Gateway files lawsuit against Moore County

DUANE CROSS
MCO Publisher•Editor

A legal battle is brewing in Moore County as Gateway at Lynchburg, LP – a developer specializing in affordable housing across the Southeast – has filed a lawsuit against the Metropolitan Lynchburg Moore County Planning and Zoning Commission, the Metropolitan Council, and the Metropolitan Government of Lynchburg, Moore County, Tennessee.​

• Gateway v Moore County

Why More Apartments?

Gateway at Lynchburg, LP, based in Florence, Ala., began pursuing property in Moore County after the Tennessee Housing Development Agency (THDA) ranked the county as a high-need area for affordable housing for three consecutive years.

In January 2025, Gateway reached a deal to buy 5.13 acres on Main Street in Lynchburg, intending to build a 42-unit affordable housing apartment complex leveraging federal low-income housing tax credits awarded by THDA.

Originally, the land was zoned as R-1 Residential District – Suburban multi-family, which explicitly permitted apartments. Gateway secured written confirmations from local officials, including:

• The Metro Moore County Utility Department, confirming water and sewer capacity for up to 44 units
• Metro Mayor Sloan Stewart, confirming that apartments were allowed under zoning
• Duck River Electric Membership Corporation, confirming available electric capacity

With all clearances in hand, Gateway applied for and won THDA low-income housing tax credits in July 2025.

Controversial Zoning Changes

In April 2025, Dexter Golden, the Planning Commission's chair, unexpectedly proposed amending the zoning ordinance. The "Proposed Ordinance" sought to:

• Remove apartment developments as a permitted use in R-1 zones.
• Require apartment developments to be rezoned to C-1 Commercial.
• Double the required minimum lot size for R-1 homes and apartment complexes.
• Cap apartment developments at 25 units.

Critically, Gateway alleges these changes were introduced without proper public notice or hearings. The Proposed Ordinance was neither listed on the meeting agenda nor published in any newspaper of general circulation, in violation of Tennessee’s Open Meetings Act and local zoning regulations. Despite lacking due notice, Moore County officials approved the ordinance in May 2025.

Impact and Lawsuit Claims

The adopted ordinance effectively blocks Gateway’s planned project, preventing the construction of 42 affordable units at a time when housing shortages are acute. Gateway claims the ordinance is void ab initio – invalid from the outset – because proper legal procedures weren’t followed, and it seeks a court ruling to that effect. The lawsuit underscores several alleged failures:

• No public hearing or published notice (required by state law and local ordinance);
• Bypassing procedural steps for zoning amendments;
• The Planning Commission failed to submit a report before the ordinance took effect.

The suit further points out that the decisions appeared to be influenced by misconceptions about affordable housing, including the erroneous assumption that the development would be Section 8 housing.

Gateway clarified the project would be a 30-year tax-credit development, with rents ranging from $590 for a one-bedroom to $815 for a three-bedroom, and projected annual property tax revenues of $75,000 – significantly above the $458 currently generated by the undeveloped land.

Community and Council Reaction

At a subsequent council meeting, Gateway’s representatives appealed for project approval, highlighting procedural lapses and the dire local housing need. Despite this, and acknowledgment from some council members that water and sewer revenue would benefit the county, efforts to reconsider the decision stalled.

What’s Next

Gateway has submitted a site plan for the 42-unit complex and paid review fees. It asserts in its complaint that, because the zoning amendment was improperly enacted, its project should be reviewed under the original ordinance that allowed apartment dwellings in R-1.

The case, filed in Moore County Chancery Court on Nov. 10, 2025, will test the boundaries of local authority and procedural fairness. Gateway seeks to overturn the rezoning, restore its rights to build, and bring much-needed affordable housing to Moore County.

The Bottom Line

This lawsuit spotlights how local procedural issues can impact community development projects, with Moore County’s low-income families and future growth hanging in the balance.​

Moore County has not yet filed a response to the lawsuit.