was no evidence, 

through facts and data, to indicate how the Hotel would 

affect or impact such an increase in value (assuming such 

an increase would continue) on the adjacent and adjoining 

properties.

20. There was no sales data presented and there 

are no comparable sales in the Expert Report, which 

provide information about the sale prices of properties 

adjacent to hotels in Asheville, or elsewhere, before and 

after a hotel was constructed on the tract in question. In 

fact, there was no data through, e.g., comparable sales, 

that could show the before and after value of properties 
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adjacent to any hotels in the City, even though the Expert 

Report indicates there have been multiple hotels 

constructed in the City in recent years, and at least two in 

the immediate area.

21. That property values are increasing in the 

area generally over time does not establish the impact of 

this Hotel on the adjoining and adjacent tracts, nor 

whether the value of those particular tracts would suffer 

an adverse impact if the Hotel is constructed.

22. There was no data or comparable sales to 

substantiate Mr. Crozier’s claim that the Hotel Indigo was 

in part, the reason for the recent increase in property 

values in this area of downtown Asheville, or to show such 

increases were higher or lower than in other parts of the 

City during the same time period.

23. There was no evidence or data that could 

show the impact on the value of adjacent properties, when 

the proposed Hotel would be the third hotel in a several 

block radius. It appears that additional hotels could 

increase the value of other nearby hotels, but no facts or 

data were provided that could establish that property with 

other uses would not be substantially diminished.

24. The Expert Report also contains the following 

statements, which brings the reliability of the Expert 

Report into question:

a. “The information contained in the 

Report or upon which the Report is based has 

been gathered from sources the Appraiser 

assumes to be reliable and accurate. The 

owner of the Property may have provided 

some of such information. Neither the 

Appraiser nor C&W [Cushman & Wakefield] 

shall be responsible for the accuracy or 

completeness of such information, including 

the correctness of estimates, opinions, 
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dimensions, sketches, exhibits and factual 

matters. . . . . [sic]”

b. “This report assumes that the subject 

will secure an affiliation with Embassy Suites 

or a similar chain. If the subject does not 

maintain a similar affiliation, it could have a 

negative impact on the subject’s market 

value.”

c. “Our financial analyses are based on 

estimates and assumptions which were 

developed in connection with this appraisal 

engagement. It is, however, inevitable that 

some assumptions will not materialize and 

that unanticipated events may occur which 

will cause actual achieved operating results to 

differ from the financial analyses contained in 

the report, and these difference[s] may be 

material. It should be further noted that we 

are not responsible for the effectiveness of 

future management and marketing efforts 

upon which the projected results contained in 

this report may depend.”

25. The CUP application does not request that 

the Hotel be only an Embassy Suites hotel or a “similar 

chain.”

26. The methodologies employed, and data 

provided, by the Applicant’s witness, Mr. Crozier, were 

inadequate to allow Council to find that the Hotel would 

not substantially injure the value of adjoining properties.

27. There is significant traffic in downtown 

Asheville near and around the Property in September ·and 

October, and in the summer months. The vehicular traffic 

in the area will increase if the Hotel is constructed.

28. The Applicant presented the testimony of a 

traffic engineer, Kevin Dean, as well as Mr. Dean’s written 
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“Traffic Assessment.” The Traffic Assessment did not 

provide any facts or data which could show the level of 

traffic or traffic counts for any time of the year, except 

during a four hour period during the day on November 10, 

2016, which was a Thursday. The level of traffic in this 

area is much higher at other times of the year, particularly 

the summer months; however, there were no traffic counts 

or any traffic data provided for any date other than 

November 10.

29. Mr. Dean was not aware of the environmental 

conditions on November 10, 2016, or whether such 

conditions could have affected traffic volumes on that date.

30. The Applicant’s traffic counts were done on 

November 10, 2016 between the hours of 7 a.m. and 9 a.m., 

and between the hours of 4 p.m. and 6 p.m. Under industry 

standards, this is apparently “assumed” to be the time of 

highest traffic on nearby streets, but there was no evidence 

which could establish this would be the case for this area 

of Asheville.

31. The number of trips generated from the Hotel 

in the Traffic Assessment was also derived from an 

industry standard, and not the actual trips expected from 

this Hotel at this location. Hotels in downtown Asheville 

have an occupancy rate in excess of 85%, but the general 

rate for an efficient market is 65%. The Traffic Assessment 

did not take this expected higher occupancy of the 

Asheville market into account.

32. The Applicant did not submit any traffic data 

for Friday through Sunday, even though those are typically 

the days that tourists visit the City and traffic volumes are 

higher.

33. The estimated traffic counts used for the 

Traffic Assessment and Mr. Dean’s opinion, were also these 

on a “typical weekday.” There was no weekend data 

collected, even though this is the time that most tourists 

visit the Asheville downtown.
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34. Without accurate traffic counts for any days 

other than Thursday November 10, there is no data or 

evidence to determine whether the additional trips 

generated by the Hotel (as well [as] those from the other 

tourists which the Hotel will attract but who do not stay at 

the hotel) would not decrease the existing level of service 

to an unacceptable level. The Level of Service Summary in 

the Traffic Assessment was not based on complete 

information or data.

35. There was no data or evidence presented that 

could show what the level of traffic would be with three 

hotels (Indigo, Hyatt and Embassy Suites) located within a 

several block area for Friday, Saturday and Sunday during 

the summer months or other high traffic periods.

36. The Traffic Assessment did not account for 

traffic that will be generated by future hotels and 

apartments in the downtown area that are planned and 

approved, but which are not yet fully constructed and 

operational.

37. The proposed Hotel includes a twenty-foot 

wide driveway, which provides street access to and from 

the parking structure and North French Broad Avenue.

38. There is a blind hill with limited visibility in 

the vicinity of the Hotel’s parking deck[ ] entrance and exit 

onto North French Broad Avenue. To determine whether 

the addition of that entrance/exit would cause a safety 

issue would require a “sight distance check.” A sight 

distance check was not a part of the Traffic Assessment and 

no other evidence was presented to show the parking deck 

entrance or exit would not endanger driver or pedestrian 

safety. The Traffic Assessment did no analysis relating to 

traffic safety as it relates to vehicles entering and exiting 

this driveway.
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Based upon these findings of fact, the City Council concluded that PHG had failed to 

produce competent, material, and substantial evidence that the hotel (1) “will not 

materially endanger the public health or safety;” (2) “is reasonably compatible with 

significant natural and topographic features of the site and within the immediate 

vicinity of the site given the proposed site design and any mitigation techniques or 

measures proposed by the applicant;” (3) “will not substantially injure the value of 

the adjoining or abutting property;” (4) “will be in harmony with the scale, bulk, 

coverage, density, and character of the area or neighborhood in which it is located 

and, moreover, the evidence instead showed the Hotel would not be in harmony with 

the scale, bulk, coverage and character of the area and neighborhood;” (5) “will 

generally conform to the comprehensive plan, smart growth policies, sustainable 

economic development strategic plan and other official plans adopted by the City and, 

moreover, the evidence instead showed the Hotel would not generally conform to the 

City’s 2036 Vision Plan;” and (6) “will not cause undue traffic congestion or create a 

traffic hazard.”

On 16 March 2017, PHG filed a petition seeking the issuance of a writ of 

certiorari pursuant to N.C.G.S. § 160A-393 authorizing judicial review of the City 

Council’s decision to deny its permit application in which PHG alleged that the City 

Council had (1) “erred as a matter of law by not accepting PHG’s evidence as 

competent, material, and substantial evidence entitling PHG to a permit;” (2) made 

findings of fact not supported by substantial evidence; and (3) made findings of fact 
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that were arbitrary and capricious.1 On the same day, the requested writ of certiorari 

was issued. The issues raised by PHG’s petition were heard before the trial court at 

the 2 October 2017 civil session of Superior Court, Buncombe County. On 2 

November 2017, the trial court entered an order determining that PHG was entitled 

to the issuance of the requested conditional use permit and ordered that this matter 

be “remanded to the City of Asheville City Council with the directive that it grant 

PHG’s application and issue it a Conditional Use Permit at its next regularly 

scheduled meeting.”

In support of this decision, the trial court concluded that, contrary to the City 

Council’s decision, the evidence submitted in support of PHG’s request for the 

issuance of a conditional use permit “was competent, material and substantial and 

sufficient to establish a prima facie case of entitlement to a conditional use permit” 

and that, “[i]n deciding otherwise, the Council [had] made an error of law.” In 

addition, the trial court concluded that “the [C]ity’s decision was not supported by 

substantial evidence appearing in the record” and was, instead, “arbitrary and 

capricious.” The trial court further determined that the testimony of Mr. Rawls 

concerning traffic safety-related issues was “incompetent as a matter of law” and that 

the City Council had failed to recognize that “PHG had only a burden of production,

 

1 PHG also alleged that the City Council had violated its due process rights by prejudging the permit request. However, the trial court did not agree, and this issue was not 

appealed.
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and not a burden of persuasion” at the first stage of this proceeding. The City noted 

an appeal to the Court of Appeals from the trial court’s order.

In seeking relief from the trial court’s order before the Court of Appeals, the 

City argued that the trial court had applied an incorrect standard of review when it 

“expressly and erroneously applied de novo review in evaluating whether the 

evidence was ‘sufficient.’ ” In addition, the City contended that the trial court had 

erred by concluding that PHG had met its burden of eliciting competent, material, 

and substantial evidence tending to show that the hotel would not substantially 

injure the value of adjoining or abutting properties; cause undue traffic congestion or 

a traffic hazard; or be in harmony with the scale, bulk, coverage, density, and 

character of the area or neighborhood in which the proposed hotel was intended to be

located.2 Finally, the City contended that the trial court had erred by considering the 

recommendations that had been made by various City committees and advisory 

boards and by holding that the City Council’s decision was arbitrary and capricious.

In rejecting the City’s challenge to the trial court’s order, the Court of Appeals 

began by concluding that the trial court had correctly applied the appropriate 

standard of review. PHG Asheville, LLC v. City of Asheville, 822 S.E.2d 79, 86 (N.C. 

 

2 The City failed to argue before the Court of Appeals that the trial court had erred by 

concluding that PHG had satisfied its burden of producing competent, material, and 

substantial evidence addressing the three ordinance criteria that are not discussed in the 

text of this opinion, thereby abandoning its right to challenge the trial court’s decision with 

respect to those criteria on appeal. See N.C.R. App. P. 28(a) (stating that “[i]ssues not 

presented and discussed in a party’s brief are deemed abandoned”).
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Ct. App. 2018) (stating that “[t]he superior court’s order shows it did not weigh 

evidence, but properly applied de novo review to determine the initial legal issue of 

whether Petitioner had presented competent, material, and substantial evidence”). 

According to the Court of Appeals, “[t]he City Council’s 44 findings of fact were 

unnecessary, improper, and irrelevant” because “[n]o competent, material, and 

substantial evidence was presented to rebut Petitioner’s prima facie case, and no 

conflicts in the evidence required the City Council to make findings to resolve any 

disputed issues of fact.” Id. The Court of Appeals reached this conclusion based upon

N.C.G.S. § 160A-393(l)(2), which provides that “findings of fact are not necessary 

when the record sufficiently reveals the basis for the decision below or when the 

material facts are undisputed and the case presents only an issue of law.” Id. (cleaned 

up) (quoting N.C.G.S. § 160A-393(l)(2) (2017)). For that reason, the Court of Appeals 

held that any “whole record” review that the trial court might have conducted had 

been rendered unnecessary in light of its determination that PHG had presented 

competent, material, and substantial evidence that sufficed to establish the existence 

of a prima facie case of entitlement to the issuance of the permit and that no 

competent, material, and substantial evidence had been presented in opposition to 

PHG’s request. Id. at 87. More specifically, the Court of Appeals held that Mr. 

Crozier’s report and related testimony “constitute[d] material, as well as competent 

and substantial, evidence to show prima facie compliance with criteria 3,” id. at 90, 

and that “[n]o competent, material, and substantial expert evidence contra was 
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presented at the hearing to show [that] Crozier’s analysis was unsound or utilized an 

improper methodology.” Id. at 89 (stating that “[t]he City Council’s lay notion that 

Crozier’s analysis is based upon an inadequate methodology does not constitute 

competent evidence under the statute to rebut his expert testimony and report”). 

Similarly, the Court of Appeals concluded that “[n]o competent, material, and 

substantial evidence was presented to refute Dean’s traffic analysis,” that Mr. “Dean 

[had] testified [that] his study was conducted in accordance with industry standards 

and used standard industry data and methods,” and that “[t]he speculations of lay 

members of the public and unsubstantiated opinions of City Council members do not 

constitute competent evidence contra under the statutes and precedents to rebut 

Dean’s traffic analysis.” Id. at 91. As a result, for all of these reasons, the Court of 

Appeals affirmed the trial court’s order. On 9 May 2019, this Court allowed the City’s 

discretionary review petition.

In seeking to persuade us to overturn the Court of Appeals’ decision, the City 

argues that, pursuant to this Court’s holding in Mann Media, “a local government 

may deny a conditional use permit if, at the permit hearing, the developer is unable 

to definitively address whether the proposed development presents a safety risk” and 

“that this rule applies even when the safety risk is raised by members of the public 

whose testimony is ultimately inadmissible,” citing Mann Media, Inc. v. Randolph 

Cty. Planning Bd., 356 N.C. 1, 16–17, 565 S.E.2d 9, 19 (2002). In the City’s view, 

“there is no meaningful difference between Mann Media and this case” given that, in 
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Mann Media, members of the public raised concerns about ice falling from a tower 

while, in this case, a member of the public raised a safety issue concerning the 

presence of a blind hill near a parking garage. The City argues, that, just like in 

Mann Media, “PHG’s witness could not state with certainty—much less ‘satisfactorily

. . . prove’ or ‘guarantee’—that the proposed development would not create a ‘safety 

risk’ ” and that PHG’s failure to adequately address this safety issue necessitated 

denial of PHG’s permit, quoting Mann Media, 356 N.C. at 17, 565 S.E.2d at 19. In 

addition, the City argues that, “when the local government assesses the evidence at 

the permit hearing, the local government may rely on its knowledge of the local 

community,” citing Humble Oil & Refining Co. v. Bd. of Aldermen, 284 N.C. 458, 468, 

202 S.E.2d 129, 136 (1974). The City contends that, “instead of allowing local 

knowledge to inform local permitting decisions, the Court of Appeals expressly 

constrained local governments from considering that local knowledge.” As a result, 

the City contends that the Court of Appeals’ decision conflicts with our decisions in 

Mann Media and Humble Oil and that, “[i]f left undisturbed[, it] would usher in a 

new era of perfunctory, rubber-stamp review” of conditional use permits by local 

governing bodies.

Secondly, the City argues that “the Court of Appeals erred in its treatment of 

the City Council’s factual findings.” In the City’s view, the City Council’s findings of 

fact concerning traffic congestion and traffic hazards and its findings of fact 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Opinion of the Court

-21-

concerning the effect of the proposed hotel upon the value of surrounding properties 

had ample record support.3

In seeking to convince us to affirm the Court of Appeals’ decision, PHG argues 

that “an applicant is entitled to a conditional use permit if the applicant meets its 

prima facie burden” of producing competent, material, and substantial evidence in 

support of each condition set out in the applicable land use ordinance. According to 

PHG, “the applicant only has a burden of production” rather than a burden of 

persuasion, with this burden of production having been “deliberately and 

appropriately [set at a] low [level] in conditional use permit cases because [the City] 

has already legislatively determined that the proposed use is an acceptable use at the 

location, subject to meeting the standards of a [conditional use permit].” For that 

reason, PHG contends that the issue of whether an applicant has met its initial 

burden to produce competent, material, and substantial evidence is a legal question 

subject to de novo review and that a reviewing court “is not bound by a municipality’s 

factual findings” in making that decision. As a result, PHG asserts that “the City 

Council erred in denying the conditional use permit” because it met its burden of 

 

3 The City has abandoned the contention that it advanced before the Court of Appeals 

that the trial court had erred by reversing the City Council’s determination that PHG failed 

to meet its burden of producing competent, material, and substantial evidence that the 

development of the hotel would be in harmony with the scale, bulk, coverage, density and 

character of the area or neighborhood in which it is located by failing to bring that contention 

forward for our consideration in its new brief before this Court. See N.C.R. App. P. 28(a)
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Opinion of the Court

-22-

production regarding both traffic and property values and because “[t]he City 

Council’s findings were not based on competent, material, and substantial evidence.”

As this Court said just over forty years ago, “[t]he granting of a special 

exception is apparently not too generally understood.” Woodhouse v. Bd. of Comm’rs, 

299 N.C. 211, 218, 261 S.E.2d 882, 887 (1980) (quoting Syosset Holding Corp. v. 

Schlimm, 159 N.Y.S.2d 88, 89 (N.Y. Sup. Ct. 1956), modified and aff’d, 164 N.Y.S.2d 

890 (N.Y. App. Div. 1957)). “A conditional use permit ‘is one issued for a use which 

the ordinance expressly permits in a designated zone upon proof that certain facts 

and conditions detailed in the ordinance exist.’ ” Id. at 215–16, 261 S.E.2d at 886 

(quoting Humble Oil, 284 N.C. at 467, 202 S.E.2d at 135).

By the time that a case arising from an application for the issuance of a 

conditional use permit reaches this Court, the proceeding in question has been subject 

to several levels of examination and review. As an initial matter, the application 

must be considered by the applicable local governmental body. See N.C.G.S. § 160A388(a), (c) (2019). In the event that the local governmental body denies the 

application, the applicant has the right to seek judicial review of that decision by the 

superior court. See id. §§ 160A-388(e2)(2), -393. At the conclusion of that process, a 

disappointed litigant is entitled to seek appellate review of the trial court’s decision 

in accordance with the relevant statutory provisions and the North Carolina Rules of 

Appellate Procedure.
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Opinion of the Court

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At each step in this multi-level process, a distinct legal standard is applicable. 

According to well-established North Carolina law, the local governing board “must 

follow a two-step decision-making process in granting or denying an application for a 

[conditional] use permit.” Mann Media, 356 N.C. at 12, 565 S.E.2d at 16. As an 

initial matter, the local governmental body must determine whether “an applicant 

has produced competent, material, and substantial evidence tending to establish the 

existence of the facts and conditions which the ordinance requires for the issuance of 

a [conditional] use permit.” Humble Oil, 284 N.C. at 468, 202 S.E.2d at 136 (emphasis 

added). In the event that the applicant satisfies this initial burden of production, 

then “prima facie he is entitled to” the issuance of the requested permit. Id. At that 

point, any decision to deny the application “should be based upon findings contra 

which are supported by competent, material, and substantial evidence appearing in 

the record,” id., with the local governmental body lacking the authority to “deny a 

permit on grounds not expressly stated in the ordinance” given that “it must employ 

specific statutory criteria which are relevant.” Woodhouse, 299 N.C. at 218–19, 261 

S.E.2d at 887.

The superior court “ ‘sits in the posture of an appellate court’ and ‘does not 

review the sufficiency of evidence presented to it but reviews that evidence presented 

to the town board.’ ” Mann Media, 356 N.C. at 12–13, 565 S.E.2d at 17 (quoting 

Coastal Ready-Mix Concrete Co. v. Bd. of Comm’rs, 299 N.C. 620, 626–27, 265 S.E.2d 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Opinion of the Court

-24-

379, 383 (1980)). In reviewing the local governmental body’s decision, the superior 

court is charged with:

(1) Reviewing the record for errors in law,

(2) Insuring that procedures specified by law in both 

statute and ordinance are followed,

(3) Insuring that appropriate due process rights of a 

petitioner are protected including the right to offer 

evidence, cross-examine witnesses, and inspect documents,

(4) Insuring that decisions of town boards are supported 

by competent, material[,] and substantial evidence in the 

whole record, and

(5) Insuring that decisions are not arbitrary and 

capricious.

Id. at 13, 565 S.E.2d at 17 (quoting Coastal Ready-Mix, 299 N.C. at 626, 265 S.E.2d 

at 383); see also N.C.G.S. § 160A-393(k)(1)(b) (2019) (providing that the superior court 

should insure that the local governmental body’s decision concerning a conditional 

use permit was not “[i]n excess of the statutory authority conferred upon the city, 

including preemption, or the authority conferred upon the decision-making board by 

ordinance”).

The exact nature of the standard of review to be utilized by the superior court 

in any particular case “depends upon the particular issues presented on appeal.” 

Mann Media, 356 N.C. at 13, 565 S.E.2d at 17 (quoting ACT-UP Triangle v. Comm’n 

for Health Servs., 345 N.C. 699, 706, 483 S.E.2d 388, 392 (1997)). In the event that 

the petitioner asserts that the local governmental body has committed an error of 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Opinion of the Court

-25-

law, then that contention is subject to de novo review. Id. Under the well-established 

de novo standard of review, “the superior court ‘considers the matter anew and freely 

substitutes its own judgment for the [local governing board’s] judgment.’ ” Mann 

Media, 356 N.C. at 13–14, 565 S.E.2d at 17 (cleaned up) (quoting Sutton v. N.C. Dep’t 

of Labor, 132 N.C. App. 387, 389, 511 S.E.2d 340, 341 (1999)). The extent to which 

“the record contains competent, material, and substantial evidence is a conclusion of 

law, reviewable de novo.” N.C.G.S. § 160A-393(k)(2) (2019).4 In the event that the 

petitioner contends that the local governmental body’s decision was either (1) 

arbitrary or capricious or (2) not supported by competent, material, or substantial 

evidence, the superior court is required to conduct a whole record review. Mann 

Media, 356 N.C. at 13, 565 S.E.2d at 17. In conducting a whole record review, the 

reviewing court “must ‘examine all competent evidence’ (the ‘whole record’) in order 

to determine whether the [local governing body’s] decision is supported by 

‘substantial evidence.’ ” Id. at 14, 565 S.E.2d at 17 (quoting ACT-UP Triangle, 345 

 

4 PHG filed a motion seeking to have the City’s appeal dismissed on the grounds that 

it had been rendered moot as a result of the enactment of Session Law 2019-111 on 28 June 

2019, which added the language quoted in the text to N.C.G.S. § 160A-393(k)(2). See An Act 

to Clarify, Consolidate, and Reorganize the Land-Use Regulatory Laws of the State, S.L. 

2019-111, § 1.9, https://perma.cc/G86W-WPR6. In PHG’s view, the enactment of this 

legislation “definitively answered the principal question presented in this appeal: what is 

the appropriate standard of review for whether an applicant has met its prima facie burden 

of producing competent, material, and substantial evidence?” We are not persuaded by this 

argument. As an initial matter, S.L. 2019-111 states that it “clarif[ies] and restate[s] the 

intent of existing law and appl[ies] to ordinances adopted before, on, and after the effective 

date.” Id. at § 3.1. In addition, the content of the applicable standard of review is not 

determinative in this instance. As a result, we deny PHG’s motion to dismiss the City’s 

appeal.
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Opinion of the Court

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N.C. at 706, 483 S.E.2d at 392). Under the whole record test, the reviewing court is 

not allowed “to replace the board’s judgment as between two reasonably conflicting 

views, even though the court could justifiably have reached a different result had the 

matter been before it de novo.” Id. at 14, 565 S.E.2d at 17–18 (quoting Thompson v. 

Wake Cty. Bd. of Educ., 292 N.C. 406, 410, 233 S.E.2d 538, 541 (1977)). Any order 

that the superior court enters in the course of reviewing a local governmental board’s 

decision relating to the issuance of a conditional use permit “must set forth sufficient 

information in its order to reveal the scope of review utilized and the application of 

that review.” Id. at 13, 565 S.E.2d at 17 (citation omitted).

In the event that appellate review of the superior court’s order is requested, 

the appellate court “examines the trial court’s order for error[s] of law,” with that 

“process ha[ving] been described as a twofold task: (1) determining whether the trial 

court exercised the appropriate scope of review and, if appropriate, (2) deciding 

whether the court did so properly.” Id. at 14, 565 S.E.2d at 18 (quoting ACT-UP 

Triangle, 345 N.C. at 706, 483 S.E.2d at 392). In the event that the case under 

consideration reaches this Court after a decision by the Court of Appeals, the issue 

before this Court is whether the Court of Appeals committed any errors of law. N.C.R. 

App. P. 16(a). For that reason, this Court is required to make the same inquiry that 

the Court of Appeals was called upon to undertake in reviewing the trial court’s order. 

As a result, we will now examine whether the trial court utilized the appropriate 

standard of review and, if so, whether it did so properly.
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Opinion of the Court

-27-

As the record that is before us in this case clearly reflects, the trial court

appropriately engaged in both de novo and whole record review. Mann Media, 356 

N.C. at 15, 565 S.E.2d at 18 (stating that a “court may properly employ both 

standards of review in a specific case” as long as “the standards are to be applied 

separately to discrete issues” and the trial court “identif[ies] which standard(s) it 

applied to which issues” (citations omitted)). In addressing the issue of whether PHG 

adduced sufficient evidence to satisfy the applicable burden of production, the trial 

court stated that:

Exercising de novo review, the Court concludes as a matter 

of law that the evidence presented by PHG and other 

supporting witnesses was competent, material and 

substantial and sufficient to establish a prima facie case of 

entitlement to a conditional use permit. In deciding 

otherwise, the Council made an error of law. A court 

reviews “de novo the initial issue of whether the evidence 

presented by a petitioner met the requirement of being 

competent, material, and substantial.” Blair Investments, 

LLC. v. Roanoke Rapids City Council, 231 N.C. App. 318, 

321, 752 S.E.2d 524, 527 (2013).

Thus, the trial court engaged in de novo review in analyzing PHG’s challenge to the 

City Council’s determination that PHG had failed to make the necessary prima facie

showing of entitlement to the issuance of the requested conditional use permit.

As this Court has clearly held, the extent to which an applicant has presented 

competent, material, and substantial evidence tending to satisfy the standards set 

out in the applicable ordinance for the issuance of a conditional use permit is a 

question directed toward the sufficiency of the evidence presented by the applicant 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Opinion of the Court

-28-

and involves the making of a legal, rather than a factual, determination. See Styers 

v. Phillips, 277 N.C. 460, 464, 178 S.E.2d 583, 586 (1971) (stating that “[w]hether 

there is enough evidence to support a material issue is always a question of law for 

the court”). For that reason, we have previously analogized an applicant’s burden of 

producing competent, material, and substantial evidence to support the issuance of a 

conditional use permit to the making of the showing necessary to overcome a directed 

verdict motion during a jury trial. Humble Oil, 284 N.C. at 470–71, 202 S.E.2d at 

137 (stating that “[s]ubstantial evidence is more than a mere scintilla” and “must be 

enough to justify, if the trial were to a jury, a refusal to direct a verdict when the 

conclusion sought to be drawn from it is one of fact for the jury” (citation omitted)).

In concluding that PHG presented sufficient evidence to support the issuance 

of the requested conditional use permit, the trial court recognized that “PHG 

submitted a large volume of evidence that its hotel project met all ordinance 

standards” and that the evidence that PHG elicited “included [testimony from] five

witnesses [three of whom] were received as experts, without objection, and who 

presented live testimony and ample reports, also received without objection.” In 

addition, the trial court noted that “no competent evidence opposing the . . . 

application appear[ed] in the record.” The Court of Appeals held that “[t]he superior 

court’s order shows it did not weigh evidence, but properly applied de novo review to 

determine the initial legal issue of whether Petitioner had presented competent, 

material, and substantial evidence.” PHG Asheville, 822 S.E.2d at 86. We agree with 
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Opinion of the Court

-29-

the Court of Appeals that the trial court utilized the appropriate standard of review

with respect to this issue and did so properly.5

As the record reflects, PHG presented the testimony of two architects, an 

appraiser, a traffic engineer, a certified planner, and the Vice President of PHG who, 

between them, presented evidence concerning each of the standards enunciated in 

 

5 This Court did hold in Mann Media that, “[u]nder the whole record test, in light of 

petitioners’ inability satisfactorily to prove that the proposed use would not materially 

endanger public safety, we are not permitted to substitute our judgment for that of [the 

governing board]” and “hold that petitioners failed to meet their burden of proving this first 

requirement and did not establish a prima facie case.” Mann Media, 356 N.C. at 17, 565 

S.E.2d at 19. The Court engaged in whole record review in Mann Media because the wording 

of the superior court’s order “suggest[ed] that the superior court applied both [de novo and 

whole record review] simultaneously in several instances,” a fact that left us “unable to 

conclude that the superior court consistently exercised the appropriate scope of review.” Id. 

at 15, 565 S.E.2d at 18. Even so, we concluded that no remand was necessary “because the 

central issue presented by [the governing board] and argued by both parties on appeal is 

whether there was competent, material, and substantial evidence to support [the governing 

board’s] denial of a [conditional] use permit,” with “[r]esolution of this issue involv[ing]

evaluation of evidence used by [the governing board] to deny the application” and with “the 

entire record of the hearing [being] before us.” Id. As a result, the Court applied the whole 

record test in Mann Media “in the interests of judicial economy,” id. at 16, 565 S.E.2d at 19, 

rather than because it was fundamentally altering the existing process for judicially 

reviewing challenges to the denial of conditional use permits and implicitly overruling 

decisions discussed in the text and cited without exception in Mann Media for the purposes 

for which we have cited them in this opinion, such as Humble Oil. Id. at 12, 565 S.E.2d at 

16. In view of the fact that the trial court appropriately separated the issue of whether PHG 

had established the required prima facie case from the other issues that were before it at that 

time, there was no need for either the Court of Appeals or this Court to refrain from utilizing 

the ordinarily applicable standard of review, which Mann Media did nothing to change. In 

addition, the City has not cited any statutory provision or decision of this Court that in any 

way suggests that the manner in which its conditional use permit ordinance is couched has 

any effect upon the manner in which a decision refusing to issue a conditional use permit 

should be reviewed by either the trial or appellate courts. As a result, the issue of whether 

the applicant for a conditional use permit made out the necessary prima facie case does not 

involve determining whether the applicant met a burden of persuasion, as compared to a 

burden of production, and is subject to de novo, rather than whole record, review during the 

judicial review process.
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Opinion of the Court

-30-

the relevant portion of the City’s land use ordinance. Mr. Crozier and Mr. Dean, 

whose testimony is at issue in the case as it has been presented to us, were each 

qualified as experts in their respective fields. Both Mr. Crozier and Mr. Dean 

submitted voluminous reports that contained extensive data detailing the basis for 

their conclusions. Mr. Crozier’s appraisal report and testimony provided ample 

support for PHG’s contention that the proposed hotel would not substantially injure 

the value of adjoining or abutting properties by detailing recent land sales in the area 

near the proposed hotel development and applying the principle of progression before 

concluding that the construction and operation of the proposed hotel would not injure 

the value of adjoining or abutting properties and would, instead, cause their values 

to increase. Similarly, Mr. Dean’s traffic study and testimony provided ample 

support for PHG’s contention that the proposed hotel would not cause undue traffic 

congestion or create a traffic hazard in light of the City staff’s statement that “all we 

needed to provide was the trip generation table . . . as well as our anticipated 

distribution of those trips.” Mr. Dean’s analysis, which was performed in accordance 

with industry standards and utilized rates and equations developed by the Institute 

of Traffic Engineers, concluded that the traffic caused by the proposed development 

would result in only a “minimal impact” and would “only increase the overall delay 

at [nearby] intersections by about four seconds.” We agree with the trial court and 

the Court of Appeals that the evidence that PHG presented before the City Council 
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Opinion of the Court

-31-

sufficed to satisfy its burden of producing competent, material, and substantial 

evidence tending to show that it satisfied the relevant ordinance standards.

In light of the fact that PHG had made a sufficient showing to survive what 

amounted to a directed verdict motion and the City does not contend that the record 

contains any “evidence contra,” the City Council’s inquiry should have ended at this 

point. See N.C.G.S. § 160A-388(e2)(1) (2019) (stating that “[t]he board shall 

determine contested facts and make its decision within a reasonable time” by 

entering an order that “reflect[s] the board’s determination of contested facts and 

their application to the applicable standards”); see also id. § 160A-393(l)(2) (stating 

that “findings of fact are not necessary when the record sufficiently reveals the basis 

for the decision below or when the material facts are undisputed and the case 

presents only an issue of law”). Instead, however, the City Council concluded that 

PHG had failed to make the necessary prima facie showing and attempted to support 

this determination with a series of findings of fact that rested upon incompetent 

testimony and questioned the credibility of the testimony provided by PHG’s 

witnesses.

In defense of the approach that it took in considering PHG’s application, the 

City argues that the Court of Appeals disregarded the findings of fact that are 

contained in its order and argues that the effect of the Court of Appeals’ decision was 

that, “if no one shows up to oppose a project and introduce evidence in opposition, 

every new development would be a fait accompli.” However, the basis upon which 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Opinion of the Court

-32-

the City seeks to have its decision upheld rests upon a misapprehension of the 

applicable law, under which “[a] denial of the permit should be based upon findings 

contra which are supported by competent, material, and substantial evidence 

appearing in the record.” Humble Oil, 284 N.C. at 468, 202 S.E.2d at 136. In other 

words, given that PHG elicited sufficient evidence to satisfy its burden of production 

to show an entitlement to the issuance of the requested conditional use permit, the 

City Council did, in fact, lack the authority to deny PHG’s application in the absence 

of competent, material, and substantial evidence tending to support a different 

outcome.

The findings of fact contained in the City’s order are simply inadequate to 

support the result that the City Council ultimately reached. As an initial matter, we 

note that the City Council’s findings concerning property values and traffic-related 

issues lack any support in the admissible and competent evidence. Simply put, given 

the absence of any evidence that tended to conflict with Mr. Crozier’s appraisal study, 

there were no factual issues relating to the property value issue which the City 

Council needed to resolve. Instead, the City Council’s findings of fact fault Mr. 

Crozier for failing to include information that he had no reason, based upon an 

examination of the relevant ordinance language, to conclude would be needed or even 

relevant. For example, the City Council states in Finding of Fact No. 19 that “[t]here 

was no evidence, through facts and data, to indicate how the Hotel would affect or 

impact such an increase in value” despite the fact that the City’s unified development 
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Opinion of the Court

-33-

ordinance merely required PHG to produce evidence tending to establish that the 

proposed development would not substantially injure the value of adjoining or 

abutting properties without making any mention of a requirement that the applicant 

establish the amount by which the proposed development would affect the value of 

surrounding properties. Similarly, in Finding of Fact No. 20, the City Council faulted 

Mr. Crozier for failing to present comparable sales data relating to properties in other 

parts of Asheville or in entirely different cities. The fundamental problem with the 

City Council’s justifications for refusing to credit the testimony of Mr. Crozier is that 

it held PHG to a burden that is simply not reflected in or supported by the relevant 

ordinance provisions. See Woodhouse, 299 N.C. at 219, 261 S.E.2d at 887–88 (stating 

that “[t]o hold that an applicant must first anticipate and then prove or disprove each 

and every general consideration would impose an intolerable, if not impossible, 

burden on an applicant for a conditional use permit,” with an applicant not being 

required to “negate every possible objection to the proposed use”).

The same deficiencies are present in the City Council’s findings concerning 

traffic-related issues. Once again, no competent, material, or substantial evidence 

was presented in opposition to the conclusions drawn in Mr. Dean’s analysis. In spite 

of the fact that Mr. Dean’s uncontested testimony established that his traffic study 

had been performed in accordance with industry standards, the City Council 

questioned the credibility of the results reached in his study on the grounds that he 

had failed to base his study upon conditions specific to Asheville. Among other things,
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Opinion of the Court

-34-

the City Council criticized Mr. Dean for failing to base his traffic study upon data 

relating to conditions on the weekend or during the summer or fall seasons when 

tourist-related traffic in Asheville is at its height. Once again, the City Council’s 

findings reflect an insistence upon the presentation of evidence that is never 

mentioned in the City’s land use ordinance, which is a standard to which the 

applicant cannot lawfully be held. In addition, the City Council’s findings also rested 

upon the testimony of Mr. Rawls, who raised questions about limitations upon the 

ability of persons exiting the hotel’s parking garage to see up and down an adjoining 

street in spite of the fact that the General Assembly had determined that lay 

testimony concerning traffic conditions is not competent in conditional use permit 

proceedings. See N.C.G.S. § 160A-393(k)(3)(b) (2019) (stating that “[t]he term 

‘competent evidence,’ as used in this subsection, shall, regardless of the lack of a 

timely objection, not be deemed to include the opinion testimony of lay witnesses as 

to . . . [t]he increase in vehicular traffic resulting from a proposed development 

[which] would pose a danger to the public safety”). As a result, the City Council’s 

traffic-related findings do not justify a decision to reject Mr. Dean’s analysis of the 

impact of the proposed hotel on traffic in the surrounding area.

A city council is, of course, entitled to rely upon the special knowledge of its 

members concerning conditions in the locality which they serve. However, this 

principle does not justify the City Council’s decision to deny PHG’s permit application 

in this case. In Humble Oil, a town alderman opposed the issuance of a conditional 
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Opinion of the Court

-35-

use permit for a filling station in Chapel Hill, stating that the intersection near the 

proposed station “had been dangerous for twenty-eight years.” Humble Oil, 284 N.C. 

at 469, 202 S.E.2d at 136. Before holding that this statement and others like it were 

nothing more than “conclusions unsupported by factual data or background” so as to 

be “incompetent and insufficient to support the Aldermen’s findings,” id., we stated 

that

[i]f there be facts within the special knowledge of the 

members of a Board of Aldermen or acquired by their 

personal inspection of the premises, they are properly 

considered. However, they must be revealed at the public 

hearing and made a part of the record so that the applicant 

will have an opportunity to meet them by evidence or 

argument and the reviewing court may judge their 

competency and materiality.

Id. at 468, 202 S.E.2d at 136.

As we have already noted, several members of the City Council mentioned facts 

within their special knowledge about the city that they represented during the quasijudicial hearing held for the purpose of considering PHG’s application. Among other 

things, various members of the City Council questioned Mr. Dean concerning the 

manner in which he conducted his traffic study, with their questions raising issues 

about the extent to which his study should have been based upon conditions existing 

at a different date and time. Aside from the fact that Mr. Dean was able to answer 

and provide reasonable explanations for his answers, nothing in the relevant 

ordinance provision required Mr. Dean to have anticipated these questions and to 
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Opinion of the Court

-36-

have conducted his study in the manner that these questions seemed to believe to 

have been appropriate without sufficient advance notice to have permitted him to 

present any necessary rebuttal evidence. As a result, nothing in the special facts 

known to the members of the City Council in this case justified the making of a 

decision that PHG had failed to satisfy its burden of production or to reject PHG’s 

permit application.

Finally, the City argues that this Court’s decision in Mann Media requires a 

decision in its favor. In Mann Media, the Randolph County Planning Board denied 

an application for the issuance of a conditional use permit authorizing the 

construction and operation of a broadcast tower based upon concerns that ice would 

fall from the necessary support beams. Mann Media, 356 N.C. at 3–5, 565 S.E.2d at 

11–12. After determining that the evidence presented in opposition to the issuance 

of the proposed permit constituted incompetent “anecdotal hearsay,” id. at 17, 565 

S.E.2d at 19, this Court held that “petitioners [had] failed to carry their burden of 

proving that the potential of ice falling from support wires of the proposed tower was 

not a safety risk” in light of the fact that the applicant had “candidly acknowledged 

his inability to state with certainty that ice would not travel a greater distance in the 

event of wind or storm,” id., and that, for that reason, “petitioners [had] failed to meet 

their burden of proving this first requirement [that the proposed tower would not 

materially endanger public safety] and did not establish a prima facie case.” Id. The 

same result would not be appropriate in this case given that nothing in the relevant 
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Opinion of the Court

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ordinance provision, particularly given the advice that Mr. Dean received from the 

City staff, set forth any requirement that the sort of sight distance study that the 

City Council wanted to have been conducted was required in order to obtain the 

issuance of the requested conditional use permit. If Department of Transportation 

regulations do require a sight distance survey, it is not the City Council’s role to 

enforce those regulations in the guise of implementing the City’s ordinances relating 

to conditional use permits.

Thus, we hold that the Asheville City Council made a legislative decision to 

allow certain uses by right in specified zones “upon proof that certain facts and 

conditions detailed in the ordinance exist.” Woodhouse, 299 N.C. at 215–16, 261 

S.E.2d at 886 (quoting Humble Oil, 284 N.C. at 467, 202 S.E.2d at 135). The effect of 

the making of this decision was to bind the Asheville City Council to the use of quasijudicial procedures and to exclusive reliance upon the substantive standards 

enunciated in the relevant provisions of its land use ordinance in determining

whether conditional use permit applications should be granted or denied. See id. at 

219, 261 S.E.2d at 887 (stating that, “[w]here a zoning ordinance specifies standards 

to apply in determining whether to grant a [conditional] use permit and the applicant 

fully complies with the specified standards, a denial of the permit is arbitrary as a 

matter of law” (quoting Hay v. Township of Grow, 206 N.W.2d 19, 22 (Minn. 1973)). 

As a result, in the event that an applicant for the issuance of a conditional use permit 

presents competent, material, and substantial evidence tending to show that it has 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Opinion of the Court

-38-

satisfied the applicable ordinance standards, it has made out a prima facie case of 

entitlement to the issuance of the conditional use permit, with any decision to deny 

the permit application being required to rest upon contrary findings of fact that have 

adequate evidentiary support. In view of the fact that PHG presented competent, 

material, and substantial evidence that its proposed hotel satisfied the relevant 

ordinance standards and the fact that no competent, material, and substantial 

evidence was presented in opposition to PHG’s showing, the City simply lacked the 

legal authority to deny PHG’s application. As a result, subject to the modified logic 

set forth in this opinion, we affirm the Court of Appeals’ decision.

MODIFIED AND AFFIRMED.
Justice EARLS dissenting.

Here the majority overrules this Court’s decision in Mann Media, Inc. v. 

Randolph Cty. Planning Bd., in which the Court held that the question of whether a 

petitioner meets its burden of establishing a prima facie case for a conditional use 

permit is reviewed—not de novo—but rather under the whole record test, pursuant 

to which “we are not permitted to substitute our judgment for that of” the local 

government. 356 N.C. 1, 17, 565 S.E.2d 9, 19 (2002) (“Under the whole record test, 

in light of petitioners’ inability satisfactorily to prove that the proposed use would not 

materially endanger public safety, we are not permitted to substitute our judgment 

for that of respondent. Accordingly, we hold that petitioners failed to meet their 

burden of proving this first requirement and did not establish a prima facie case.”). 

In my view, under the whole record test, the Asheville City Council’s determination 

that PHG Asheville, LLC (PHG), failed to meet its burden of establishing that the 

proposed use would not cause undue traffic congestion or a traffic hazard was not

arbitrary or capricious. I would therefore reverse the decision of the Court of Appeals, 

which affirmed the superior court’s reversal of the City Council’s denial of PHG’s 

application. Accordingly, I respectfully dissent.

While “[z]oning ordinances list uses that are automatically permitted in a 

particular zoning district,” which “are . . . referred to as ‘uses by right,’ ” “[m]any 

zoning ordinances also allow additional uses in each district that are permitted only 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-2-

if specific standards are met; these are what are known as special and conditional 

uses.” David. W. Owens, Land Use Law in North Carolina, at 159 (2d ed. 2011). As 

the majority notes, “[a] conditional use permit ‘is one issued for a use which the 

ordinance expressly permits in a designated zone upon proof that certain facts and 

conditions detailed in the ordinance exist.’ ” Woodhouse v. Bd. of Comm’rs of Nags 

Head, 299 N.C. 211, 215–16, 261 S.E.2d 882, 886 (1980) (quoting Refining Co. v. Bd. 

of Aldermen, 284 N.C. 458, 467, 202 S.E. 2d 129, 135 (1974)). Notably, “[t]he 

standards underlying such permits include those that require application of some 

degree of judgment and discretion, as opposed to permitted uses where only objective 

standards are applied.” Owens, Land Use Law in North Carolina, at 159. 

When determining whether to grant a conditional use permit, the local 

government’s authorized board1 “operates as the finder of fact” and “must follow a 

two-step decision-making process” in making its determination:

If “an applicant has produced competent, material, and 

substantial evidence tending to establish the existence of 

the facts and conditions which the ordinance requires for 

the issuance of a special use permit, prima facie he is 

entitled to it.” If a prima facie case is established, “[a] 

denial of the permit [then] should be based upon findings 

contra which are supported by competent, material, and 

substantial evidence appearing in the record.” 

 

1 “North Carolina law allows the final decision on a special or conditional use permit 

to be assigned to the governing board, the board of adjustment, or the planning board.” 

Owens, Land Use Law in North Carolina, at 160. 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-3-

Mann Media, 356 N.C. at 12, 565 S.E.2d at 17 (alterations in original) (quoting 

Humble Oil & Ref. Co. v. Bd. of Aldermen of Chapel Hill, 284 N.C. 458, 468, 202 

S.E.2d 129, 136 (1974)). The “board sits in a quasi-judicial capacity” and

must insure that an applicant is afforded a right to crossexamine witnesses, is given a right to present evidence, is 

provided a right to inspect documentary evidence 

presented against him and is afforded all the procedural 

steps set out in the pertinent ordinance or statute. Any 

decision of the town board has to be based on competent, 

material, and substantial evidence that is introduced at a 

public hearing.

Id. at 12, 565 S.E.2d at 16–17 (quoting Coastal Ready-Mix Concrete Co. v. Bd. of 

Comm’rs of Nags Head, 299 N.C. 620, 626, 265 S.E.2d 379, 383 (1980)). The board 

“is ‘without power to deny a permit on grounds not expressly stated in the ordinance’ 

and it must employ specific statutory criteria which are relevant.” Id. at 12, 565 

S.E.2d at 16–17 (quoting Woodhouse, 299 N.C. at 218–19, 261 S.E.2d at 887); see also 

Owens, Land Use Law in North Carolina, at 160 n.8 (“While the standards for the 

permit involve application of a degree of discretion, the applicant is entitled to the 

permit upon establishing that the standards will be met.”).

This Court addressed the standard of review applicable to the denial of a 

conditional or special use permit in Mann Media. There, the petitioners sought a 

special use permit to construct a broadcast tower in an area of Randolph County 

zoned for residential and agricultural use. Mann Media, 356 N.C. at 2, 565 S.E.2d at 

11. Randolph County’s zoning ordinance provided that a special use permit may be 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-4-

granted for public utilities, including broadcast towers, to be built in 

residential/agricultural areas, but required Randolph County’s Planning Board (the 

Planning Board) to find four factors before granting the permit:

(1) that the use will not materially endanger the public 

health or safety if located where proposed and developed 

according to the plan as submitted and approved;

(2) that the use meets all required conditions and 

specifications;

(3) that the use will not substantially injure the value of 

adjoining or abutting property, or that the use is a public 

necessity; and

(4) that the location and character of the use if developed 

according to the plan as submitted and approved will be in 

harmony with the area in which it is to be located and in 

general conformity with the Land Development Plan for 

Randolph County.

Id. at 11, 565 S.E.2d at 16. After hearing the petitioners’ evidence, the Planning 

Board found, inter alia, that “ice has formed and fallen from the other towers within 

the county’s zoning jurisdiction causing damage and is likely to do so from the 

proposed tower.” Id. at 3, 565 S.E.2d at 12. The Planning Board denied the permit, 

determining that the proposed use would materially endanger the public safety, 

would substantially injure the value of adjoining or abutting property, and would not 

be in harmony with the surrounding area. Id. at 4, 565 S.E.2d at 12. On appeal, the 

superior court reversed, concluding that the Planning Board’s decision was not 

supported by competent, material, and substantial evidence. Id. at 7–8, 565 S.E.2d 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-5-

at 14. In particular, the superior court determined that any evidence presented to 

the Planning Board concerning ice damage at other towers was incompetent, and 

therefore the Board’s reliance on such evidence was arbitrary and capricious. Id. at 

7–8, 565 S.E.2d at 14. A majority panel at the Court of Appeals affirmed the superior 

court, and the petitioners sought further review in this Court. Id. at 9, 565 S.E.2d at 

15. 

This Court stated that in appeals from denials of conditional use permits, the 

“superior court ‘sits in the posture of an appellate court’ and ‘does not review the 

sufficiency of evidence presented to it but reviews that evidence presented to the town 

board.’ ” Mann Media, 356 N.C. at 12–13, 565 S.E.2d at 17 (quoting Coastal ReadyMix Concrete Co., 299 N.C. at 626–27, 265 S.E.2d at 383). The superior court’s role 

consists of:

(1) Reviewing the record for errors in law,

(2) Insuring that procedures specified by law in both 

statute and ordinance are followed,

(3) Insuring that appropriate due process rights of a 

petitioner are protected including the right to offer 

evidence, cross-examine witnesses, and inspect 

documents,

(4) Insuring that decisions of town boards are supported 

by competent, material and substantial evidence in 

the whole record, and

(5) Insuring that decisions are not arbitrary and 

capricious.
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-6-

Id. at 13, 565 S.E.2d at 17 (quoting Coastal Ready-Mix Concrete Co., 299 N.C. at 626, 

265 S.E.2d at 383). The Court explained that the applicable standard of “judicial 

review ‘depends upon the particular issues presented on appeal.’ ” Id. at 13, 565 

S.E.2d at 17 (quoting ACT-UP Triangle v. Comm’n for Health Servs., 345 N.C. 699, 

706, 483 S.E.2d 388, 392 (1997)). Specifically, “[w]hen the petitioner ‘questions (1) 

whether the agency’s decision was supported by the evidence or (2) whether the 

decision was arbitrary or capricious, then the reviewing court must apply the ‘whole 

record’ test.’ ” Id. at 13, 565 S.E.2d at 17 (quoting ACT-UP Triangle, 345 N.C. at 706, 

483 S.E.2d at 392). On the other hand, “[i]f a petitioner contends the [b]oard’s 

decision was based on an error of law, ‘de novo’ review is proper.” Id. at 13, 565 S.E.2d 

at 17 (quoting Sun Suites Holdings, LLC v. Bd. of Aldermen of Garner, 139 N.C. App. 

269, 272, 533 S.E.2d 525, 527–28 (2000)). The Court stressed that “[t]hese standards 

of review are distinct,” explaining:

Under a de novo review, the superior court “consider[s] the 

matter anew[ ] and freely substitut[es] its own judgment 

for the agency’s judgment.” When utilizing the whole 

record test, however, the reviewing court must “ ‘examine 

all competent evidence (the “whole record”) in order to 

determine whether the agency decision is supported by 

“substantial evidence.” ’ ” “The ‘whole record’ test does not 

allow the reviewing court to replace the [b]oard’s judgment 

as between two reasonably conflicting views, even though 

the court could justifiably have reached a different result 

had the matter been before it de novo.” 

Mann Media, 356 N.C. at 13–14, 565 S.E.2d at 17–18 (alterations in original)

(citations omitted). The Court further elaborated that under the whole record test, a
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-7-

“finding must stand unless it is arbitrary and capricious,” and that in making this 

determination

the reviewing court does not have authority to override 

decisions within agency discretion when that discretion is 

exercised in good faith and in accordance with law.

The “arbitrary or capricious” standard is a difficult one to 

meet. Administrative agency decisions may be reversed as 

arbitrary or capricious if they are “patently in bad faith,” 

or “whimsical” in the sense that “they indicate a lack of fair 

and careful consideration” or “fail to indicate [ ]any course 

of reasoning and the exercise of judgment.[ ]”

Id. at 16, 565 S.E.2d at 19 (alterations in original) (citations omitted). 

Applying these standards, the Court first examined the Planning Board’s 

finding that the proposed broadcast tower would “materially endanger the public 

safety” due to the risk of ice falling from the tower. Id. at 16, 565 S.E.2d at 19. The 

Court stated:

In this finding, respondent cited evidence of ice 

building up and falling from other towers. Our review of 

the record indicates that this evidence, consisting 

principally of ice brought before respondent in a cooler and 

anecdotal hearsay, was not competent. Even so, the record 

also indicates that petitioners failed to carry their burden 

of proving that the potential of ice falling from support 

wires of the proposed tower was not a safety risk. 

Petitioner Mann testified that while the tower itself would 

have deicing equipment, the support wires would not. 

Although he opined that any ice forming on the wires would 

slide down the wires, he candidly acknowledged his 

inability to state with certainty that ice would not travel a 

greater distance in the event of wind or storm. While Mann 

argued that the prevailing winds at the site are from a 

direction that would blow any ice away from nearby 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-8-

buildings and dwellings, he could not guarantee that 

falling ice would not be a risk. Other evidence in the record 

shows that numerous permanent structures lie in close 

proximity to the proposed tower site.

Respondent’s finding that petitioners failed to 

establish that there would be no danger to the public from 

falling ice is neither whimsical, nor patently in bad faith, 

and it is not indicative of a lack of any course of reasoning 

or exercise of judgment. The burden is on petitioners to 

meet the four requirements of the Ordinance before finding 

that a prima facie case has been established, and 

respondent did not state in its written order that 

petitioners made a prima facie case. Under the whole 

record test, in light of petitioners’ inability satisfactorily to 

prove that the proposed use would not materially endanger 

public safety, we are not permitted to substitute our 

judgment for that of respondent. Accordingly, we hold that 

petitioners failed to meet their burden of proving this first 

requirement and did not establish a prima facie case.

Id. at 17, 565 S.E.2d at 19. The Court ultimately2 reversed the decision of the Court 

of Appeals and remanded for further remand with directions for the superior court to 

 

2 Having concluded that the Planning Board’s finding that the petitioners failed to 

establish a prima facie case with respect to the ordinance’s first requirement was not 

arbitrary or capricious under the whole record test, the Court was “not obligated to address 

the remaining three requirements under the Ordinance.” Mann Media, 356 N.C. at 17, 565 

S.E.2d at 19 (citing Coastal Ready-Mix, 299 N.C. at 632–33, 265 S.E.2d at 386). Nonetheless, 

“in the interests of completeness,” the Court addressed the third requirement (“that the use 

will not substantially injure the value of adjoining or abutting property”) and because the 

petitioners’ expert failed to address “adjoining or abutting properties,” the Court held that 

“under the whole record test, . . . petitioners failed to meet the Ordinance’s third 

requirement.” Id. at 18, 565 S.E.2d at 20. The Court also addressed the fourth requirement 

(“that the location and character of the use if developed according to the plan as submitted 

and approved will be in harmony with the area in which it is to be located and in general 

conformity with the Land Development Plan for Randolph County”) and determined that the 

superior court properly applied de novo review to this issue because it agreed with the Court 

of Appeals that, as a matter of law, “[t]he inclusion of a use as a conditional use in a particular 

zoning district establishes a prima facie case that the permitted use is in harmony with the 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-9-

enter judgment affirming the Planning Board’s denial of the special use permit. Id. 

at 19, 565 S.E.2d at 21. 

Here, Asheville’s ordinance provides that the “City Council shall not approve 

the conditional use application . . . unless and until it makes the following findings,” 

including, inter alia, “[t]hat the proposed use will not cause undue traffic congestion 

or create a traffic hazard.” (Emphases added.) Thus, as was the case in Mann Media, 

in order to establish a “prima facie case” for the conditional use permit under 

Asheville’s ordinance, an applicant must not only meet a burden of production—

evidence from which the fact-finder could make the requisite findings—but also a 

burden of persuasion—evidence from which the fact-finder does make the requisite 

findings.3 See Mann Media, 356 N.C. at 17, 565 S.E.2d at 19 (stating that where the 

ordinance required the Planning Board to find four factors before granting the permit, 

“[t]he burden is on petitioners to meet the four requirements of the Ordinance before 

finding that a prima facie case has been established, and respondent did not state in 

 

general zoning plan.” Id. at 19, 565 S.E.2d at 20 (quoting Mann Media, Inc. v. Randolph Cty. 

Planning Bd., 142 N.C. App. 137, 139, 542 S.E.2d 253, 255 (2001)). Yet, because the Court 

determined that the petitioners failed to establish a prima facie case as to the first and third 

requirements of the ordinance, it was unnecessary to address whether sufficient evidence 

was presented to rebut the petitioners’ prima facie showing with respect to the fourth 

requirement. Id. at 19, 565 S.E.2d at 20. 

3 Admittedly, a “prima facie case” is typically synonymous with a burden of 

production. Nonetheless, regardless of terminology, it is clear under Mann Media that when 

an ordinance specifically requires the local board to in fact make necessary findings before a 

permit may permissibly be granted, the applicant must meet more than the burden of 

production before “prima facie he is entitled to” the permit. Mann Media, 356 N.C. at 12, 565 

S.E.2d at 167.
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-10-

its written order that petitioners made a prima facie case,” and “hold[ing] that 

petitioners failed to meet their burden of proving this first requirement and did not 

establish a prima facie case.”); Owens, Land Use Law in North Carolina, at 163 

(stating that “the ordinance standards” at issue in Mann Media “required a finding 

that the use ‘will not endanger the public health or safety” and that “[t]he [C]ourt 

upheld the permit denial based on a failure of the petitioner to meet the burden of 

proof[

4] on this general standard” (emphasis added)); see also, e.g., Harding v. Bd. of 

Adjustment of Davie Cty., 170 N.C. App. 392, 394, 612 S.E.2d 431, 434 (2005) (holding 

that where Davie County’s ordinance provided that a special use permit “shall not be 

granted unless” the Board of Adjustment made the requisite findings, the Board of 

Adjustment properly placed the burdens of production and persuasion on the 

applicant). Accordingly, the City Council properly noted in its order that “[t]he 

Applicant bears the burden of proving to the City Council, by competent, material 

and substantial evidence, that the proposed Hotel meets the seven CUP standards in 

the UDO.” 

 

4 “The burden of proof includes both the burden of persuasion and the burden of 

production.” Black’s Law Dictionary 209 (11th ed. 2019); see also, e.g., Scarborough v. 

Dillard’s, Inc., 363 N.C. 715, 729, 693 S.E.2d 640, 648 (2009) (Timmons-Goodson, J., 

dissenting) (“The burden of proof in any case includes both the burden of production and the 

burden of persuasion. The burden of production, also known in North Carolina as the ‘duty 

of going forward,’ is ‘[a] party’s duty to introduce enough evidence on an issue to have the 

issue decided by the fact-finder, rather than decided against the party in a peremptory ruling’ 

such as a directed verdict or a judgment notwithstanding the verdict[.] The burden of 

persuasion, meanwhile, is the ‘party’s duty to convince the fact-finder to view the facts in a 

way that favors that party.’ . . . The burden of persuasion is also often ‘loosely termed [the] 

burden of proof.’ ” (citations omitted)). 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-11-

Following the hearing, the City Council determined, inter alia, that PHG failed 

to prove that the proposed use “will not cause undue traffic congestion or create a 

traffic hazard,” and made the following relevant findings:

8. The Property’s primary frontage is along 

Haywood Street, which borders the Property’s entire 

northern property line. The Property also has frontage 

along Carter Street, which borders the Property’s entire 

western property line, and North French Broad Avenue, 

which is the only key pedestrian street which borders the 

Property. The Hotel is oriented towards Haywood Street.

. . . .

11. Ninety percent of the existing improvements 

in the area are one and two story structures and 

approximately 72 percent of those structures are less than 

10,000 square feet. The Hotel would constitute the third 

hotel within a several block radius (approximately 1⁄4 mile). 

The addition of this third hotel would change the visual 

character of the area, and would create a cluster of hotels 

in the immediate vicinity, where there were previously 

smaller buildings and more diverse uses.

. . . .

16. There is a significant amount of pedestrian 

traffic in the area near and around the Carter Street 

Driveway.

17. The Carter Street Driveway is 28 feet wide, 

which is wider than the 24 foot driveway width allowed by 

City Standards. The Applicant obtained a modification 

from the City’s Transportation Department Director to 

allow for the wider driveway. The Transportation 

Department Director’s written decision to allow the 

modification, however, does not address the impact of the 

wider driveway on the public health and safety and there 

was no evidence presented that would indicate the wider 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-12-

driveway would provide the same level of protection to the 

public, particularly pedestrians, as a driveway which 

would comply with City requirements.

. . . .

27. There is significant traffic in downtown 

Asheville near and around the Property in September and 

October, and in the summer months. The vehicular traffic 

in the area will increase if the Hotel is constructed. 

28. The Applicant presented the testimony of a 

traffic engineer, Kevin Dean, as well as Mr. Dean’s written 

“Traffic Assessment.” The Traffic Assessment did not 

provide any facts or data which could show the level of 

traffic or traffic counts for any time of the year, except 

during a four hour period during the day on November 10, 

2016, which was a Thursday. The level of traffic in this 

area is much higher at other times of the year, particularly 

the summer months; however, there were no traffic counts 

or any traffic data provided for any date other than 

November 10.

29. Mr. Dean was not aware of the environmental 

conditions on November 10, 2016, or whether such 

conditions could have affected traffic volumes on that date.

30. The Applicant’s traffic counts were done on 

November 10, 2016 between the hours of 7 a.m. and 9 a.m., 

and between the hours of 4 p.m. and 6 p.m. Under industry 

standards, this is apparently “assumed” to be the time of 

highest traffic on nearby streets, but there was no evidence 

which could establish this would be the case for this area 

of Asheville. 

31. The number of trips generated from the Hotel 

in the Traffic Assessment was also derived from an 

industry standard, and not the actual trips expected from 

this Hotel at this location. Hotels in downtown Asheville 

have an occupancy rate in excess of 85%, but the general 

rate for an efficient market is 65%. The Traffic Assessment 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-13-

did not take this expected higher occupancy of the 

Asheville market into account. 

32. The Applicant did not submit any traffic data 

for Friday through Sunday, even though those are typically 

the days that tourists visit the City and traffic volumes are 

higher. 

33. The estimated traffic counts used for the 

Traffic Assessment and Mr. Dean’s opinion, were also these 

on a “typical weekday.” There was no weekend data 

collected, even though this is the time that most tourists 

visit the Asheville downtown. 

34. Without accurate traffic counts for any days 

other than Thursday November 10, there is no data or 

evidence to determine whether the additional trips 

generated by the Hotel (as well those from the other 

tourists which the Hotel will attract but who do not stay at 

the hotel) would not decrease the existing level of service 

to an unacceptable level. The Level of Service Summary in 

the Traffic Assessment was not based on complete 

information or data. 

35. There was no data or evidence presented that 

could show what the level of traffic would be with three 

hotels (Indigo, Hyatt and Embassy Suites) located within a 

several block area for Friday, Saturday and Sunday during 

the summer months or other high traffic periods. 

36. The Traffic Assessment did not account for 

traffic that will be generated by future hotels and 

apartments in the downtown area that are planned and 

approved, but which are not yet fully constructed and 

operational. 

37. The proposed Hotel includes a twenty-foot 

wide driveway, which provides street access to and from 

the parking structure and North French Broad Avenue.
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-14-

38. There is a blind hill with limited visibility in 

the vicinity of the Hotel’s parking deck’s entrance and exit 

onto North French Broad Avenue. To determine whether 

the addition of that entrance/exit would cause a safety 

issue would require a “sight distance check.” A sight 

distance check was not a part of the Traffic Assessment and 

no other evidence was presented to show the parking deck 

entrance or exit would not endanger driver or pedestrian 

safety. The Traffic Assessment did no analysis relating to 

traffic safety as it relates to vehicles entering and exiting 

this driveway.

39. The Hotel will have 5,000 square feet of 

meeting space, which would potentially attract visitors to 

the Hotel, other than guests staying at the Hotel. This 

meeting space use was not included in the Traffic 

Assessment nor included in the traffic analysis.

40. The Hotel would bring more than 50,000 new 

visitors to the City each year. Not all of these new visitors 

would be patrons of the Hotel, but would frequent 

downtown businesses and, therefore, add to the already 

dense downtown area. The Traffic Assessment did not 

account for any traffic caused by additional visitors, other 

than an estimate of trips by Hotel patrons and employees.

41. The Hotel parking deck would have 200 

vehicular parking spaces. The Hotel contains 185 rooms 

and will have 75 employees. There are insufficient spaces 

in the proposed Hotel parking deck to accommodate this 

number of guests and employees, even if they all do not 

drive automobiles to the Hotel.

42. There is currently a shortage of public 

parking in downtown Asheville and there are often 

insufficient parking spaces to meet the demand. The 

development of the Hotel would exacerbate the parking 

shortages in the area, because of the limited number of 

parking spaces planned in the parking deck and the 

Applicant’s failure to provide sufficient parking to 

accommodate all of its guests and employees. 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-15-

As in Mann Media, we review the City Council’s determination of whether PHG 

established a prima facie case and met its burden of proof under the ordinance under 

the whole record test, pursuant to which a finding “must stand unless it is arbitrary 

and capricious.” Mann Media, 356 N.C. at 16, 565 S.E.2d at 19. 

An examination of the record establishes that, at the hearing, PHG presented 

evidence noting that Asheville is not only “a tourist destination,” but “is the hub of 

both commercial and tourist activity in Western North Carolina” and is “defined by 

its picturesque mountainous landscape.” The report of PHG’s real estate appraiser, 

Tommy Crozier, provided that the site of the proposed hotel “has an excellent location 

across from the Hotel Indigo and the new Hyatt Place hotel,” and further that “[i]n 

the current market cycle, several large scale redevelopments downtown have been 

completed or are planned for near-term construction,” including three recently 

opened hotels and six hotels currently in development among the “[n]otable projects.” 

PHG acknowledged a concern with the proliferation of hotels in downtown Asheville, 

with its representatives stating that “[w]e know that there are questions about the 

overbuilding of hotels in downtown Asheville” and “[w]e do realize there’s a lot of 

other hotels.” PHG asserted that its proposed hotel is “a little bit different from some 

of the offerings at some of the other hotels” and addresses “an important niche in the 

hospitality of downtown Asheville” in that, in addition to its 185 rooms and its 

“detached, multi-level parking garage,” it has “5000 square feet of meeting space, that 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-16-

will, hopefully, essentially will create its own demand.” This meeting space would 

constitute “the second largest meeting space for hotels specifically in the downtown 

market area,” according to PHG, and would “help [ ] to capture additional meetings 

and events that otherwise may move to Greenville or other cities.” Crozier testified 

that “this hotel will generate somewhere north of 50,000 new visitors a year.” 

Additionally, PHG presented testimony from Kevin Dean, an engineer, who 

analyzed five intersections near the site of the proposed hotel and prepared a “traffic 

assessment” summarizing his findings. Dean’s assessment “present[ed] trip 

generation, distribution, and traffic analyses of the existing and existing + site 

conditions” and states that “all of the study intersections are expected to continue to 

operate at acceptable levels of service with only minor increases in delay” and that 

“simulations show no queuing issues at any of the study intersections or on any of the 

I-240 ramps.” At the hearing, Dean was asked about his decision to pick a Thursday 

in November to examine the potential for traffic congestion in downtown Asheville:

COUNCILMAN BOTHWELL: My question, my 

first question is, why did you pick November 10th, a 

Thursday, to do your traffic study?

MR. DEEN[5]: Traffic studies are -- traffic counts 

are only supposed to be counted between Tuesdays and 

Thursdays to get a typical weekday condition that’s not 

affected by a Monday or Friday variation. So that’s 

industry standard. We are required, typically, to only 

count on Tuesdays, Wednesdays, or Thursdays.

 

5 The transcript of the hearing misspells Mr. Dean’s name as “Deen.” 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-17-

. . . . 

COUNCILMAN BOTHWELL: I am wondering 

about the choice of November, too. I mean, we have, say, 

September and October, we have a lot of tourist traffic 

here. Summertime it’s jammed all the time. 

MR. DEEN: Sure.

COUNCILMAN BOTHWELL: And your report says 

there’s no expectation of [queuing].

MR. DEEN: Sure.

COUNCILMAN BOTHWELL: But there is also 

[queuing] at where you turn off of Montford and then go to 

North French Broad, it sometimes backs up all the way 

across the bridge.

MR. DEEN: Okay.

COUNCILMAN BOTHWELL: And, again, with 

traffic coming from the eastbound exit with -- when you get 

to that light and turn left into the hotel. --

MR. DEEN: Okay.

COUNCILMAN BOTHWELL: -- to the new 

entrance --

MR. DEEN: Sure.

COUNCILMAN BOTHWELL: -- won’t that cause 

[queuing] on Haywood Street waiting to turn into the left?

MR. DEEN: So I can’t argue with your anecdotal 

stories. What I can tell you is the amount of traffic that’s 

going to be added is only supposed to be negligible increase 

to any cues that you would see. I mean, five seconds -- five 

percent of the intersection or less. I think it’s closer to 

three percent at that intersection, which is very mild.
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-18-

COUNCILMAN BOTHWELL: Okay

MR. DEEN: So I would just go to say that it’s not 

going to cause any undue additional issues.

When asked whether his assessment took into account the current development in 

that area, including the “other hotels and other apartments, et cetera, that are either 

planned or just recently added,” Dean stated “[w]e did not.” According to Dean, any 

potential increase in traffic from other development in the area, though unaccounted 

for by his traffic assessment, would only lessen the impact of the proposed hotel. 

Dean testified:

MR. DEEN: . . . Now, like you said, there are other 

developments that would come in that would be growth 

that would be inherent to an area. But what I would argue 

would be that if we don’t include that traffic, our site will 

appear to have a greater impact than it will at those times.

So if there’s more traffic, if there’s more traffic on the 

network, then our 70 trips will be a smaller percentage 

than they are today. Does that make sense?

. . . .

MR. DEEN: Okay. And I would argue that if the 

volumes were truly higher than our site, traffic would be 

an even smaller percent than it already was.

MAYOR MANHEIMER: That doesn’t make sense. 

A member of the public, Charles Rawls, raised the issue of a potential “blind 

hill” near the hotel’s proposed parking garage, “turn[ing] from Haywood Street 

heading south on French Broad.” Mr. Dean, when asked if he had studied whether 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-19-

the entrance and exit of the hotel’s proposed two hundred space parking garage could 

adversely affect safety, stated:

I have not. We did not conduct a sight distance check, 

which is typically what’s required. But DOT typically 

requires driveways to meet certain sight distance 

requirements, whether vehicles are stopping or turning or 

making decisions, like you said, a vehicle entering a 

driveway. So DOT typically requires certain standards to 

be met. We didn’t do that because we weren’t involved in 

the actual design of the site.

The City Council also asked PHG about issues with parking, of which PHG 

acknowledged, “of course we’re aware that there are parking issues in the area.” In 

particular, the City Council asked about the capacity of the hotel’s proposed parking 

deck:

COUNCILMAN SMITH: How many spaces are 

there?

MR. OAST: 200.

COUNCILMAN SMITH: And 185 rooms and how 

many employees?

MR. WALDEN: Roughly 75.

COUNCILMAN SMITH: Where are the employees 

going to park?

MR. WALDEN: In that general area.

COUNCILMAN SMITH: Okay. So there will be an 

impact. That’s another impact. That’s helpful to know.

. . . .
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-20-

COUNCILMAN YOUNG: And approximately 75 

employees?

MR. WALDEN: Yes, Sir.

COUNCILMAN YOUNG: And the employees will 

probably park in the adjacent area?

MR. WALDEN: Yes.

PHG, which also owns the recently opened “Hyatt Place” across the street from the 

proposed hotel, confirmed that some of the Hyatt Place’s employees were using the 

site of the proposed hotel for parking:

COUNCILWOMAN MAYFIELD: Where do your 

employees who work at this Hyatt Place park? Do they 

park in that hotel’s deck?

MR. WALDEN: They park on site here at Hyatt 

Place, and then they do use part of our -- our lot right now 

across the street, as well as the -- around the surrounding 

area.

. . . . 

COUNCILMAN YOUNG: So when it’s built, if it’s 

built, the adjacent -- the parking that your employees use 

across the street now will go away.

MR. WALDEN: Yes.

COUNCILMAN YOUNG: And on top of that will go 

away, you would also incur parking from the current 

employees that will be employed by the Embassy now. So 

the people across the street parking would lose their 

parking now, and the current employees would also have 

to find parking.
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-21-

MR. WALDEN: Yes, sir, but in a very limited 

capacity.

. . . .

COUNCILWOMAN MAYFIELD: I’m not hearing 

you say directly that you will provide parking for all of you 

employees in that -- in that deck.

And so the concern is that this -- this hotel would be 

adding to the -- would be bringing more people there on a 

daily basis, the workers who work at the hotel --

MR. WALDEN: Right.

COUNCILWOMAN MAYFIELD: -- and not provide 

them a place to park, which would make parking in that 

area even more difficult.

MR. WALDEN: Sure.

COUNCILWOMAN MAYFIELD: So that’s a 

concern.

MR. WALDEN: Sure.

COUNCILWOMAN MAYFIELD: Is that a valid 

concern, or can you tell us that you[r] employees will have 

a place to park in that deck on a regular basis and will not 

be adding to the already overloaded shortage -- that’s not -

- adding to the shortage of parking that’s already there.

MR. WALDEN: I do not feel that our employees 

would add to that burden. I feel that it’s sufficient within 

the amount of spaces that we have. With valet and a 

number of spots, I do not feel that it would add an 

additional burden to the parking situation.

In my view, the City Council’s finding that PHG failed to establish that the 

proposed use “will not cause undue traffic congestion or create a traffic hazard” “is 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-22-

neither whimsical, nor patently in bad faith, and it is not indicative of a lack of any 

course of reasoning or exercise of judgment.” Mann Media, 356 N.C. at 17, 565 S.E.2d 

at 19. Rather, the City Council’s decision was based on legitimate concerns that were 

insufficiently addressed by PHG’s evidence, including the exacerbation of the 

acknowledged parking issues in the area, the potential hazard created by the hotel’s 

driveway, and the impact of recent and planned hotels and other developments on 

traffic congestion in the area, which was not considered in Mr. Dean’s traffic 

assessment. 

In that latter respect, Mr. Dean suggested that any traffic congestion 

unaccounted for in his assessment would only lessen the proposed hotel’s impact on 

traffic because the hotel’s impact would then amount to a smaller percentage of 

overall traffic in downtown Asheville. This assertion, however, does not address what 

is required by the ordinance. For example, it does not address whether Mr. Dean’s 

earlier conclusions that “study intersections are expected to continue to operate at 

acceptable levels of service with only minor increases in delay” and that “simulations 

show no queuing issues at any of the study intersections” would be affected when the 

impact of the proposed hotel is assessed in conjunction with the realities of the traffic 

impact from the major developments not considered by Mr. Dean’s assessment.

Moreover, Mr. Dean also failed to explain why it was appropriate to use a 

Thursday in November to examine the potential for traffic congestion in downtown 

Asheville, “the hub of . . . tourist activity in Western North Carolina.” While the 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-23-

majority assigns some talismanic quality to Mr. Dean’s assertion that this was an 

“industry standard,” Mr. Dean never elaborated on the nature of this standard or, 

more importantly, explained why this undefined “industry standard” was an 

appropriate method of addressing the specific requirement in this municipal 

ordinance—that is, whether the proposed hotel in downtown Asheville, along with its 

“detached, multi-level parking garage” and “5000 square feet of meeting space, that . 

. . will create its own demand,” will cause undue traffic congestion or create a traffic 

hazard. Absent such an explanation, it was not arbitrary or capricious for the City 

Council to find unpersuasive the use of a weekday in November to assess potential 

traffic congestion in downtown Asheville. 

The majority, noting that “[w]hen an applicant has produced competent, 

material, and substantial evidence tending to establish the existence of the facts and 

conditions which the ordinance requires for the issuance of a special use permit, 

[p]rima facie he is entitled to it,” Humble Oil,

6 284 N.C. at 468, 202 S.E.2d at 136, 

 

6 In Humble Oil, the Court determined that the Board of Alderman’s denial of the 

petitioner’s permit application must be set aside because the Board did not refer the 

application to the Planning Board for review before acting on it, as required by the ordinance. 

Humble Oil, 284 N.C. at 466-68, 202 S.E.2d at 135–36. The Court did not address whether 

the petitioner met its prima facie burden and the Court’s only references to “de novo” were in 

its statements that on remand the Board of Alderman must “consider Humble’s application 

De novo.” Id. at 471, 202 S.E.2d at 138. The Court did “deem it expedient” to also address 

on appeal the Board’s finding that the proposed use “would materially increase the traffic 

hazard and danger to the public at this intersection” and to determine whether the finding 

“is arbitrary in that it is unsupported by competent, material, and substantial evidence.” Id.

at 468, 202 S.E.2d at 136. The Court determined that the anecdotal evidence purportedly 

supporting this finding was “unsupported by factual data or background,” and therefore 

incompetent and insufficient to support the finding. Id. at 469, 202 S.E.2d at 136. Unlike 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-24-

asserts that PHG was only required to meet a burden of production to establish a 

prima facie case. This ignores the plain language of Asheville’s ordinance (“The 

Asheville City Council shall not approve the conditional use application . . . unless 

and until it makes the following findings” (emphases added)), which, like the 

ordinance in Mann Media, places the burden of persuasion on the applicant, requiring 

the applicant to prove to the fact-finder—here the City Council—each of the necessary 

standards. See Mann Media, 356 N.C. at 17, 565 S.E.2d at 19 (stating that “[t]he 

burden is on petitioners to meet the four requirements of the Ordinance before finding 

that a prima facie case has been established, and respondent did not state in its 

written order that petitioners made a prima facie case,” and that “petitioners failed 

to meet their burden of proving this first requirement and did not establish a prima 

facie case”). In other words, “the facts and conditions which the ordinance requires 

 

the Asheville City Council’s finding here that PHG did not meet its prima facie burden 

because it “failed to produce competent, material and substantial evidence that the Hotel will 

not cause undue traffic congestion or create a traffic hazard,” which is based on the absence 

of evidence, the Board of Alderman’s finding in Humble Oil is an affirmative finding (“would 

materially increase the traffic hazard and danger”) purporting to be based on evidence in the 

record contrary to the petitioner. The significance of this distinction is illustrated in Mann 

Media, in which the Court held that the Planning Board’s affirmative finding “that ice has 

formed and fallen from the other towers . . . and is likely to do so from the proposed tower, 

and would therefore materially endanger the public safety” was based on anecdotal hearsay 

and not supported by competent evidence; yet, the Court held that in light of the petitioners’ 

inability to state with sufficient certainty that there was no danger from “the potential of ice 

falling from support wires of the proposed tower,” under the whole record test, the Planning 

Board’s “finding that petitioners failed to establish that there would be no danger to the 

public from falling ice is neither whimsical, nor patently in bad faith, and it is not indicative 

of a lack of any course of reasoning or exercise of judgment.” Mann Media, 356 N.C. at 16–

17, 565 S.E.2d at 19 (emphases added). 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-25-

for the issuance of” the permit are that the City Council specifically makes the seven 

relevant findings, including that “[t]hat the proposed use will not cause undue traffic 

congestion or create a traffic hazard.” 

Moreover, the majority ignores that under Mann Media, the City Council’s 

determination of whether PHG established a prima facie case is reviewed under the 

whole record test, pursuant to which “we are not permitted to substitute our 

judgment for that of respondent.” Id. at 17, 565 S.E.2d at 19; see also id. at 17, 565 

S.E.2d at 19 (stating that “[u]nder the whole record test, [a] finding must stand unless 

it is arbitrary and capricious” and that the Planning Board’s “finding that petitioners 

failed to establish that there would be no danger to the public from falling ice is 

neither whimsical, nor patently in bad faith, and it is not indicative of a lack of any 

course of reasoning or exercise of judgment.”). Instead, the majority erroneously 

applies de novo7 review and substitutes its own judgment for that of the City Council. 

 

7 Notably, the legislature recently amended N.C.G.S. § 160A-393(k), providing that 

“[w]hether the record contains competent, material, and substantial evidence is a conclusion 

of law, reviewable de novo.” PHG contends that this “clarifying” amendment renders the 

appeal moot because it answers “[t]he central question” here of “what standard of review 

applies to a municipality’s denial of a conditional use permit when the denial is based on an 

alleged failure to present a prima facie case.” Yet, the question of “[w]hether the record 

contains” a sufficient quantum of evidence is an inquiry into a party’s burden of production. 

Asheville’s ordinance, like the ordinance in Mann Media, specifically requires the applicant 

to meet a burden of persuasion, mandating that the “City Council shall not approve the 

conditional use application . . . unless and until it makes the following findings.” (Emphases 

added.) Thus, as in Mann Media, the “prima facie case” in this particular context requires 

an applicant to meet, not a burden of production (i.e. producing evidence from which the City 

Council could find that the proposed use will not cause undue traffic congestion), but a burden 

of persuasion (producing evidence from which the City Council does find that the proposed 

use will not cause undue traffic congestion). The City Council’s finding in this respect is 
PHG ASHEVILLE, LLC V. CITY OF ASHEVILLE

Earls, J., dissenting

-26-

“The ‘arbitrary or capricious’ standard is a difficult one to meet.” Id. at 16, 565 

S.E.2d at 19. Because the City Council’s finding that PHG failed to prove that the 

proposed use will not cause undue traffic congestion or create a traffic hazard “is 

neither whimsical, nor patently in bad faith, and it is not indicative of a lack of any 

course of reasoning or exercise of judgment,” it is not arbitrary or capricious and 

therefore “must stand.” Id. at 16, 565 S.E.2d at 19.8 As such, the Court of Appeals 

and superior court should be reversed, and the decision of the City Council denying 

the conditional use permit should be affirmed. Accordingly, I dissent. 

Justice HUDSON joins in this dissenting opinion.

 

reviewed under the whole record test. Mann Media, 356 N.C. at 17–18; 565 S.E.2d at 20.

8 Because PHG failed to prove this requirement of the ordinance, it is unnecessary to 

address the remaining requirements. Mann Media, 356 N.C. at 17, 565 S.E.2d at 19 (stating 

that “petitioners failed to meet their burden of proving this first requirement and did not 

establish a prima facie case,” and that “[b]ecause of this holding, we are not obligated to 

address the remaining three requirements under the Ordinance”).