Ethics card plays in final hand of zoning overhaul; councilman turned developer will sit out
zoning overhaul decision for his district.
Sunday, September 12, 1999
By Frank Morris
Carolina Morning News
The reshaping of development rights across Ward 1 by the Hilton Head Island Town Council will come without the
vote of its representative.
To avoid a conflict of interest with his development business, Councilman Bill Ferguson has decided he must step
aside when the council redraws land-use zoning districts for his north-island ward.
The plan, in the making since 1994, goes before the council Sept. 21 for a preliminary vote. The town Planning
Commission has recommended approval over objections by Ward 1 community leaders and landowners who said at recent
hearings it would set too many development limits.
Ferguson -- who also opposes the zoning plan's final draft -- said last week he would give up his vote to follow
advice from informal State Ethics Commission opinions he sought.
"I can't support the Ward 1 plan the way it's written, anyway, and I don't think the Town Council is going
to make any changes in it, anyway," he said.
"To me, the whole Ward 1 plan is so darn restrictive, I was really reluctant to vote on it in the first place,"
he said. "It's not good for the residents of the Ward 1 community. I'm really disappointed."
A councilman for nearly six years and a candidate for re-election Nov. 2, the native islander started Ferguson
Community Development in June after stopping work in landscaping.
When he made the business shift, he pledged he would comply with state ethics law by declaring interest conflicts
and excusing himself from discussions and votes on any matters that might directly benefit himself or clients.
Since then, he has been retained as an adviser by developer C. Wayne Kinser's Peppertree Inc., which does timeshare
condominium and other projects. The Asheville, N.C., developer owns property in the Mitchelville community off
Beach City Road. It is in the Port Royal Sound area designated for Ward 1 rezoning as a Waterfront Mixed-Use district.
"He's looking to do a resort development," Ferguson said. Toward that end, Kinser is trying to form joint
ventures or partnerships with native-islander landowners in the Mitchelville area.
When Kinser became his first and so far only client in Ward 1, Ferguson said he informed Town Manager Steve Riley
and other town officials in order "to keep it above board." He also sought to clarify "the full
ramifications of the state ethics law."
In a letter to the ethics commission, Ferguson said that since July he had entered the agreement with Kinser to
work as an adviser and consultant. "In this capacity, I actively seek clients for developers for the purpose
of connecting various development companies with potential property owners. Thus far, I have contacted and have
been contacted by several property owners and developers in the Hilton Head Island and outside areas," he
wrote.
Ferguson noted he understood he should not engage in council discussions or votes on any project or subject in
which he has an economic interest. He then requested an opinion on this question: "Is it a conflict for me
to participate in the present and future Ward 1 planning process as a Town Council member, even though I do not
have a contract with any property owners other than Mr. Kinser, to date. If so, to what extent?"
Herbert Hayden Jr., the commission's executive director, responded with an informal opinion dated Aug. 9. Hayden
advised Ferguson the ethics law would prohibit him from any council deliberations in which he, Kinser or any other
client has an economic interest.
What about other members?
Ferguson then requested a second opinion on the broader question of whether a conflict would arise if any councilman
doing business in Ward 1 deliberates or votes on the Ward 1 zoning ordinance or any other Ward 1 matter.
The query did not identify a particular project or name any other council member. But last week he said he wondered
how the ethics requirements might apply to Mayor Tom Peeples or Ward 4 Councilman Steve DeSimone, since Ward 1
changes potentially could benefit their construction businesses.
In a Sept. 2 response, Hayden said the law would prohibit any council member from participating in actions that
would economically benefit them, a family member or a business associate. However, he added, "the single fact
that a council member 'operates or performs a business' within Ward 1 is not in and of itself a conflict. The conflict
attaches only if that business has an economic interest in the outcome of a Town Council action."
Neither Peeples nor DeSimone could be reached for comment. The mayor was out of town Friday and Saturday and DeSimone
did not return messages.
Ferguson said similar ethics questions revolve around council action on redevelopment initiatives being considered
for the Pope Avenue and Palmetto Bay Road corridor. He said that he, Peeples or DeSimone also might get new work
from that effort.
"Can anyone actually begin the planning process of a zoning district or, in this (other) case, a redevelopment
district and later on go in and conduct business that we are creating?" Ferguson said.
"I think they need to go and get their own opinion, if they intend to do business in the area," he said.
"They may not intend to do business there," he said. "But if those signs (for their companies) start
appearing up on buildings and construction sites later on, after this thing has passed, then I think it should
be questioned if they go ahead and deliberate and Vote."
Hayden and the town manager each said Friday the mayor and DeSimone's situations would not be comparable to Ferguson's
unless they also had known and direct economic interests in proposed land-use changes. Riley said Ferguson was
the only council member who had identified a potential conflict or sought an ethics opinion regarding Ward 1 or
other zoning issues.
Triggering the ethics requirement would take "some identifiable economic interest in the outcome of the action
before council," Hayden said from Columbia. "I don't think you can speculate and say that someone may
sometime in the future gain a benefit from something, if they have no direct relationship with that issue at the
time of the vote."
He said a building contractor would have no conflict voting on the plan simply because it might bring new development,
since "he has no way of knowing when the vote takes place that he's going to be offered an opportunity to
build in that area."
Riley said, "In Bill's case, he has a client right now that is a specific developer of a specific type of
development in a specified location where, if the Ward 1 zoning isn't passed, that use would not be allowed."
Ferguson said he was unclear on whether he still could join council debate on elements of the Ward 1 plan other
than the proposed Waterfront Mixed Use districts. But, "I would certainly think so, because I don't have a
conflict or any contracts (involving other areas.)"
Hayden said Friday that would only be proper if the council extracted the waterfront development issue for a separate
vote. Otherwise, "as long as he has an interest in any part of that project or plan, then he cannot participate."
While he won't be voting on the zoning plan, Ferguson said his involvement with Kinser promotes his goals of furthering
economic development for Ward 1 landowners.
He said he advocates joint ventures that will allow native island property owners to retain interests in their
lands while gaining profits for extended periods of time and maintaining their cultural heritage.
"I'll make damn sure that what Mr. Kinser does and his organization does is in line with what I advocate,
or I won't have a contract anymore," Ferguson said.