Black Mountain -- May 12, 2026: The Town of Black Mountain and several current and former officials are facing a federal lawsuit alleging constitutional violations and financial harm stemming from the town's handling of permits and inspections. RailYard Hospitality Group—the company behind Black Mountain Brewing and the RailYard project—filed the lawsuit in U.S. District Court for the Western District of North Carolina in February 2026.
The lawsuit names the Town of Black Mountain as a defendant, alongside former Town Manager Josh Harrold, former Assistant Town Manager Jessica Trotman, Planning Director Michelle Kennedy, Zoning Administrator Russell Cate, and Building Inspector Rick Denise. RailYard Hospitality Group alleges inconsistent enforcement, due process and equal protection violations, negligence, regulatory takings, and federal civil rights claims under 42 U.S.C. § 1983. The company is seeking damages exceeding $5 million, attorney's fees, and a jury trial.
Key Allegations and Timeline
Permit Reversals: The plaintiff claims the town approved permits and issued a Certificate of Occupancy (CO) in March 2023, allowing the RailYard to open in April 2023, but later reversed course.
Operations Blocked: Following the opening, the lawsuit states the town issued violation notices and blocked operations.
Chain-Link Fence: A significant claim involves the town's installation of a chain-link fence around the RailYard property in early 2026 to restrict parking, allegedly without a court order or opportunity for appeal.
Parking Disputes: The plaintiff also claims the town created contradictory parking setups nearby after deeming RailYard parking "unsafe."
The Town’s Defense
In response to the growing public controversy, the Town of Black Mountain issued a press release on Dec. 3, 2025, stating its actions have been grounded in the duty to enforce state building and fire codes. The town's defense centers on claims that certain permits, such as a 2018 deck and 2020 add-ons, lacked necessary documentation like Appendix B or site plans. The town also stated that some permits expired without final inspections and that no CO adjusted occupancy loads.
"At every point, the Town's actions have been grounded in the duty to enforce State building and fire codes," the town stated in the December release.
Ongoing Scrutiny
The legal challenge follows months of controversy in Black Mountain. Public records revealed in late 2025 that the town had approved a second-story deck years before deeming it illegal. The situation also saw the resignation of the former town manager, and the interim town manager pledged transparency in February 2026 amid increased scrutiny.