Since its 1989 incorporation, Leland, North Carolina wasn’t considered much more than a bedroom community for Wilmington. Many city dwellers saw little value in the land across the river, calling it L.A., for Leland Area, a nickname playfully mocking its less-than-dazzling draw.
But developers knew outsiders would be drawn to the cheaper land outside the city. And they were right.
Leland’s population more than tripled between 2000 and 2010, to 13,500. It nearly doubled again the following decade, to 23,900, and added another 5,700 people since. It was the state’s fastest-growing municipality in the past decade, and Brunswick was the state’s fastest-growing county.
Annexation—the process of adding new land into town limits—was a way for Leland to have some say in the development happening on the town’s outskirts. It also helped cement Leland’s reputation as a big-bad growth machine.
A deal with Brunswick Regional Water & Sewer H2GO, also known as H2GO, helped fuel Leland’s latest annexation spree—the fifth-most adopted across the state’s 550-plus municipalities over the past two years. Last year alone, Leland expanded its limits by 27 percent by adding about 3,740 acres.
But all of that land-gobbling came to a stop this summer when the area’s most powerful state lawmaker, Sen. Bill Rabon, championed legislation banning Leland from annexing any more land.
Rabon had heard from concerned neighbors that the town was crawling too far into rural areas, and he philosophically opposed the mechanism Leland was using to get there: exchanging annexation for access to water and sewer lines the town jointly owned with H2GO.
Stripping the town of its annexation power was unprecedented. Some town officials felt it was punitive. “It’s just wrong,” Leland Mayor Brenda Bozeman wrote in an email after a key vote in June.
Since the moratorium, Leland has continued to enforce its arrangement with H2GO: Properties in a large area outside town limits can’t access utilities without annexation—even though the town can’t annex them.
The utility stalemate has left some projects in limbo. It likely represents a legal timebomb—unless the region’s longtime adversaries can work something out.
Leland v. Everybody Else
Leland’s annexations have helped beef up its tax base. But they started to worry the town’s rural neighbors in the past few years.
After Leland in late 2021 published a long-range planning map that showed its boundaries extending far beyond town limits, 1,140 people in a nearby rural community known as Winnabow signed a petition to form their own town to avoid annexation.
“Rampant growth with considerably higher taxes is moving down [U.S.] 17 rapidly,” Winnabow’s volunteer fire department warned in a social media message urging residents to sign the petition.
Whether or not the threat was real, Winnabow’s 2022 incorporation attempt sent Leland a clear message: Don’t come any closer. (Leland maintained that the fears were unfounded, as it only annexed property at an owner’s request.)
Notably, Rabon, a Southport Republican who represents Brunswick County, has a farm in Winnabow that he and his brother inherited from their father.
The Winnabow petitioners’ plans haven’t materialized because a state commission last year found its plans weren’t financially salient. But the area’s incorporation would add to an already crowded municipal landscape.
Brunswick is already broken up into 19 different municipalities, more than any other county in the state. On one 11-mile stretch of U.S. 74, you’ll pass five. Three of them mostly keep to themselves, but Leland and Belville have been sparring since their inception.
Leland may be bigger, but Belville was first.
Belville became a town in 1977 so it could add a liquor store—back then, residents had to drive into Wilmington to buy booze. Leland didn’t yet exist, and Belville was only a tiny riverfront stop off the highway into Wilmington.
When Belville moved to annex a collection of inland businesses off Village Road into its limits in 1989, nearby residents decided to hold a vote to make an adjoining area their own municipality and take the stores themselves.
Belville’s annexation vote took place an hour and a half before the polls closed for Leland’s incorporation bid; in the end, Leland got its own town, and after the first of many court battles, also picked up the business district Belville wanted.
The irony to Leland’s origin story isn’t lost on its foes: uniting to avoid annexation, and now kneecapped amid accusations of doing just that to others.
The northern Brunswick governments, including Leland, Belville, and sometimes nearby Navassa, have held countless merger discussions over the years, but deliberations always fell apart.
“They want us to merge with them,” said Belville Mayor Mike Allen. “They want us gone.”
In a statement, town spokesperson Jessica Jewell said Leland “has long held the position that regional cooperation is in the best interest of all the citizens of northern Brunswick County.” The town remains open to merger discussions, she said.
After the towns both tried to annex the same neighborhoods, they entered a settlement agreement in 2003 to corral their respective annexation territories. In December, that settlement will expire.
Belville officials over the years have cited the settlement as the reason their smaller town has been boxed in, while Leland blossomed. Allen said he’s got several developers teed up for projects that could become part of the town once it expires.
That includes an unincorporated, triangle-shaped parcel on Highway 17 designated as neutral in the 2003 settlement agreement—meaning either town could annex it—that Novant Health would like to use to build an outpatient surgery center. It’s one of the last wooded lots in a heavily developed commercial stretch.
Allen said Novant wanted the site annexed into Belville, since it’s surrounded by town limits.
There’s just one problem: Leland says it owns the utility lines that extend to the parcel.
Under the current deal with H2GO, Novant officials had to ask Leland for access to water and sewer, and join town limits. Novant was in the middle of Leland’s approval process when the annexation moratorium became law in July.
Ever since, Novant has been given conflicting messages about whether it can access utilities.
H2GO Director Bob Walker first told Novant representatives that while the utility and Leland are independent, “Leland is responsible for deciding whether or not” the project can connect to the service lines, per their interlocal agreement.
For the Belville mayor, that seemed wrong. “If they want to come with us, you’re not going to give them water and sewer?” Allen said. He said he threatened to sue H2GO for withholding utilities from Novant.
Two months later, the towns are still at an impasse. A Novant spokesperson said it is considering its options.
For Leland critics, the situation is evidence of the town’s megalomania.
A proposed townhome project by national builder Pulte Homes off N.C. 133 appears stuck in the same quandary. They can’t join Leland due to the annexation moratorium, so they can’t access utilities.
When the settlement agreement expires in December, the property could freely join Belville. But as things stand now, that doesn’t mean they’d get utilities.
Rabon the Referee
Sen. Bill Rabon says he tried to give Leland a warning at first. He’d been hearing complaints about the town from residents around the county.
Senate Bill 911, which Rabon introduced in May 2022, placed a cap on the size of annexations and reduced how far land could be from core town limits in order to be annexed. Rabon said he was looking out for concerned neighbors and opposes “forced annexation.”
Nearby communities “feared they were going to be taken over,” Rabon said. “In fact, other than those developing the land, not one citizen has come to me and asked to become part of Leland.”
He said he was concerned the town was being “overly aggressive in their tactics” and was concerned by its annexations of properties far outside town limits. “Everyone next door felt they were next,” he said.
As soon as that first bill was introduced, Leland staff realized they’d need to ensure potential annexations already in the pipeline could get through in time. The bill passed unanimously in the Senate, and with almost no opposition in the House, it took effect June 30, 2022. But Leland continued annexing at a rapid pace, fueled by its annexation-for-utilities barter.
“Leland kept pushing, and pushing, and pushing. And you don’t do that to Senator Rabon,” said Mike McGill, a former consultant and founder of the firm Water PIO, which previously worked with Belville and H2GO. “They messed around and found out.”
One month after Senate Bill 911 passed, Leland bought an undeveloped, unincorporated 27-acre parcel of land that straddles I-140, which it said will be used for conservation and utilities. But the skinny parcel behind the Seabrooke subdivision also connected the town to a 2,120-acre project off Malmo Loop Road that was slated for a 4,000-unit development.
Its owners include Anthony Saffo, a former estate planning attorney, who soon applied to be annexed into Leland. Without Leland’s new narrow connecting piece, the site would have been too large under Rabon’s new rules to be welcomed into town.
Rabon saw the Malmo maneuver as defiant. He said it left him with no other option but to strip Leland’s annexation power entirely. So in May he added moratorium language to a blank bill he’d previously filed, Senate Bill 79, which was later tacked onto House Bill 267.
“Leland, knowing full well what the intent of that legislation was, pulled a bait and switch,” he said.
Leland rejects Rabon’s interpretation.
Town spokesperson Jewell explained its purchase of the 27-acre parcel was part of a plan already in motion with H2GO to purchase woodlands and wetlands in the area to secure a utility right-of-way and well sites. Before Rabon filed either of his bills, the town had already acquired three other parcels nearby totaling 175 acres.
The 27-acre parcel was listed for sale two weeks after Rabon filed Senate Bill 911. “The opportunity to connect all these properties into a large conservation area presented itself, while also satisfying the utility needs,” Jewell said. “To say the Town acquired any of these properties for the purpose to be able to annex [the Malmo property] is incorrect.”
But Rabon said he saw the purchase “for what it was”—and that Leland’s actions “validate the concerns that everyone has been expressing all along.”
“It boils down to this: Other local officials and members of the public are overwhelmingly not happy with the way the town of Leland is going about things,” he said. “And while this can and should be all handled locally, no one has been willing to take the bull by the horns. Someone had to.”
In July, House Bill 267 passed along party lines in July, with several Democrats supporting it, over the town’s objections.
After the moratorium was enacted, Rabon finally had a sit-down with the north Brunswick leaders. His message to them was clear: Stay out of court and fix this mess.
“‘Why can’t y’all sit down at the table, and act like grownups and resolve this?’” Rabon told the group, Belleville mayor Allen recalled.
Several participants in the meeting said Rabon went so far as to tell them H2GO, Belville, and Leland could all “go away.” (Rabon says he doesn’t recall saying that.) “I think he was just trying to get a point across,” Allen said. “The state does have the power.”
If everyone behaves, Rabon said he could revisit the moratorium. “But they all [have] to get in the same sandbox and learn to play together first,” he said. “I’m optimistic that message was received.”
Since Rabon refereed that meeting, the region’s administrative heads have been negotiating to avoid yet another lawsuit. But everyone brings baggage to the table, as H2GO’s chair Ronnie Jenkins acknowledged.
“We all want basically the same thing,” he said. “But the trouble is, I don’t think we truly know how to get there.”
Annexation at What Cost?
For decades, North Carolina’s annexation rules were among the loosest in the nation.
State laws allowed cities and towns to beef up their tax base fairly easily, even in the face of opposition. The legislature did away with involuntary annexation a little more than a decade ago, and the vast majority of annexations since have been with property owners’ consent.
But Scott Mooneyham, spokesperson for the N.C. League of Municipalities, said he couldn’t find another recent example of the legislature removing a specific local government’s ability to annex entirely. The league opposed both of Rabon’s bills.
“If cities and towns cannot reflect their urban footprint, what happens over time is that puts more taxing pressure on those that are still within the incorporated boundary,” Mooneyham said. “More and more of them leave, that just ratchets up the pressure on those that remain. And it’s just a feedback loop. It’s a continual feedback loop that ultimately destroys the municipal core.”
Leland argues the legislation restricts the property rights of those who want to join town limits.
“In recent years, landowners have voluntarily annexed into Leland to take advantage of the quantity, quality, and highly efficient level of service the Town provides,” a town spokesperson said in a statement. “From excellent police and fire service, public utilities, street maintenance, and the quick turnaround for plan reviews and building inspections, landowners see the great value of being a part of Leland.”
The Brunswick County Democratic Party also says the new law “adds to state power, while curbing local government control.”
Not all annexations are benevolent.
Christopher Mothorpe, economics chair at the College of Charleston’s School of Business, and co-authors produced the first empirical analysis of how towns battling one another impacts which properties get targeted for voluntary annexation in 2021. The study, which focused on Charleston, yielded “the most compelling evidence yet that political motivations play a major role in the annexation behavior of cities.”
“There are some weird-looking cities out there, where clearly they went after the new shopping center,” Mothorpe said. “Or the city will annex part of a highway just so they can give speeding tickets there.”
In northern Brunswick County, shops within the same commercial center, Waterford, are split between Belville and Leland. Commercial tenants with similar spaces pay higher taxes in Leland to support the town’s more robust services.
Dana Fisher, executive director of the North Brunswick Chamber of Commerce, said she doesn’t typically field complaints about cost or service differentials, nor do the irregular boundaries seem to bother people.
“Most of the people that want to come here, they’re here from up north … They’re looking at compared to what’s up there—a lower tax rate here,” she said. “There’s plenty of land here. We’re close to everything.”
If Leland wants to smooth its borders now, it’ll have to pass Rabon’s test.
Johanna Still is The Assembly‘s Wilmington editor. She previously covered economic development for Greater Wilmington Business Journal and was the assistant editor at Port City Daily.