News

Developer's lawsuit accuses city of 'whimsical, willful and unreasonable' denial of rezoning

An exhibit shows higher density developments surrounding the Haywood Road site proposed for 5.5 unit/acre development.

By Bill Moss, Published: March 10, 2026

The developer whose plan for a 180-unit rental community on Haywood Road near Blythe Street was denied by the Hendersonville City Council in a unanimous vote is suing the city, claiming the decision was arbitrary and capricious and unsupported by state law.

"A lawful business or use of land cannot be made subject to the unguided discretion of city councils or zoning boards where its establishment in a community is determined by whether the decision-makers believe such business or use to be in the public interest, serves the public welfare, is otherwise suitable or satisfies the purpose or intent of some vaguely worded land plan or rule," said the lawsuit filed Monday by attorney Craig Justus on behalf of Advenir Azora Development LLC.

“A zoning decision is arbitrary and capricious when it ignores fundamental zoning concepts, or when it is whimsical, willful, and an unreasonable action without consideration or in disregard of facts or law or without determining principle,” the plaintiff said.

Alerting the media to the lawsuit last week, the city vowed to fight the action.

"Our legal team is reviewing the complaint and the city of Hendersonville intends to vigorously defend the City Council's right to make local land-use decisions," City Manager John Connet said in a statement.

Although the Miami-based developer renamed the proposed apartment complex LEO of Hendersonville, for Love Each Other, it could not overcome the massive uprising of homeowners who overflowed rooms during two planning board hearings and a city council meeting. The council voted unanimously on Jan. 7 to deny the rezoning request following the planning board's vote, also unanimous, to recommend its rejection.

"This project is called LEO, Love Each Other of Hendersonville, right?" Mayor pro tem Jennifer Hensley told the developers in the Jan. 7 meeting. "And so to come in here and make disparaging and disrespectful comments to my neighbors is shameful and I don't appreciate it."

The conditional rezoning process the developer was guided to use “inevitably left Advenir’s rights concerning the free use and enjoyment of land to the whims of the city leaders to withhold approval for any reason,” Justus said. “Ultimately, city leaders rejected Plaintiff’s plans for pretextual reasons, advancing their political interests” and deciding the case in a way that was “not supported by any objective development standards or by competent or substantial evidence in the record.”

The lawsuit made these other points:

• "The city is experiencing significant growth or a population boom that has highlighted and exacerbated the need for housing. The City’s lack of housing supply, especially what is called 'Missing Middle housing,' greatly influences the affordability of housing."
• “'Missing Middle housing'” refers to small-to medium sized homes that are available at various price points, which are often part of infill  development. Examples of Missing Middle housing include duplexes, triplexes, quadraplexes, cottage courtyards, townhomes and small-scale apartments."
• "Advenir’s business substantially involves developing Missing Middle housing."

"City ordinance," the developer continued, "confines most forms of Missing Middle housing such as triplexes and quadraplexes to limited commercial zones outside growing residential areas or in what is called a planned residential development conditional zoning district. ... Effectively, the City funnels all new Missing Middle housing developments on tracts such as (the Haywood Road property) through the gauntlet of conditional rezoning in the form of a PRDCZ District (planned residential development conditional zoning district)."

In July 2025, Advenir submitted an application to rezone the land from R-15 to the PRDCZ District in order to develop on a community of 180 duplexes, triplexes and quadraplexes — a density of 5.74 units per acre. Meetings with city planners and neighboring homeowners “led to substantial modifications to the project plans, including greater building setbacks, more buffers and a reduction in the number of proposed units from 200 to 180,” the lawsuit said. Although “multiple neighbors objected to the project based on traditional ‘Not in My Backyard’ complaints" …city planners during that time “communicated support for the project and the conditional rezoning.”

The developer, meanwhile, “incurred substantial expenses in engineering and site design fees in modifying its plans to accommodate staff’s wishes, and to provide requested documentation, including traffic impact studies.”

The development plan complied with all city planning ordinances and was approved by the city fire marshal, the plaintiffs said.

“Advenir contends that the City ordinances are illegal or invalid for violating on their face or as-applied various State statutes and the North Carolina Constitution,” the lawsuit said. “The City disagrees.” The developer also contends the rezoning “was arbitrary and capricious,” and the the City disagrees with that, too.

Citing numerous legal precedents, the developer says the city’s decision went beyond its regulatory authority.

“In a city that shares the same or similar characteristics of the City in terms of size and population, local government must reasonably accommodate housing including Missing Middle housing; such a city has no authority to ban such use or establish unreasonable or unnecessary restrictions against same,” Justus said “Expressly funneling Missing Middle housing in the form of triplexes, quadraplexes, etc. or housing of 51 or more units through conditional legislative rezoning decision giving the City unlimited authority to reject any such application for any reason is inimical to the concept of the consent of the property owner, which denotes making a choice not brought on by duress or lack of viable options.”

“The city’s zoning ordinance creates an arbitrary funnel for Missing Middle housing through conditional zoning, which places plaintiff’s use of property and business totally at the arbitrary or despotic will of officials without a general or uniform rule applicable to all alike, where a rezoning application can be refused for any reason,” the lawsuit said.

The city’s claim that the project is “incompatible due to so-called 'extensive grading'” is unsupported by evidence and, besides, “much of the ‘grading’ was the product of accommodating city staff wishes for the location of roads, walls and buildings and to more protect Britton Creek.”

Justus asked the court to provide “declaratory and injunctive relief,” declare the city conditional zoning mandates in its zoning ordinance invalid and unenforceable, grant attorneys’ fees and charge the cost of the action to the city.