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Pelham staff recommends revoking Seagull/Segal Select’s license after audit finds long-term, apartment-style occupancy; residents warn of displacement
Summary
City staff presented audit data showing extensive long-term stays and apartment-style marketing at the property operating at 1902 US Highway 31 and recommended revocation of its hotel license; the business’ attorney challenged procedure and residents — including domestic violence survivors — said revocation would displace vulnerable people. The council held the hearing and took no final vote on revocation in this meeting.
Assistant City Manager Justin Smith told the Pelham City Council on April 23 that an audit of the property licensed as a hotel at 1902 US Highway 31 (identified in city materials as Seagull/Segal Select Birmingham 2) found evidence the operation has large numbers of non‑transient occupants and marketing consistent with residential occupancy.
"Some guests and residents have appeared to stay as long as 14 years," the city’s finance presentation said, and staff reported that non‑transient occupancy accounted for a majority of revenue in the audit period. Finance director Jamie Wagner told the council the audit showed that occupants staying more than 180 consecutive days generated 68% of total revenue for a recent month; the presentation cited an average non‑transient stay of roughly 1,137 days and a maximum recorded stay of 5,191 days per the audit exhibits provided to the council.
The city’s legal and planning position, as explained by the city attorney and staff, is that the property is licensed under NAICS 72111 (hotels and motels for transient lodging) but that the business appears to be marketing and operating an additional residential line of business (NAICS 531 — lessors of residential buildings). Assistant City Manager Smith told the council that under Pelham code (chapter 5, article 1) and related NAICS/license rules, a separately licensed line of business for residential leasing would be required if more than a small percentage of gross receipts derived from that activity; because the site is not zoned for residential leasing, staff said the operation could not obtain that separate license and therefore recommended revocation of the hotel license.
"The marketing is evidence that the business is holding itself out as an apartment‑style residential lodging, not solely as a transient hotel," the finance presentation said, citing website postings, Apartments.com and Craigslist listings included in the council packet.
The business’ attorney, Jeff Pano, told the council he objected to how the proceeding was presented and argued the city had not satisfied procedural requirements under its code. "I don't believe that this is procedurally proper before the city council at this point," Pano said, asking the council to accept exhibits and arguing that his client had not offered any lease agreements longer than 180 days and had removed controversial advertising language.
Pano also urged the council to weigh the human impact of revocation: his remarks noted the potential for displacement of workers, people with disabilities and victims of domestic violence who currently rely on the property as affordable or emergency housing.
Multiple residents and occupants spoke during the public hearing, telling the council they consider the property a safe place and warning that revoking the license would leave vulnerable people without shelter. "I fled domestic violence ... we feel safe," one resident said, describing a stay of more than 180 days and the property’s role in her recovery. Other occupants described medical needs, steady employment, and long stays; a resident who identified himself as a tenant with post‑traumatic stress disorder said the prospect of displacement was a significant health concern.
The council did not vote on revocation during the April 23 meeting. Staff concluded the hearing with a formal recommendation to revoke the license based on the audit and cited Pelham code sections referenced in the council packet; the business’ attorney maintained the process was procedurally deficient and that the existing evidence did not prove the business had offered agreements longer than 180 days.
What happens next: the hearing record was completed and the city will determine the next procedural step (staff recommended revocation in the record provided to council). The transcript does not record a council vote or final action on revocation at this meeting.
Quotes (from the hearing): "I don't believe that this is procedurally proper before the city council at this point," said Jeff Pano, attorney for the property operator. "We feel safe," said a long‑term occupant who said she had fled domestic violence and was living at the property. "The occupant stays over 180 days accounted for 68% of total revenue," the finance presentation said in describing audit results.
Ending: The council closed the public hearing after hearing staff, the business’ counsel and multiple residents. No final council action on the license revocation was recorded in the transcript; staff recommendations and resident concerns will be part of the record for whatever procedural step follows.
