Council’s rescission of conditional use permit based on misrepresentation was not based on substantial evidence

by Gary Taylor

Oneida Seven Generations Corp. & Green Bay Renewable Energy v. City of Green Bay
Wisconsin Supreme Court, May 29, 2015

Oneida Seven Generations Corporation sought a conditional use permit (CUP) to install a renewable energy facility in the City of Green Bay.  The facility would take municipal solid waste and turn it into energy via a pyrolytic gasification system. The application was supported by a 149-page report on the facility. The report included proposed blueprints for the facility and artist’s renderings of its exterior. It also contained photographs of a pyrolytic gasification unit with various parts labeled, including its “exhaust stack.” In addition to these illustrations, the report described the various permits that would be required from the Wisconsin Department of Natural Resources (DNR) and the requisite reporting to and oversight by the DNR of the facility’s emissions. The report also contained a 50-page section entitled “Emissions,” which consisted of two papers analyzing the impact on air quality of similar facilities. The papers identify possible emissions from conversion technologies, explain that they are significantly lower in amount than emissions from other types of facilities, and observe that the emissions from facilities using conversion technologies fall within local, state, federal, and international emission limits. The papers were followed by an appendix listing over 100 facilities throughout the world that are disposing and converting biomass (principally municipal solid waste) in the process of producing energy and/or fuels.

During the question and answer session at the February 2011 Planning Commission meeting, commissioners asked numerous questions about the gasification process, the technology and its use in other communities, emissions, building appearance (including exhaust stacks), and several other topics. At the conclusion, the Plan Commission voted unanimously to recommend approval of the conditional use permit. Their recommendation suggested that a number of conditions be placed on the permit. These included the requirement that the facility comply with all municipal regulations and the requirement that the facility comply with federal and state regulations governing air and water quality.

The Green Bay Common Council took up Oneida Seven’s request on March 1, 2011.   Council members asked many more questions regarding emissions and waste material. At the conclusion, the Council voted 10-1 to approve the conditional use permit with the conditions recommended by the Plan Commission.

Although the City initially voted to grant the permit, it subsequently voted to rescind the CUP on the basis that it was obtained through misrepresentation. This came after Oneida Seven applied for the various city, state, and federal permits it would need for the project and submitted plans to accompany those applications.  Members of the public complained to the Green Bay City Council about many matters related to the proceeding, including that the stacks and emissions referenced in the building permit were not on the plan submitted for the CUP.  The  Council voted to direct the Plan Commission to hold a hearing to determine whether the conditional use permit had been obtained by misrepresentation. After taking more testimony and receiving more documents from Oneida Seven, the Commissioners unanimously agreed that they had had adequate information to reach a decision on the CUP, that they had not been misled, and that Oneida Seven had not made misrepresentations. The Commission relayed these findings to the Council in a report. The Council considered the Commission’s findings at a meeting on October 16, 2012. A motion to approve the decision of the Commission did not pass, but a motion to rescind the conditional use permit passed by a vote of seven to five.  Oneida appealed, lost at trial court, but won at the Court of Appeals.  The City appealed to the Wisconsin Supreme Court.

The Supreme Court was asked to consider whether the City’s decision to rescind Oneida Seven’s conditional use permit was supported by substantial evidence. Substantial evidence is evidence “of such convincing power that reasonable persons could reach the same decision as the board.” In determining whether the substantial evidence test is met, a court should “take into account all the evidence in the record.”  After carefully dissecting the entire record of statements made by Oneida Seven representatives at the Commission and Council meetings, and examining them in the context of the questions being asked of them at the time, the Supreme Court could not find evidence in the record on which a reasonable person could rely to find that Oneida’s statements about emissions and hazardous materials were misrepresentations. Therefore the Supreme Court concluded that the City’s decision to rescind the conditional use permit was not based on substantial evidence.

Dissenting opinion

Justice Roggensack dissented, arguing that the majority opinion did not accord the Council’s decision the presumption of correctness and validity that the law requires, and that instead, the majority opinion substituted its view of the evidence for that of the Council, contrary to law.  Material misrepresentations were made to the Council in regard to emissions during operation of the gasification facility and such a facility was not experimental because solid municipal waste was being used as the feedstock in other gasification facilities. A reasonable view of the presentations made March 1, 2011, when Oneida Seven obtained the CUP, supported the Council’s finding that it was misled.

Denial of conditional use permit not unreasonable. Concurring opinion suggests consideration of the comprehensive plan in CUP cases misplaced

by Gary Taylor and Hannah Dankbar

RDNT, LLC v City of Bloomington
Minnesota Supreme Court, March 18, 2015

RDNT owns Martin Luther Care Campus in Bloomington. The campus consists of two buildings that offer a variety of services, including assisted living, memory care, skilled nursing, adult day care and transitional care. In September 2011 RDNT applied for a conditional use permit from the City of Bloomington to add a third building to the campus. The additional building would result in a 26 percent increase in the number of rooms on the campus, an 8 percent increase in employees, and an overall increase in building square footage on the campus of 62 percent. People in the community opposed the permit because they worried about an increase in traffic.

The Planning Commission unanimously voted to recommend denial of the permit.  It concluded that the proposed addition would violate the comprehensive plan in three ways: (1) it is not adjacent to an arterial or collector street; (2) it is not in close proximity to transit, amenities, and services; and (3) it would not preserve the character of the surrounding low density, single family neighborhood. The Planning Commission also determined that the proposed use violated the City’s conditional use permit ordinance because it would be injurious to the surrounding neighborhood through increased traffic, density and design of the building. This conclusion was based on estimated increases in traffic and on the size, density and design of the proposed building.

The City Council met to consider the recommendations of the Planning Commission.  The Council listened to the neighboring landowners that spoke both for and against the proposal, and also reviewed traffic studies from two different experts estimating the future traffic volume that would be generated by the proposed expansion.  Ultimately the Council voted four to three to deny the application for the permit, finding that the project would conflict with different comprehensive plan provisions, and also that the project would render the Campus “incompatible with the scale and character of the surrounding low density, single family neighborhood” in violation of the conditional use permit ordinance.

RDNT filed a complaint in district court.  The district court ruled for RDNT, finding that the Council “misapplied certain standards, misrepresented the impact of certain studies, and appeared to ignore evidence to the contrary.”  On appeal, however, the Court of Appeals sided with the City, holding that the City properly exercised its discretion.  RDNT then appealed to the Supreme Court.

The Supreme Court did not address the issues related to compatibility of the proposal with the comprehensive plan, instead limiting its review to the claim that the proposed use would violate the conditional use ordinance.  Noting that a court “will reverse a governing body’s decision regarding a conditional use permit application if the governing body acted unreasonably, arbitrarily, or capriciously” the Supreme Court broke this inquiry down into two parts:  (1) whether the reasons provided by the city were legally sufficient and, if so, (2) whether the reasons had a factual basis in the record.

Criteria 5 of the conditional use permit ordinance requires the Council to make a finding that “the proposed use will not be injurious to the surrounding neighborhood or otherwise harm the public health, safety and welfare.”  Although noting that this standard is imprecise, the Court recognized that it has long held that cities have the right to deny conditional uses “if the proposed use endangers the public health or safety or the general welfare of the area affected or the community as a whole.”  Thus the Court concluded that the ordinance standard is legally sufficient.

Regarding the second step, neighbors gave concrete testimony about how the increase in traffic would damage their quality of life. Bloomington relied on multiple traffic studies, data from their City Engineer and detailed factual complaints from residents to determine that this project will injure public health and welfare. The City determined that street capacity alone was not dispositive as to whether an increase in traffic would injure the neighborhood or otherwise harm the public health, safety, and welfare. “The fact that a street could physically handle more traffic does not determine whether the neighborhood or the public could handle more traffic. To paraphrase one of the City’s planners: this is not a capacity issue, it is a livability issue.” The Court, therefore, could not conclude that the City acted unreasonably, arbitrarily, or capriciously.

Based on the record, Bloomington did not act unreasonably, arbitrarily or capriciously when it denied the permit.

Concurring Opinion

Justice Anderson agreed with the majority’s conclusion, but addressed the “alarming argument” advanced by the City “that the City may properly deny a conditional use permit when the proposed use is in conflict with its comprehensive plan.”   Justice Anderson believes there is “significant uncertainty in our statutory framework and confusion in our case law concerning the role of comprehensive plans,” and that “constitutional implications [lurk] behind the insistence of the City that a conditional use permit may be denied for any comprehensive plan violation.”  After a lengthy historical review of caselaw and legislative amendments to Minnesota’s planning and zoning statutes, Justice Anderson observes that both the courts and legislature have “made hash out of the intersection of comprehensive planning, zoning and property rights law.”  He suggests that “comprehensive plans are too long and too general (too “comprehensive”) to provide a reasonable standard” for denying a conditional use permit. Additionally, a conditional use ordinance does not create a “standard” by requiring compliance with the entire comprehensive plan as a prerequisite to obtaining a permit “because a comprehensive plan does not provide sufficiently specific standards to measure compliance.”  Finally, Justice Anderson finds it “difficult to envision … how any applicant could comply with the entire comprehensive plan.”  He points to several goals in the City’s plan that lend support to RDNT’s project, but believes that “the City, looking for any port in the storm to deny the RDNT application, now weighs these goals as less important than other goals.” In his opinion this “demonstrates the poor standard the comprehensive plan provides and the inherent arbitrariness that exists when the plan is relied upon to make these types of decisions.”

Requiring conditional use permit for residential substance abuse service facilities does not violate ADA

by Gary Taylor

Get Back Up, Inc. v. City of Detroit
Federal 6th Circuit Court of Appeals, March 13, 2015

Get Back Up operates a 160-bed all male residential facility in downtown Detroit, providing substance abuse treatment and counseling, education, and job training opportunities.  In August 2007 it purchases an unused school building from Detroit Public Schools for approximately $500,000.  The building is located in B4-H, General Business/Residential Historic zoning district.  The B4-H District allows boarding schools, child care institutions, nursing homes, religious residential facilities, adult day care centers, hospitals, libraries and religious institutions (among other uses) by right.  It lists “residential substance abuse service facilities” as one of several conditional uses requiring the satisfaction of 15 stated criteria before being allowed.  Get Back Up originally received approval of its conditional use application for the building in the B4-H District from the Building Safety and Engineering Department, but the Russell Woods-Sullivan Area Homeowners Association appealed the approval to the Board of Zoning Appeals (BZA).  The BZA voted to reverse the decision.  Get Back Up appealed the BZA decision to Wayne County Circuit Court, and after bouncing around between circuit court and the BZA several times the circuit court affirmed the BZA’s denial.  Appeals to the Michigan Court of Appeals and Supreme Court were unsuccessful.  After this, Get Back Up filed a complaint in federal court, claiming that the denial violated the American’s with Disabilities Act, the Rehabilitation Act, and the Fair Housing Act.  The federal district court also ruled in favor of the city, and Get Back Up appealed.

Get Back Up argued that requiring residential substance abuse service facilities to obtain a conditional use permit when other similar uses are allowed by right is discriminatory.  The 6th Circuit disagreed, finding that the ordinance does not allow any materially similar use to operate by right in any B4 zoning district.  Residential substance abuse service facilities are treated the same as many other residential uses such as multi-family dwellings, emergency shelters, rooming houses, and fraternities and sororities.  Furthermore, the court found that the other uses cited by Get Back Up in support of their case (nursing homes and hospitals) are not materially similar to residential substance abuse service facilities.  Hospitals are not residential uses, and they tend to have substantial impact on their immediate surroundings and are particularly well suited for busy commercial districts like B4 districts.  While nursing homes are residential uses, their residents are “often physically disabled and they rarely leave the premises….[They are a] uniquely sedate and unburdensome use, having relatively little impact on traditional zoning concerns like noise and traffic.”

The court also found no merit in Get Back Up’s argument that the 15 criteria for approving a conditional use permit are unconstitutionally vague.  The phrases “detrimental to or endanger the social, physical, environmental or economic well being of surrounding neighborhoods,” “use and enjoyment of other property in the immediate vicinity,” and “compatible with adjacent land uses” are terms with “common-sense meanings” and are not so vague as to fail to provide fair notice to applicants of what is prohibited.”

The 6th Circuit Court of Appeals affirmed the ruling in favor of the City of Detroit.

Idaho Supreme Court finds real, substantial harm may come to neighbor of proposed multi-story apartment complex if development is approved

by Hannah Dankbar and Gary Taylor

Lusk, LCC v City of Boise
Idaho Supreme Court, February 10, 2015

In fall 2011, Royal Boulevard Associates, LP applied for a conditional use permit (CUP) to build a 352,000 square foot, five-story, multi-family apartment complex called River Edge Apartments. The site is located near Boise State University and is zoned Residential Office with a Design Review Overlay (R-OD). Multi-family housing is allowed at this site, but Boise City Code requires a CUP to build a building that is more than 35 feet tall in an R-OD zone. River Edge was planned to be between 59 and 63 feet tall. Lusk, LLC owns a building next to the proposed site and was therefore entitled to notice of the application for a CUP.

In spring 2012, the Boise Planning and Zoning Commission (Commission) conducted a hearing and unanimously approved the CUP for River Edge. The Commission provided a written explanation for their decision for the height variance and the CUP. Lusk appealed this decision to City Council claiming that the Commission did not adequately address the criteria for a CUP found in the zoning code. Lusk claimed that the proposed building was incompatible with the buildings in the area and that constructing 622 bedrooms and 280 parking spaces would place an “undue burden on transportation and other public facilities in the vicinity” and “the proposed project will adversely affect other property in the vicinity.” The City Council denied this appeal. The District Court affirmed the City Council’s decision and Lusk appealed to the Idaho Supreme Court.

Lusk did not appeal the height variance, just the City Council’s decision affirming the CUP. Lusk argued that because the Commission did not follow the correct procedure for granting the CUP the City Council was wrong to affirm the Commission’s decision.  Lusk argued that the district court erred in affirming the City Council’s decision because: (1) the Commission’s approval did not follow the legal procedure, (2) the decision was not supported by substantial evidence in the record, and (3) the decision was arbitrary, capricious and an abuse of discretion.

Boise City Code requires the Commission to consider the criteria set forth in Boise City Code section 11-06-04.13 before approving a height exception.  It states, in part, that the Commission must find that “the site is large enough to accommodate the proposed use and all yards, open spaces, pathways, walls and fences, parking, loading, landscaping and other features as are required by this title.” Idaho Code §67-6512(d)(7) provides that “conditions may be attached” to a CUP “requiring more restrictive standards than those generally required in an ordinance.” The Boise City Code also requires that the Commission determine “that the proposed use…will not adversely affect other property of the vicinity.”

Lusk argued that the Boise Code requires the Commission to determine whether planned parking is adequate for the proposed project before granting a conditional use permit.  The question is whether the Commission recognized that it possessed the discretionary authority to impose parking requirements beyond the minimum established by the Parking Chapter of the code. The record unambiguously demonstrated that the Commission failed to perceive that it had discretion to require additional parking as a condition of approval of the CUP. A staff member of Boise City Planning and Development Services said that the issue of parking is not before the Commission, rather the question of variance for a height exception and the Boise River System Permit were the only questions that can be addressed.

The Commission failed to recognize that Idaho statutes and the Boise City Code provided it with discretion to require the project to provide on-site parking beyond the minimum required by the Parking Chapter. As a result of this failure to apply governing legal standards, the Commission refused to consider the adverse effects on property in the vicinity. The Court found that the decision reflected an abuse of discretion.

The Court, deciding that the Commission abused its discretion, then had to consider whether Lusk identified prejudice to their substantial rights.  Under Idaho caselaw, a party opposing a landowner’s request for a development permit has no substantial right in seeing someone else’s application adjudicated correctly. He or she must be in jeopardy of suffering substantial harm if the project goes forward, such as a reduction in the opponent’s land value or interference with his or her use or ownership of the land.  Without even attempting to evaluate the impact of guests who arrive by automobile, if only half of the River Edge tenants have an automobile, there will be significant numbers of residents looking for parking in the vicinity.  The potential devaluation of petitioner’s property, time and expense to police parking on petitioner’s property, and inconvenience to employees and visitors to the property suggest the real potential for substantial harm.  The Court concluded that there was sufficient evidence that Lusk is in jeopardy of economic harm from the project to satisfy the requirements set forth in Idaho caselaw.

The Idaho Supreme Court reversed the district court’s decision to affirm the city’s CUP approval.

Correctional community-residential facility not appropriate in area designated for future industry

by Hannah Dankbar and Gary Taylor

Volunteers of America- Minnesota v City of Saint Paul
Minnesota Court of Appeals, January 20, 2015

Volunteers of America- Minnesota (VOA) claimed the City of St. Paul was wrong to deny their application for a conditional-use permit, saying that the denial was arbitrary and capricious. VOA is a non-profit faith group, which operates a center in Roseville for adults transitioning out of the federal corrections system. The center is licensed by the Minnesota Department of Corrections and has a contract with the federal government. The center had to move because their lease expired in the previous center. The organization selected 1394 Jackson Street in St. Paul and signed a purchase agreement in 2011. The property is zoned I-1 “light industrial.” Even though the property had served as a correctional community-residential facility in the past, VOA had to get a conditional-use permit from the city. VOA had to satisfy the zoning code’s five general conditions and six specific conditions, found in Section 61.501 related to correctional-residential facilities.  The five general conditions are:

  1. The extent, location and intensity of the use will be in substantial compliance with the Saint Paul Comprehensive Plan and any applicable subarea plans which were approved by the city council.
  2. The use will provide adequate ingress and egress to minimize traffic congestion in the public streets.
  3. The use will not be detrimental to the existing character of the development in the immediate neighborhood or endanger the public health, safety and general welfare.
  4. The use will not impede the normal and orderly development and improvement of the surrounding property for uses permitted in the district.
  5. The use shall, in all other respects, conform to the applicable regulations of the district in which it is located.

Section 65.154(d) of the zoning code limits to 16 the number of residents allowed at a community residential facility such as VOA. VOA requested that it be allowed to have 74 residents – the number of residents needed to generate sufficient operating revenue. The planning commission approved a conditional use permit and granted a upward modification of Section 65.154(d) to allow 32 residents.  VOA appealed to the city council, but the permit was denied outright by the council – not because of the occupancy limits – but rather because the application did not satisfy subsections (1) and (4) of Section 61.501.

The city determined that the planning commission erred in finding that the center substantially complies with comprehensive and district plans. The district plan states that the area should be redeveloped as “a business center with light industrial and office-service uses.” VOA asserts that the center should be considered an “opportunity site” that either focuses on mixed use development or the creation of employment centers. Neither the city council nor the Court of Appeals agreed with VOA’s assertion.  The city had plans to redevelop that area for industry for over 30 years, and with several major road construction projects nearing completion, the court said it was reasonable for the city to conclude that VOA’s proposed project does not align with the plan.

The court also found that the city’s conclusion that Jackson Street center would impede normal and orderly development was not arbitrary and capricious. Allowing the center would impede a new industrial/office park that is likely to come to the area and be at odds with the type of industrial development that is a priority to the area.  VOA’s argument that its current facilities in other locations “show a successful track record and positive feedback from neighbors” may alleviate concerns about the proposed center, but it does not establish that the center would not impede future plans for industrial and commercial development.

The city’s denial of VOA’s conditional use permit application was affirmed.

Improper ex parte contact only invalidated vote of commissioner making the contact

by Hannah Dankbar

Doug and Louise Hanson v Minnehaha County Commission
(South Dakota Supreme Court, October 29, 2014)

Eastern Farmers Cooperative (EFC) applied for a conditional use permit to build an agronomy facility. The facility would store, distribute and sell a variety of farm products, including anhydrous ammonia. The land the facility would sit on, and the surrounding area is zoned as A-1 Agricultural. The Minnehaha Planning Commission recommended approving the permit with ten conditions, even though local residents, including the Hansons, voiced their objections at the Planning Commission hearing because of safety and aesthetic concerns. The Hansons appealed to Minnehaha County Commission. In anticipation of the appeal one of the county commissioners (Kelly) toured an agronomy facility near Worthing, South Dakota. The facility was owned by EFC, but it is unclear if the commissioner knew this when he set up the tour. The County Commission held its hearing and approved the permit by a unanimous vote.  Commissioner Kelly disclosed at the hearing that he had touring the Worthing facility, and that he was impressed by its safety measures. The Hansons appealed to the circuit court. The court held that the Commissioner Kelly’s vote did not count due to the improper ex parte communication, but the other votes were not affected and so the approval of the permit stood. The Hansons appealed the decision.

The Hansons claim that they were denied due process in two ways: (1) that the Minnehaha County Zoning Ordinance (MCZO) does not provide adequate criteria upon which to base a decision to grant a conditional use permit, and (2) that Commissioner Kelly’s participation in the appeal to the County Commission denied them a fair and impartial hearing,

In giving counties ability to control their own zoning, counties must put in place criteria for determining when conditional use permits may be granted.  The Minnehaha County Zoning ordinance delineates three general criteria applicable to every conditional use permit application, and an additional six applicable to the types of agricultural uses at issue in this case.  The South Dakota Supreme Court noted that zoning ordinances are presumed to be constitutional, and that to overcome this presumption the challenging party must show the ordinance is arbitrary, capricious and unconstitutional. Abstract considerations are not sufficient. The South Dakota Supreme Court rejected the Hanson’s argument because they failed to show any way in which the standards in the ordinance did not pass muster.

2. The Hansons argue that the EFC should be required to “begin anew” with the permitting process because the votes of the other commissioners were influenced by the statements of Commissioner Kelly  To meet their burden, however, The Supreme Court stated that the Hanson’s must actually show that either Commissioner Kelly’s actions were sufficient to taint the entire preoceeding or that one or more of the other commissioners should be disqualified individually.  The Hanson’s failed to produce any evidence of any influence Kelly’s actions may have had on the other commissioners.  The court concluded that invalidating Kelly’s vote alone was a sufficient remedy.  With that vote invalidated, the Commission still approved the conditional use permit 3-0.

 

MN township not authorized to levy permit review expenses against landowner

by Rachel Greifenkamp

Great Western Industrial Park, LLC v. Randolph Township
Minnesota Court of Appeals, September 8, 2014)

South of the Twin Cities along the Minnesota-Wisconsin border lies Randolph Township. Here, Recovery Technology Solutions (RTS) was considering purchasing land from Great Western Industrial Park, LLC to use as the site for a facility for recycling asphalt shingles. RTS submitted an application to Randolph Township for a conditional use permit that was denied, and so RTS decided against purchasing the available land. After the denial of the application RTS received a letter stating that it was to reimburse the township for all expenses incurred in the application review, which totaled $31,666.41 (mostly legal and consulting fees). When RTS did not pay the expenses the township wrote a letter to Great Western (the landowner) notifying it of its responsibility for the expenses, as well as interest, late charges, recording charges, and attorney’s fees. The township also informed Great Western that the amount was going to be certified to the County Auditor for collection with the 2014 property taxes.  Great Western sued.

Minn. Stat. 366.012 states:

If a town is authorized to impose a service charge for a governmental service provided by the town, the town board may certify to the county auditor of the county in which the recipient of the services owns real property, on or before October 15 for each year, any unpaid service charges which shall then be collected together with property taxes levied against the property.

Minn. Stat. 462.353 provides:

A municipality may prescribe fees sufficient to defray the costs incurred by it in reviewing, investigating, and administering an application for an amendment to an official control established pursuant to sections 462.351 to 462.364[governing municipal planning and development] or an application for a permit or other approval required under an official control established pursuant to those sections. Except as provided in subdivision 4a,[1] fees as prescribed must be by ordinance. Fees must be fair, reasonable, and proportionate and have a nexus to the actual cost of the service for which the fee is imposed.

Noting that any prescribed fee “must be by ordinance,” the Court of Appeals reviewed the township’s zoning and fee ordinances and found no provision that permits the township to impose a fee on a property owner when a CUP application is denied and the CUP applicant fails to pay the costs incurred by the township in processing the application. The township relied on a section in the fee ordinance that requires that a $300 nonrefundable fee and a minimum $1,200 escrow payment be submitted with a CUP application, but the court found that this language does not authorize the township to impose a service charge on the owner of the property for which the CUP was sought.

The township was not authorized to impose a service charge against Great Western for the expenses incurred by the township in processing RTS’s conditional use permit application, and the ruling fell in favor of Great Western.

 

Claim preclusion not applicable to second application for conditional use permit for frac sand mining

by Gary Taylor

O’Connor v. Buffalo County Board of Adjustment and Glacier Sands, LLC
(Wisconsin Court of Appeals, April 22, 2014)

On January 13, 2012, R&J Rolling Acres (R&J) applied to Buffalo County for a conditional use permit to establish a frac sand mining operation on property zoned Agricultural.  The application identified R&J as the “owner” of the property and Glacier Sands, LLC, as the “developer.” Among the application materials was included a map showing the proposed route trucks would use to travel to and from the property.  R&J asserted the haul route would be “south on [State Highway] 88 to [State Highway] 35,” and that an estimated 80 trucks would leave the property via this route every weekday.  In February 2012 the Buffalo County Board of Adjustment (Board) held a public hearing on the application, which was continued to Marc.  Numerous people spoke up at the hearings about issues related to traffic safety on Highway 88, especially after R&J clarified it expected 126 trucks to leave the site each day instead of 80. At the end of the meeting, the Board voted 2-1 to deny R&J’s application. In its written decision issued March 29, the only reason the Board identified for denying the application was its concern that the large number of trucks leaving the mine site each day would decrease traffic safety on Highway 88. 

R&J did not seek circuit court review of the Board’s decision.  Instead, on March 27, 2012, R&J submitted a second CUP application.  The second application was identical to the first, except that it corrected a misspelled word, changed the proposed number of trucks leaving the site from 80 per day to 126, and proposed to have trucks hauling six days per week instead of five.  After a hearing (continued twice to obtain and digest a traffic study from the Wisconsin DOT), the Board granted the second conditional use permit request subject to 43 conditions. Two conditions were to limit to 105 the number of truck loads laving the site daily, and to prohibit hauling on weekends and holidays.  The Board’s written decision was similar to the earlier written denial, except that the Board explained:

The Wisconsin DOT Northwest Region contracted with AECOM to conduct a “Traffic Safety Impact Assessment” for [Highway 88] during May and June of 2012 in light of the potential increase in truck volume on [Highway 88] from proposed, new non-metallic mine operations in the area.  Representatives of the DOT were present at the hearings/meetings to present the initial as well as updated results of their assessment and answer questions.  Specifically, AECOM addressed crashes and crash rates as well as geometric and operational features pertaining to [Highway 88].  Overall, the [DOT] acknowledges that [Highway 88] may have some substandard features, but believes the road can handle increased traffic volumes.

O’Connor, one of the citizens opposing the permit, filed suit, claiming that the Board erred in two respects:  (1) the Buffalo County zoning ordinance does not allow frac sand mining as a conditional use in the agricultural district; and (2) after the Board denied R&J’s first CUP application, it was prohibited from considering the merits of R&J’s second application. 

Frac sand mining as a conditional use.  The Court of Appeals reviewed the Buffalo County zoning ordinance and found that it allows as a conditional use “[m]anufacturing and processing of natural mineral resources indigenous to Buffalo County incidental to the extraction of sand and gravel and the quarrying of limestone and other rock for aggregate purposes, including the erection of buildings, and the installation of necessary machinery and equipment incidental thereto, but not the storage of cement, asphalt, or road oils or the mixing of concrete or black top or related materials, provided that any county, town, or municipal government or its agent may store or mix such materials when incidental to the improvement of highways or streets.”  O’Connor argued that because frac sand mines do not extract sand “for aggregate purposes,” they are not allowed as conditional uses.  The Board argued that the phrase “for aggregate purposes” referred only to “the quarrying of limestone and other rock,” and therefore “manufacturing and processing of natural mineral resources indigenous to Buffalo County incidental to the extraction of sand and gravel” was allowed.  Finding both interpretations reasonable, the Court deferred to the Board’s interpretation because under prior caselaw the Board’s decision is entitled to a presumption of correctness.

Consideration of second application.  O’Connor asserted that, after the Board denied R&J’s first application, R&J’s “sole remedy … was to commence a certiorari action in the circuit court.”  The Court disagreed.  It noted that a county may enact a rule prohibiting a party whose application to the zoning board has been denied from filing a new application absent a substantial change in circumstances, but Buffalo County has not done so.  Absent such a rule, an individual is free to submit a second conditional use permit application after the first has been denied, as long as he or she is willing to pay a second application fee.  The Court rejected O’Connor’s assertion that the Court’s conclusion places an unfair burden on those opposing the application and creates an uneven playing field.  “Filing successive applications clearly places a significant burden on the  applicant, as well as those opposing the application.  For each additional application, the applicant must pay an additional review fee.  The applicant must spend time preparing a new application and appearing at new hearings before the board of adjustment.  If the board ultimately grants a successive application, the applicant then faces the prospect that opponents will file an action for certiorari review, in which the applicant will likely choose to participate to defend the permit.”

Alternatively, O’Connor relied on the doctrine of claim preclusion.  “Claim preclusion provides that a ‘final judgment on the merits in one action bars parties from relitigating any claim that arises out of the same relevant facts, transactions, or occurrences.The doctrine has three elements:  (1) identity between the parties or their privies in the prior and present suits, (2) prior litigation that resulted in a final judgment on the merits by a court with jurisdiction, and (3) identity of the causes of action in the two suits.”  In questioning whether the doctrine extends beyond judicial judgments, neither O’Connor nor the Court could cite any Wisconsin case holding that a board of adjustment’s unreviewed denial of an application precludes it from considering a subsequent application submitted by the same party.  Indeed, the Court again pointed to the existence of local rules prohibiting successive applications in support of its conclusion that claim preclusion did not bar the Board in this case from considering R&J’s second CUP application.  “If claim preclusion operated to bar zoning boards from considering successive applications, there would be no need for these successive application rules.”

The Court affirmed the Board’s decision to grant the conditional use permit.

 

 

Issuance of conditional use permit for nonconforming use does not usurp landowner’s nonconforming use rights

by Rachel Greifenkamp

Lorraine White, Trustee v. City of Elk River

(Minnesota Supreme Court, December 4, 2013)

Wapiti Park campground in the City of Elk River, Minnesota began operating in 1973, seven years prior to the City enacting a zoning ordinance that, at first, did not permit campgrounds in that location, then permitted them as conditional uses, then even later again removed campgrounds as either conditional or permitted uses. Wapiti Park applied for and was granted a conditional use permit in 1984 (during the period of time when they were allowed as conditional uses) even though it could have continued operating as a nonconforming use.  When Wapiti Park later violated the conditions of the conditional use permit the city revoked the permit and asserted that Wapiti Park was no longer authorized to operate the campground.  Wapiti Park sued the city.  The district court found in favor of Wapiti Park but the Court of Appeals reversed.  Wapiti Park appealed to the Minnesota Supreme Court.

One question addressed in this case is whether a landowner of a nonconforming use who voluntarily complies with a later-enacted zoning ordinance relinquishes the nonconforming-use status and the right to operate under that status in the future. This issue has been answered in opposite ways in other jurisdictions. The Minnesota Supreme Court concluded that a landowner does not surrender the right to continue a nonconforming use by obtaining a conditional use permit unless the landowner affirmatively waives the right to be treated as a nonconforming use.  Waiving a right in Minnesota requires knowledge of the right and an intent to waive the right. In this case, the City of Elk River had the burden of proving that Wapiti Park had both knowledge of their right to remain a nonconforming use and intended to waive the right when they applied for the conditional use permit.  Although Wapiti Park knew of its nonconforming use rights as a campground in 1984 when it applied for a conditional use permit, the city produced nothing for the record to indicate that Wapiti Park intended to waive or subordinate its rights to the city’s zoning regime.   The court concluded that the conditional use permit did not alter the Park’s status as a nonconforming use.

The second issue addressed was whether the city had authority to terminate the nonconforming use by revoking the conditional use permit. Minn. Stat. secs. 465.01 and 462.57 describe four circumstances under which a nonconforming use may be terminated.  They include eminent domain, discontinuance of the nonconforming use, destruction of the nonconforming use, and judicial determination that the use is a nuisance.  The Minnesota Supreme Court ruled that Wapiti Park may continue to operate the campground as a nonconforming use because these statutes do not include the revocation of a previously issued conditional use permit as a condition of termination, and none of the identified four circumstances applied to Wapiti Park.  Interestingly, the court identified a nonconforming use as “a constitutionally protected property right,” citing a Connecticut court case and not the Minnesota constitution in support of that proposition.

Record sufficient to show council considered all CUP standards

by Kaitlin Heinen

Thomas DeBold v. City of Ellisville, MO
(Missouri Court of Appeals, August 29, 2013)

Wal-Mart was granted a conditional use permit (CUP) from the city council of Ellisville, Missouri on September 5, 2012. The CUP was valid for 12 months via passage of Ordinance No. 3083. Prior to the Ordinance, the CUP had been reviewed by the City’s Planning and Zoning Commission, the City Attorney, the City Planner, St. Louis County, and several other persons and entities. During the July 18, 2012 City Council meeting, the City introduced 27 documents, including reviews done by both City staff and outside consultants.  On September 19, 2012, Thomas DeBold filed an appeal with the City challenging the CUP, but on October 3, 2012, DeBold’s appeal was denied. The trial court found the decision to grant the CUP supported by competent and substantial evidence upon the record, which DeBold appealed to the Missouri Court of Appeals.

First, the court must “consider the ruling of the municipal agency, not the circuit court” and decide only whether the municipal agency’s decision is supported by substantial and competent evidence upon the record. DeBold argued that the trial court applied the incorrect standard of review and “failed to make the required factual findings and legal conclusions.” However, the Missouri Court of Appeals found otherwise after considering the extensive documents reviewed and the factual findings published by the trial court in their “Order and Judgment.”

DeBold also argued that the trial court erred in denying his motion for judgment. City Code Section 400.150 (B)(1) provides that, “[i]f an authorized agent or the leaseholder of the use is requesting the conditional use permit, the property owner must also sign the conditional use permit application.” DeBold claimed that Clarkchester Apartments Association (the landowner) did not sign authorization for the CUP. However, the record shows that all 8 members, who own the Clarkchester apartment buildings, signed the forms, thus satisfying Section 400.150(B)(1) and properly allowing the trial court to deny DeBold’s motion for judgment on these grounds.

Then DeBold argued that the trial court erred in finding that the application for the CUP met the requirements of City Code Section 400.150(F) and that the application was supported by competent and substantial evidence. The City countered that DeBold failed to address 13 of the 17 requirements set out in the Ordinance relating to the granting of a CUP, which thus waives any possible argument on those factors.

In regards to competent and substantial evidence on the record, the court held that there was enough to support the City Council’s decision. As for traffic conditions, the City reviewed the October 11 “Trip Generation and Distribution Technical Memo” and the March 2012 “Traffic Impact Study,” both of which showed that assumptions made on traffic conditions during and after the Wal-Mart Supercenter’s development seemed reasonable and had an overall positive impact. Additionally, the area for the development has been zoned as C-3 Commercial for many years, and the development is similar in size to existing retail centers to the north and east of the area. Also, “there was evidence that the proposed development would not negatively impact traffic, would not increase fire hazards, would increase stormwater capabilities and water quality at the site, would lead to improved utilities, would result in environmental contaminants being cleaned up, would discourage crime through the use of bright lighting, manned store entrances, and surveillance cameras, would increase the City’s revenue, and would catalyze further development within the City”—all compatible uses with the surrounding neighborhood. The City also found “that the proposed project is consistent with the City’s Comprehensive Plan and will feature many of the attributes envisioned as part of the Great Streets Master Plan.” All of this is competent and substantial evidence that the development is consistent with “standards of good planning practices” and is evidence that the proposed use of the development is both reasonable and appropriate for a commercially zoned area.

Finally, DeBold argued that the Ordinance No. 3083 (the CUP) makes no reference to some factors related to the CUP standard.  However, the certified record indicates that City considered all 17 factors required by the City Code. He also claimed that the trial court erred in holding that he failed to adequately plead procedural irregularities before the trial court. Even if he had, “he failed to identify and/or raise any procedural irregularity before the City Council.” To the contrary, “the record demonstrates that DeBold had every opportunity to raise any alleged procedural problem because every document and information necessary to do so was made available to him months before he filed his lawsuit.” (“As public records of the City, these documents were available to any member of the public, from and after the July 18, 2012, meeting.”) Rather, “DeBold has failed to exhaust his administrative remedies [in the context of review of city zoning decisions pursuant to Chapter 89] and thus is not now entitled to judicial review.”

The Missouri Court Appeals affirmed the trial court’s ruling.

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