Installation of traffic light considered a general benefit in calculating condemnation award

by Victoria Heldt

City of Maryland Heights, Missouri v. Robert J. Heitz and Loretta Tucker
(Missouri Court of Appeals, November 1, 2011)

Heitz and Tucker have owned a 12-acre piece of property in Maryland Heights, Missouri since 1961, when it was surrounded by vacant land.  Heitz constructed a building to house Heitz Machine and Manufacturing and built a private drive down the center of the property that ran from Dorsett Road to the building.  Subsequently, Interstate 270 was constructed to the west of the property and developers showed an interest in purchasing it for commercial or retail use.  Heitz showed no interest in selling the entire parcel, but came to an agreement in the early 1980’s with Charles Drury, Sr. that provided Drury two and a half acres of land on which to build a Drury Hotel in exchange for Heitz becoming a limited partner in the venture.  The construction of the hotel still left a portion of Heitz’s property vacant along Dorsett Road.

Heitz continued to receive offers to purchase the remaining land including one from Mr. Drury who expressed interest in building another hotel on the remaining portion of the land.  It was his custom to convert older Drury hotels into Pear Tree Inns and then construct a new Drury Hotel nearby.  Another offer was received from the Edward D. Jones Company which had developed a North Campus in Maryland Heights.  The campus covered 50 acres of land to the southeast of the intersection of Dorsett Road and Interstate 270.  Edward D. Jones wanted to expand but was unable to do so due to the current configuration of the Dorsett-270 intersection.  The intersection next to the Jones campus (Dorsett Road and Progress Parkway) was very near to Interstate 270 and caused traffic congestion.  Jones sought to relocate Progress Parkway and formed a redevelopment plan with the City in 2002 which included building a public road over Heitz’s property.  Heitz claimed to have no knowledge of the City’s development plan.  Jones made yet another offer to Heitz to purchase the property since he would need an entrance to his campus from Dorsett Road.

Eventually, a portion of the Heitz property was condemned.  The private drive that the Heitz’s previously built that provided access to Heitz Machine would be made into a four-lane public road and two traffic signals would be constructed as outlined by the redevelopment plan.  The City valued the property at approximately $1.2 million.  Heitz disputed the valuation in the condemnation proceedings.  Heitz felt the compensation was not sufficient.  His property was less valuable from his perspective because Drury no longer had an interest in purchasing it for another hotel once the size of his remaining parcel was reduced.  The City felt the plan actually improved the property’s value, and that thus the damages were excessive.  Each party brought witnesses to testify to the value of the land.  The court awarded damages of approximately $1.8 million to Heitz.

The City brought seven claims on appeal, the first regarding the court’s finding that a traffic light is a general benefit.  They argued that it provided a special benefit and should be used to offset damages to Heitz.  They purported that the stoplight increased the property’s “accessibility, visibility, frontage, and connectivity” and that it lessened the cost of future commercial development.  Heitz argued that it did the opposite since it removed the property’s access to Dorsett Road.  The Court found that it was indeed a general benefit for three reasons.  First, a special benefit is derived from the specific location of the improvement.  Since the benefit would still exist of the stoplight was placed elsewhere in the area, it is not specific.  Second, the Court found that the traffic signal is a “secondary, necessary byproduct of the construction of the road,” so it is unable to confer an individual, specific benefit.  Third, the stoplight did not result in a vested right since the City could remove it whenever it saw fit.  For those reasons, the benefit could not be construed as special.

The City’s second argument challenged Mr. Drury’s testimony, inasmuch as Heitz failed to list him as an expert witness.  The Court found Drury did not need to be classified as an “expert witness” since he was merely discussing his prior dealings with Heitz and his knowledge of that specific piece of property.  The remainder of the City’s complaints challenged the admissibility of other expert witnesses and claimed errors in Heitz’s cross-examination and closing argument.  The Court denied all remaining points and affirmed the condemnation award.

Local ordinance permitted to define “available public sanitary sewer system” more broadly than state statute

by Victoria Heldt and Gary Taylor

Roger Newell and Arelene Newell v. Village of Otter Lake, County of Lapeer
(Michigan Court of Appeals, November 15, 2011)

The Newells own property in the Village of Otter Lake on which sits a structure with a working septic system.  In 2004, the Village created a special assessment for its public sanitary sewage system.  The Newells were assessed $10,475; however, they were of the opinion that the assessment should not be applied to them so they filed a complaint with the Michigan Tax Tribunal.  During the time between when the Newells filed their complaint and the time of their hearing, the Village enacted an ordinance that changed the definition of an “available public sanitary sewer system.”  Under the new definition any public sewer system that “crosses, adjoins, or abuts a parcel upon which a structure is located” is considered an “available public sewer system” regardless of how many feet the system was from the structure it services or could potentially service.  This ordinance differed from the previously governing state statute (MCL 333.12751 (c)), which “available public sanitary sewer system as  “a public sanitary sewer system located in a right of way, easement, highway, street, or public way which crosses, adjoins, or abuts upon the property and passing not more than 200 feet at the nearest point from a structure in which sanitary sewage originates.”

At the Tax Tribunal trial, the Newells argued that the assessment was unjust because they received no benefit from the sewer system (they did not connect to it, nor did they need to connect to it).  The tribunal upheld the assessment and the Newells paid it.   Since they did not connect to the system, however, they refused to pay the operation and maintenance fees that were due each quarter thereafter.  When they were notified of their delinquency on the operation and maintenance fees, the Newells filed a claim in circuit court arguing that the ordinance was preempted by the previously governing state statute, that the fee violated the Headlee Amendment, and that the assessment violated the right to equal protection under the Michigan Constitution.  The court ruled in favor of the Village, finding that the preemption claim could have been resolved in the tax tribunal hearing so the court was prohibited from ruling on it.  Additionally it found that, although a municipality is not allowed to enact ordinances that conflict with state statutes, it is free to make ordinances that expand on them.

On appeal, the Newells again made a preemption claim arguing that the state statute preempted the Village’s ordinance.  They were of the opinion that they were not required to connect to the public sewer system (per the state statute MCL 333.12751 (c)) because their structure was located more than 200 feet from it.  The Court disagreed, finding that the Village’s ordinance was not in conflict with the state statute but merely expanded on it, which is allowable.  Thus, the Village’s ordinance was not preempted by the state statue.  The Court further noted that, in matters of public health such as a sewer system, municipalities act as an agent of the state in the regulation of such systems.

Citing People v. Llewellyn, the Newells additionally argued that this area of regulation was one in which state law has exclusive jurisdiction.  This argument rested on the fact that MCL 333.12751 was not included in the list of sections that the statute specified as being expandable by municipalities.  The Court rejected this argument, finding that the statute clearly anticipated changes by local governments.  It further found that the fact that the section was not listed did not equal a declaration that the state’s statutes were the exclusive governing power in that area.

The Newells also argued that the fee violated the Headlee Act, which prohibits municipalities from enacting a tax that was not authorized by state law, and from increasing an already authorized tax without a majority vote.  The Court found that since the fee is “serving a regulatory and not a revenue-raising purpose,” it is not considered a tax.  Consequently, the Headlee Act does not apply to it.  The Court affirmed the lower court’s decision in favor of the Village.

Legal non-conforming use still subject to junk and nuisance ordinances

by Victoria Heldt

Soo Township v. Lorenzo Pezzolesi
(Michigan Court of Appeals, October 25, 2011)

Lorenzo Pezzolesi purchased a piece of property in Soo Township in 1987 when the property was zoned commercial.  He began using it as a junk/salvage yard soon after that.  In 2001, the property was zoned residential and Soo Township passed a nuisance ordinance and a junkyard ordinance.

Subsequently, the Township filed a complaint against Pezzolessi claiming that he was in violation of the ordinances, that the property wasn’t zoned to be a junkyard, and that he did not have a license to operate a junkyard.  The Township’s Supervisor testified that the junkyard did not even classify as “commercial” since no commercial signs were up, the entrance was blocked on a regular basis, and no evidence of commercial activity existed.  Pezzolesi argued that his operation was a salvage yard, not a junkyard.  He claimed to have made sales two weeks prior to the trial and, when asked about employees, he responded that he called “Peter, Joe, and Bob” on the weekends when they were free.  He was unable to provide the last names of his helpers.  The trial court ruled in favor of Pezzolesi.  It found that his salvage yard constituted a commercial operation on property that was zoned commercial at the time of purchase.  The property was rezoned residential after the establishment of the salvage yard; therefore the salvage yard was a legal nonconforming use not subject to the license requirement in the zoning ordinance.  The trial court also found that Pezzolesi was not subject to the nuisance ordinance for the same reason.

The Township appealed, first arguing that the defendant abandoned his right to a nonconforming use when he ceased operating a “commercial” business.  The Court denied this argument, noting that the act of abandonment required “an act or omission on the part of the owner or holder which clearly manifests his voluntary decision to abandon.”  The Court found no such action.  Next, the Township argued that the Pezzolesi’s property was subject to the nuisance ordinance and the junkyard ordinance.  On this issue, the Court agreed.  It distinguished between a zoning ordinance and a regulatory ordinance in that “zoning ordinances regulate land uses, while regulatory ordinances regulate activities.”  It cited a previous case in which it ruled that “a regulatory ordinance can be imposed on a prior nonconforming user, but a zoning ordinance cannot.”  It found that in this case, the junkyard ordinance and the nuisance ordinance constituted regulatory ordinances since they governed people’s behavior regarding the operation of junkyards.  Similarly, the nuisance ordinance “address activity or conditions that could apply to any property, regardless of its location.”  Therefore, the ordinances applied to Pezzolesi’s junkyard/salvage operation.

The Court remanded the decision to the lower court to take further evidence and hear arguments on whether Pezzolesi’s operation in fact violated either of the regulatory ordinances.

Consent judgment in TCA case broader than necessary to remedy violation

by Gary Taylor

St. Charles Tower, Inc. v. Kurtz
(Federal 8th Circuit Court of Appeals, June 28, 2011)

St. Charles Tower filed an application for a conditional use permit to build a cell tower in Franklin County, Missouri.  The planning commission denied the application and the applicant appealed the decision to the Board of Adjustment.  The ZBA denied the appeal, providing only the following sentence to justify its decision: “The proposed location of the tower would primarily serve areas outside of Franklin County, not providing a adequate amount of benefit to Franklin County residents.”  The applicant then filed suit against the ZBA and Franklin County claiming that the decision violated the Federal Telecommunications Act (TCA).  Prior to trial the parties agreed to a consent judgment that required the issuance of the conditional use permit, as well as any other permits required for the applicant to begin construction.  After the district court approved the consent judgment, the trustee of the homeowners association that opposed the construction of the tower (Kurtz) sought to intervene in the litigation in order to challenge the consent judgment on the grounds that it violated state law.  The district court granted the motion to intervene but denied the the motion to amend or alter the consent judgment.  Kurtz appealed to the Eighth Circuit.

The Eighth Circuit reversed the district court.  The Eighth Circuit found that the consent judgment remedy – compelling the issuance of a conditional use permit – violated state law because state law specifies the sole method for issuing a conditional use permit is through hearing procedures and a four-fifths vote of the ZBA.  St. Charles Tower and the county argued that the consent judgment was permissible because its provisions were the minimum necessary to correct a violation of federal law (the TCA).  The Eighth Circuit disagreed, noting that the inclusion of the provisions that compelled the issuance of other permits was not  “narrowly tailored so as to infringe state sovereignty as minimally as possible.”

Discontinued nonconforming use could be resumed within 1 year

by Gary Taylor

C. Line, Inc., vs. Malin and the City of Davenport
(Iowa Court of Appeals, December 7, 2011)

In February 1997, C. Line opened an adult cabaret business in Davenport called “Chorus Line.” In 2001, the City  adopted an ordinance providing for the licensing and regulation of “adult entertainment” businesses.  Two years later C. Line filed a petition in federal court claiming the ordinance was unconstitutional. This lawsuit was resolved in August 2004 when the parties entered into a consent decree that issued a license to C. Line, allowed for the sale of C. Line without loss of the license, and declared C. Line to be a pre-existing nonconforming use.

In 2008 C. Line voluntarily closed Chorus Line, and the business was evicted from its location by a forcible entry and detainer petition granted in favor of the landlord.  The following year the ownership of C. Line was transferred to Nadeem Mazhar, who applied to the city for a license to reopen the adult cabaret business in the same location as before, based on the pre-existing nonconforming use stipulation in the consent decree.  Dr. John’s Lingerie Boutique opened in the same building, however, in August 2008 under a retail business license.  Dr. John’s sells lingerie, shoes, and hosiery as well as novelties, movies, and magazines of a sexual nature.  Malin, the Davenport city administrator, performed a site inspection for the C. Line application, and after observing Dr. John’s advertising and merchandise, a letter – under the signature of the city’s chief financial officer – was issued denying C. Line’s adult cabaret license as violating the Davenport Municipal Code section prohibiting two adult entertainment businesses from being located on the same lot or within 500 feet of each other.  C. Line appealed under city administrative procedures that provided for the city administrator (Malin) to act as the hearings officer.  C. Line filed objections to Malin acting as the hearing officer and moved that he recuse or disqualify himself, but the objections were denied.

The city called one witness, an inspector, at the administrative appeal.  The inspector testified that by his observations Dr. John’s was an “adult store.”  He did not make any square footage measurements or county any inventory.  C. Line called several witnesses.  Among them, the store manager for Dr. John’s testified that at no point in time has the City of Davenport required the store obtain an adult entertainment business license. She further stated that several of the lingerie and novelty items could be found at similar retail stores, like Victoria’s Secret and Spencer Gifts.  The chief financial officer testified that he never inspected Dr. John’s and was basing the denial letter solely on information obtained from the Malin.

Following the conclusion of the hearing the Malin performed a follow-up inspection of Dr. John’s, and based upon his measurements, calculations, and direct observations of the store’s space and displays, the Malin concluded that Dr. John’s was an “adult store” and upheld the denial of C. Line’s adult cabaret license application. Malin made no attempt to address C. Line’s argument that it was a legal preexisting nonconforming use.  C. Line appealed to district court, and after a litany of procedural moves the district court ruled for C. Line on the ultimate land use issue.  Although appeals and cross appeals were filed, this brief focuses on the nonconforming use issue.

Pre-existing nonconforming use. It was undisputed that the express words of the consent decree provided C. Line with an adult cabaret license and the status of a preexisting nonconforming use. As such, C. Line was permitted to continue until legally abandoned. The court cited Davenport Municipal Code section 17.46.020, concerning abandonment:  “In the event that a nonconforming use of any building or premises is discontinued or its normal operation stopped for a period of one year, the use of the same shall thereafter conform to the regulations of the district in which it is located.”  The city argued the nonconforming use was abandoned either when C. Line ceased operations in November 2008 or when the forcible entry and detainer petition was granted in December 2008.  The court noted, however, that the city’s ordinance does not require any subjective intent, but effectively extinguishes nonconforming uses based solely on discontinuance of the use for a specified period of time.  Since C. Line voluntarily ceased operations in November 2008 and was evicted in December 2008, but sought to reopen in July 2009, C. Line did not stop using the site as an adult cabaret for over one year and did not lose its status as a legal nonconforming use under the Davenport Municipal Code.  The nonconforming use did not become the landlord’s upon eviction either, as the city suggested.  Although possession may have been transferred from C. Line in December 2009, C. Line reestablished possession of the land prior to the one-year expiration date.  This argument was premised on a finding that the nonconforming use “leapfrogged” to Dr. John’s, which was incorrect because Dr. John’s was not an adult store and the city had never recognized it as such.

Court affirms decision to approve renovation of historic hotel

by Victoria Heldt

Frederic E. Mohs, et al. v. City of Madison
(Wisconsin Court of Appeals, October 27, 2011)

In this case, Mohs, among other landowners, challenged the City of Madison Common Council’s decision to grant a Certificate of Appropriateness to Landmark X.  The Edgewater Hotel, owned by the Faulkner family, was in need of renovation in order to be “economically sustainable.”  Landmark X, a development company, planned to purchase the property for redevelopment.  Since the building was located within an historic district, Landmark X needed a Certificate of Appropriateness from the City’s Landmarks Commission.  The Commission denied the certificate, but the City’s Common Council overruled that decision within its jurisdiction and granted the certificate.  The case went to the circuit court, which affirmed the Council’s decision.

The Court begins its analysis by noting that, in a certiorari review, the appellants (in this case the landowners) have the burden to show whether 1) the governmental body’s decision was within its jurisdiction; 2) the body acted according to law; 3) the decision was arbitrary or oppressive; and 4) the evidence of record substantiates its decision.  The Court found that the landowners failed to meet the burden.  They based most of their argument on the governing ordinance which read:

“The Council may, by favorable vote of two-thirds (2/3) of its members, based on the standards contained in this ordinance, reverse…the decision of the Landmarks Commission if, after balancing the interest of the public in preserving the subject property and the interest of the owner in using it for his or her own purposes, the Council finds that, owing to special conditions pertaining to the specific piece of property, failure to grant the Certificate of Appropriateness…will cause serious hardship for the owner, provided that any self-created hardship shall not be a basis for reversal…”

The Landowners first took issue with the word “owner” that appears within the ordinance.  They argued that since Landmark X did not own the property, it could not experience any hardship from the withholding of a Certificate.  The Court rejected this argument, concluding that the existing condition of the building (which the granting of the Certificate hopes to alleviate) presents a hardship for anyone who owns or intends to own the building.

Next, the landowners turned to the ordinance’s requirement that the governing body balance the public and private interest in the property.  They claimed that the Council failed to address this within their ruling.  Landmark X supported the claim with the ruling in Lamar Central Outdoor, Inc. v. Board of Zoning Appeals of Milwaukee in which the Court reversed a municipality’s decision because it lacked an explanation of reasoning.  Here, the Court found that the Lamar claim was forfeited because it was not preserved in trial court.  The claim appeared for the first time in a reply brief, which is disallowed.  The Court clarified that, even if it had reviewed the Lamar claim, it would have been rejected.  It found that comments made by a Council-member expressed that the renovation would serve both public and private interests in the dilapidated building.  These comments constituted a showing that the Council analyzed the situation in light of both public and private interests.

Under the umbrella claim that the Council failed to make required findings Landmark X made several more arguments, all of which the Court rejected.  They argued that the Council failed to meet the “special condition” requirement of the ordinance.  They interpreted the ordinance to mean that the hardships endured by the owner must be unique and, in this case, the conditions were not specific to Edgewater.  They purported that this situation could be similar to that faced by other building and hotel owners.  The Court rejected this argument due to lack of analysis and support.  In the remainder of the opinion, the Court dismissed three more minor claims due to a lack of support and a failure to present a logical argument.  The trial court’s decision was affirmed.

Announcing 2012 Intro to Planning and Zoning workshops

It is once again time for ISU Extension and Outreach Introduction to Planning and Zoning workshops.  It is a three-hour workshop designed to introduce the basic principles of land use planning and development management to elected officials, planning and zoning officials, and board of adjustment members without formal training in the subjects.  Using case scenarios in a highly-interactive format, the workshop highlights issues frequently faced in the land use process.  The workshop is offered annually in eight locations across the state.  Locations change from year-to-year so that city and county officials are able to attend a location near them at least once every two years.  The dates and locations for Spring 2012 are:

Tuesday, March 20, 2012 – Arrowood Resort, Okoboji
Wednesday, March 21, 2012 – Best Western Holiday Lodge, Clear Lake
Wednesday, March 28, 2012 – Comfort Inn, Burlington
Thursday, March 29 – Clarion Hotel, Cedar Rapids
Tuesday, April 3 – Hotel Winneshiek, Decorah
Wednesday, April 4 – Carrollton Inn, Carroll
Tuesday, April 10 – Bev’s on the River, Sioux City
Wednesday, April 11 – Red Coach Inn, Red Oak

All workshops begin with registration and a light supper at 5:30 p.m.  The program begins at 6:00 p.m. and concludes by 8:45 p.m. The registration fee is $55 per individual.  This fee is reduced to $45 per individual if a city or county registers 5 or more officials to attend.  The fee covers the workshop instruction, workshop materials, and supper.

In January we will post a link to the registration brochure on the Intro to Planning and Zoning Workshops page (link to that page is above).

City’s attempted extension of water service violated federal law protecting rural water districts

by Gary Taylor

Ross County Water Company, Inc., v. City of Chillicothe (OH)
(Federal 6th Circuit Court of Appeals, November 30, 2011)

Ross County Water Company (RCWC) is a non-profit, member-owned, water company incorporated in 1970 under Ohio law. Its members are limited to those who are the record owners of the property served by the water company and to whom the company’s board of trustees has issued a certificate of membership. RCWC serves nearly 13,000 residential and business customers through approximately one thousand miles of pipeline. To finance the construction, maintenance, and extension of its water works system, RCWC borrowed nearly $10.6 million from the United States Department of Agriculture.

The dispute centered around the extension of water service to several commercial and industrial properties approximately two miles north of the municipal boundary of the city of Chillicothe (City).  In 1974, RCWC installed a ten-inch waterline running east to west slightly north of Delano Road that bisects the disputed area which enabled RCWC to provide water service to to a mobile home park.  In 2000, the owner of the mobile home park granted RCWC easements to add additional waterlines to serve other properties owned by the same company.  A sixteen-inch water line was installed in 2003.  RCWC also installed other lines bordering Delano Road, State Route 23, and Hospital Road.

in 2008 the City council passed an ordinance approving plans to develop waterlines north of Delano Road, in the disputed area and cris-crossing RCWC lines.  The Ohio Environmental Protection Agency approved the plans, but RCWC obtained a preliminary junction in Federal District Court for Southern Ohio, claiming protection under 7 U.S.C. § 1926(b) – that portion of the Agricultural Act of 1961 that grants U.S.D.A. authority to extend loans for rural water service and protects loan recipients from competition under some circumstances.  The District Court held that RCWC is entitled to the protections afforded by 7 U.S.C. § 1926(b) and enjoined the City from taking any further action to supply water to the disputed area. The City appealed.

Congress enacted the Agricultural Act of 1961 to “preserve and protect rural farm life.” 7 U.S.C. § 1926(a), granted the Secretary of Agriculture authority to “‘extend loans to certain associations providing water service . . . to rural residents,’” while 7 U.S.C. § 1926(b), was enacted to to safeguard the financial viability of rural associations and these loans. Section 1926(b) provides: “The service provided or made available through any such association shall not be curtailed or limited by inclusion of the area served by such association within the boundaries of any municipal corporation or other public body, or by the granting of any private franchise for similar service within such area during the term of such loan.”

The 6th Circuit Court of Appeals began by recognizing that the intent of this provision is to prevent “local governments from expanding into a rural water association’s area and stealing its customers.” Thus, the provision “should be given a liberal interpretation that protects rural water associations indebted to the U.S.D.A. from municipal encroachment.” To establish that it is entitled to protection, RCWC must show that (1) it is an ‘association’ within the meaning of the Act; (2) it has a qualifying outstanding loan obligation; and (3) it has provided or made service available in the disputed area.  The bulk of the litigation centered on the third prong.   To satisfy this, RCWC must demonstrate (1) it has “pipes in the ground” that provide service within or adjacent to the disputed area, and that (2) it has the legal right under state law to serve the disputed area.

Pipes in the ground.  The Court observed that “pipes in the ground” means that waterlines must either be within or adjacent to the property claimed to be protected, and that RCWC must also be capable of providing service to the disputed area within a reasonable time after a request for service occurs. The City argued that (1) RCWC did not have the physical ability to service the disputed area at the time the lawsuit was filed, and (2) did not have any customers in the disputed area. The Court determined that both arguments failed. As for (1) the Court found that the waterlines installed beginning in 1974 were both through and adjacent to the properties in question, and that they were sufficient to provide water to new customers because the pressure carried in the lines is approximately 150 psi.  The fact that the 1974 line was used to supply emergency water to the City for several weeks in 1998 supported this conclusion. As for (2), the Court stated that the lack of current customers in the area is irrelevant, and that in fact the language of the statute indicates that future customers are relevant and sufficient.

Legal right to serve area.  The Court recognized that the Ross County Board of Commissioners gave RCWC blanket permission to construct waterlines throughout the unincorporated areas of the county, and that the Ohio Environmental Protection Agency permitted the waterlines in question.  The claim by the City in this regard was without merit.

Finally, the City argued that prior caselaw has recognized that section 1926(b) cannot be used as a sword by rural water districts to “foist an incursion of its own on users outside of its boundary that it has never served or made agreements to serve.”  The Court distinguished the prior caselaw as being unique because it addressed a circumstance where a state has predetermined the boundaries of its rural water districts.  In the present case RCWC was established as a non-profit, and is without state-defined geographical boundaries.  Moreover, RCWC had its lines in place prior to the City’s attempt to server the disputed area.

The Court of Appeals affirmed the District Court’s ruling in favor of RCWC.

Township ordinance regulating billboards passes constitutional challenges

by Victoria Heldt

Township of Blair v. Lamar OCI North Corporation
(Michigan Court of Appeals, October 27, 2010)

Lamar OCI North Corporation (Lamar) leases property along US highway 31 on which it maintains commercial billboards.  Ordinances in the Blair Township Zoning Ordinance (BTZPO), passed in 2005, prohibit billboards exceeding 300 square feet in area, 30 feet in height, and closer than 2,640 feet to another billboard.  One of Lamar’s billboards was in violation of all three of those stipulations, but was allowed as a nonconforming use since it was constructed before the relevant ordinances in BTZPO were passed.  In 2005, Lamar removed a portion of the sign and installed an LED display face on the remaining portion of the board.  This action brought the sign in compliance with the area and height requirements, yet it still violated the distance requirement.

The Township filed suit in district court claiming that the sign constituted a nuisance and Lamar countered with a claim that the spacing requirement between signs violated the First Amendment.  The district court ruled in favor of the Township, but found a portion of the governing ordinance invalid under the First Amendment due to vagueness and removed it.  The court ordered the removal of the billboard unless it appealed the ruling, in which case it could remain until the resolution of the appeal.

On appeal, Lamar first argued that Michigan law prohibited the Township from disallowing modifications to nonconforming uses if they reduce the nonconformity.  The Court acknowledged that the Township has authority to regulate billboards under Article 20 under the BTZO.  Specifically, the Township governs nonconforming uses under Section 20.08 which states that the ordinance may not prohibit alterations to the nonconforming use unless the cost of the alterations exceeds 30% of the cost to replace the sign.   The Court noted that Lamar’s argument was invalid, since it cited cases that were not factually similar.   The changes to Lamar’s sign exceeded 30% of the cost of replacement, so the BTZO had authority to prohibit them.  Lamar failed to show that the trial court lacked authority to eliminate the nuisance.

Lamar next claimed that, since one sentence of the governing ordinance was stricken due to vagueness, the district court should not have been able to find them in violation of the ordinance.  The sentence removed read:  “If the face, supports, or other parts of a nonconforming sign or billboard is structurally changed, altered, or substituted in a manner that reduces the nonconformity, the Zoning Administrator may approve the change.”  The trial court ruled that the phrase gave unbridled and vague authority to the Zoning Administrator.  The Court found that the sentence was able to be removed without altering the goal or effectiveness of the ordinance.  Another question the Court asked itself was whether the ordinance would have been passed in the first place had it been known that the sentence would be stricken.  They found that it would, so the removal of the sentence did not render the clause ineffective.  Lamar claimed that the Court should have eliminated the need for permission from the Zoning Administrator to solve the problem and retain the ability to reduce nonconformities; i.e., that requiring permission constituted prior restraint of speech.  They based their argument on Shuttlesworth v. Birmingham in which the Court ruled against an ordinance requiring a permit to protest.  The Court rejected Lamar’s argument, stating that Shuttlesworth did not apply to the facts in this case because the Township was not trying to restrict the content of the speech.

Lastly, Lamar challenged the constitutionality of the distance requirement found in the ordinance.  The Township claimed the requirement was in place to “enhance the aesthetic desirability of the environment and reduce hazards to life and property in the township.”  When analyzing restrictions on free speech, the Court considers four factors:  1) The First Amendment protects commercial speech only if that speech concerns lawful activity and is not misleading.  A restriction on otherwise protected commercial speech is valid only if it;  2) seeks to implement a substantial governmental interest; 3) directly advances that interest; and 4) reaches no further than necessary to accomplish the given objective.  In this case, the Court found that lawful commercial speech was involved and that “promoting aesthetic desirability of the environment and reducing hazards to life and property in Blair Township are of substantial governmental interest.”  It also found that the ordinances also passed the last two factors of the four-pronged test.  Consequently, the Court affirmed the trial court’s decision.





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