A state-appointed panel voted 3-2 in favor of Hall County’s objection to converting homes into businesses in the Holiday Heights subdivision at an arbitration hearing Wednesday.

At the request of property owners, Oakwood was looking to annex five parcels in the subdivision off of McEver and Mundy Mill roads and rezone the property for office professional use, which would include businesses such as law or accounting offices.

Oakwood officials maintained professional offices would create a transition area between the neighborhood and existing commercial businesses on the major roads nearby.

The county opposed the annexation largely because businesses in that area would conflict with current zoning and land use plans.

The Georgia Department of Community affairs appointed five neutral people to hear the facts of the case and resolve the dispute between the city and county over the annexation.

The issue is complicated because the Holiday Heights subdivision, which was built in 1970, has had commercial property spring up around it as the area has grown over the years.

A Regions Bank building sits nearby, and a house at the entrance of the neighborhood was zoned commercial years ago.

The five parcels in question also sit on a cul-de-sac away from the main part of the neighborhood, near land that has been designated for commercial use in the county’s comprehensive land use plan.

"We see it as an island in itself," said Joni Owens, representing the property owners looking to rezone.

Owners of the homes that sit on the five parcels have unsuccessfully tried to sell the homes over the last few years but have had interest from business owners.

"We do have quite a bit of hardship here," Owens said. "There’s an opportunity to sell a property after three long years on the market ... for a totally different use that makes so much more sense."

Lisa Harris, president of the Holiday Heights homeowner’s association, said allowing businesses to locate in the neighborhood is not fair to the more than 60 other property owners.

"Two families, for financial reasons, are trying to come in and impact on various levels, the families that live in this neighborhood," Harris said. "It will affect our sense of safety and community."

In his closing argument, County Attorney Bill Blalock urged the panel to consider only the facts, not the circumstances, when judging the validity of the county’s objection.

"What you have here is simply an economic issue," Blalock said. "Economic stress is not one of the standards you were given for making this decision."

Oakwood Attorney Donnie Hunt pointed out that the five pieces of property are so close to the existing commercial development that they live in limbo between businesses and homes.

"(Businesses) abut right to the front of this property," Hunt said. "These five property owners were not taken into consideration."

The panel discussed the facts in the case and three members sided with Hall County and two with the city of Oakwood.

"There’s no evidence presented by the city that what the county has done is inconsistent," said panel member Mickey George.