The Fayetteville Planning Commission on July 14 voted to modify a conditional use permit so the Peter Smith House may be used as a guest house for residents of a proposed cluster housing development, rather than exclusively for nonresidential or public use. The motion passed unanimously. Jesse Masters, the city planner on the item, told the commission the change would not make the overall project incompatible with the surrounding neighborhood and staff supported the amendment as proposed.

The modification would allow the historic Peter Smith House — a residence listed on the National Register of Historic Places — to be used by residents of the cluster development as a guest house rather than being limited to nonresidential or public functions. Masters said the applicant represented that parking for the use will be accommodated within the overall development, and staff will monitor and enforce any illegal short-term rental (STR) activity separately.

Attorney and applicant representative Brian Teague said the developer prefers to renovate the structure using residential building standards because consultants advised that meeting nonresidential building requirements could require demolition and complete reconstruction. "We'd prefer to invest into the historic house by remodeling it into a guest house for future residents of the neighborhood to use at certain times," Teague said. He and property owner and developer Ted Belden attended the meeting.

Commissioners pressed for limits on the use. Commissioner Garlock asked whether the guest house would be available only to residents of the development; Teague said the applicants were "okay with that." Masters said the approval will require a private agreement that limits use to residents, and the city will not enforce that private agreement but needs it on record as a condition of approval.

Commissioner Madden asked whether the homeowners association would maintain ownership; the applicant confirmed that it would. Commissioner Payne asked whether the house could become an STR; Masters said if the structure is not advertised and is limited to residents, it would not meet the city's definition of an STR, though she said she would review STR classifications further.

The motion to approve ADM 2025-010 — to amend CUP 2024-016 to permit the Peter Smith House to be used as a guest house for residents and to adopt the staff-recommended conditions — was made by Commissioner Warner, seconded by Commissioner Casten, and carried by recorded voice votes with all voting "yes." The conditions require the guest house to be limited to residents of the cluster development and require the applicant to file the private agreement limiting use.

The commission's approval preserves the property in place and allows the developer to renovate under residential building standards while committing on the record to limit the structure's use to residents. The project is located on North Crossover Road in east Fayetteville; Jesse Masters handled the staff presentation and Brian Teague represented the property owner and developer at the hearing.

Less urgent details: the conditional use permit modification applies only to the Peter Smith House parcel within the larger cluster development; staff noted ongoing construction on six of the planned 14 homes on the site. The city and the applicant will track compliance through the recorded conditions and standard building permit inspections.