In Ohio, “in accordance with a comprehensive plan” requirement does not require separate written document

by Gary Taylor

Apple Group, Ltd. v. Granger Township Board of Zoning Appeals
Ohio Supreme Court, June 17, 2015

Apple Group, Ltd., purchased 88 acres of undeveloped land in Granger Township in May 2006.  Apple sought to develop a 44-lot subdivision on approximately one-acre lots on its property.  The property was zoned R–1 Residential, which allows single-family and two-family homes on a minimum lot size of two acres. Instead of applying for a rezoning to R-2 Residential, which would allow up to two dwelling units per acre if they can be served by central sewer and water, Apple applied to the Granger Township Board of Zoning Appeals for 176 variances – four variances for each of the 44 proposed lots. The BZA denied the variance applications, and Apple filed an administrative appeal. The BZA’s decision was affirmed by the Medina County Court of Common Pleas based on the fact that the request for variances was in reality an attempt to rezone the land to a new district. Apple also filed a complaint seeking a declaration that Granger exceeded the authority granted to it under the Ohio Code by adopting a zoning resolution without first enacting a separate comprehensive plan.  A magistrate issued a decision denying Apple’s claims, concluding “the zoning resolution itself meets the statutory requirement of a comprehensive plan, because it has the essential characteristics of a comprehensive plan; it encompasses all geographic parts of the community and integrates all functional elements.” Apple appealed to the Ohio Court of Appeals, Ninth District, and lost.  Apple then appealed to the Ohio Supreme Court.

Ohio Revised Code 519.02(a) provides:

Except as otherwise provided in this section, in the interest of the public health and safety, the board of township trustees may regulate by resolution, in accordance with a comprehensive plan, the location, height, bulk, number of stories, and size of buildings and other structures, including tents, cabins, and trailer coaches, percentages of lot areas that may be occupied, set back building lines, sizes of yards, courts, and other open spaces, the density of population, the uses of buildings and other structures, including tents, cabins, and trailer coaches, and the uses of land for trade, industry, residence, recreation, or other purposes in the unincorporated territory of the township….

Apple did not argue against the reasonableness of the zoning resolution, but rather that the zoning resolution cannot also function as a comprehensive plan.  According to Apple, a zoning resolution must implement a separately-adopted comprehensive plan, and the comprehensive plan must first be created to assure the public that the township’s zoning has been properly considered. Granger argued that its zoning resolution is the comprehensive plan referenced by Ohio R.C. 519.02(a). Thus, the dispute was over the classic question debated since the Standard State Zoning Enabling Act (SZEA) was promulgated: What is the meaning of the phrase “in accordance with a comprehensive plan”?

The Ohio Supreme Court noted that the majority of states adopting the SZEA have taken the view that “comprehensive planning requires some forethought and reasoned consideration, as opposed to a separate plan document that becomes an overarching constitution guiding development.”  Only a minority of states view the “in accordance” language as requiring an independent document separate from the comprehensive zoning ordinance.  After reviewing Ohio case law, the Court concluded that it “has never treated the term ‘comprehensive plan’ as a term of art” as it has come to be used by zoning professionals to refer to the separate written document.  The Court chose instead to adopt a six-part test first articulated by an Ohio Court of Appeals case to determine whether a zoning resolution can satisfy the comprehensive plan requirement:  Does the resolution (1) reflect current land uses; (2) allow for change; (3) promote public health and safety; (4) uniformly classify similar areas; (5) clearly define district locations and boundaries; and (6) identify the use(s) to which each property may be put?”  After finding that all six factors were met by the township’s zoning resolution the Court concluded that the resolution was enacted in “accordance with a comprehensive plan” in satisfaction of Ohio R.C. 519.02. The judgment of the Court of Appeals was affirmed.

Nonconforming use provision preventing re-leasing of mobile home park lot when tenant leaves found unconstitutional

by Hannah Dankbar

State ex rel. Sunset Estate Properties, LLC v. Village of Lodi
Ohio Supreme Court, March 10, 2015

Sunset Properties, L.L.C. and Meadowview Village, Inc. both own property in the village of Lodi where they operate mobile-home parks. Both of the properties are in R-2 zones, which do not allow for mobile-home parks. The mobile-home parks were established before establishing the zone as an R-2 zone, so they are considered legal nonconforming uses under R.C. 713.15.

In 1987 the village of Lodi passed Lodi Zoning Code 1280.05(a), which reads;

Whenever a nonconforming use has been discontinued for a period of six months or more, such discontinuance shall be considered conclusive evidence of an intention to legally abandon the nonconforming use. At the end of the six-month period of abandonment, the nonconforming use shall not be re-established, and any further use shall be in conformity with the provisions of this Zoning Code. In the case of nonconforming mobile homes, their absence or removal from the lot shall constitute discontinuance from the time of absence or removal.

This ordinance is specific towards each individual mobile home; meaning that when a tenant leaves a mobile home and the lot stands vacant for more than six months, Lodi will not reconnect water and electrical service for the new tenant. This results in the mobile home park owners not being able to rent these lots and essentially losing their property. The property owners claim that this ordinance is unconstitutional on its face.

The property owners claim that this ordinance violates the 14th Amendment of the United States Constitution and Section 16 Article 1 of the Ohio Constitution. these clauses provide that no person shall be deprived of life, liberty or property without due process of law. In Akron v Chapman the Ohio Supreme Court held, “Zoning ordinances contemplate the gradual elimination of nonconforming uses within a zoned area, and, where an ordinance accomplishes such a result without depriving a property owner of a vested property right, it is generally held to be constitutional.”  The state and local governments have wide reaching powers to regulate land use, but that power is not unlimited.

The last sentence of the ordinance deprives the owner of the ability to use the property that was considered legal before the adoption of this ordinance. Even though the mobile home tenant is the one who makes the decision to leave, the park owner is the one who loses their property right to use their entire property in a way that was legal before the adoption of this ordinance. This deprivation trumps Lodi’s goals of promoting development and protecting property values. All other parts of this ordinance are constitutional, it is only the last part that cannot be applied.

The dissenting opinion argues that there are non-constitutional issues in this case that can be addressed to resolve this case without making constitutional claims. The property owners claimed that the ordinance conflicted with state law. The majority found the ordinance ambiguous as to whether Lodi would classify the individual lots as nonconforming uses. The dissent argued that this issue should have been addressed and decided before the constitutional issue.

 

 

Divided Ohio Supreme Court finds that state law preempts city ordinances regulating oil and gas drilling

by Gary Taylor

State ex rel. Morrison and the City of Munroe Falls v. Beck
Ohio Supreme Court, February 17, 2015

Beck Energy Corporation obtained a permit from the Ohio Department of Natural Resources to drill an oil and gas well on property within the corporate limits of the City of Munroe Falls. When Beck Energy began drilling, the City filed a complaint seeking injunctive relief and alleging that Beck Energy was violating several provisions of the Munroe Falls Codified Ordinances. These provisions included a zoning ordinance requirement for a zoning certificate for land disturbing activities within the city, and four ordinances directly relating to oil and gas wells and drilling. The trial court issued a permanent injunction prohibiting Beck Energy from drilling until it complied with all local ordinances. The Ohio Court of Appeals reversed the trial court, concluding that state law preempts local control over the permitting, location, and spacing of oil and gas wells and production operations within the state of Ohio.  Munroe Falls appealed to the Ohio Supreme Court.

In a 4-3 opinion, The Ohio Supreme Court affirmed, holding that the Home Rule Amendment does not grant the City the power to discriminate against, unfairly impede, or obstruct oil and gas activities and production operations that the State has permitted under chapter 1509.  Ohio R.C. 1509.02 gives state government “sole and exclusive authority” to regulate the permitting, location, and spacing of oil and gas wells and production operations within Ohio.  In 2004, the General Assembly amended Chapter 1509 to provide “uniform statewide regulation” of oil and gas production within Ohio and to repeal “all provisions of law that granted or alluded to the authority of local governments to adopt concurrent requirements with the state.” The majority of the Court found that the preemption clauses of R.C. 1509.02 clearly prevent local governments from imposing their own regulations on the oil and gas industry.

In his dissent, Justice Lanzinger countered that “the broad language of a preemption clause is not sufficient to create a conflict. We have never held that a preemption statement alone is sufficient to divest municipalities of their constitutional right to home rule. To the contrary, a declaration by the General Assembly of its intent to preempt a field of legislation ‘does not trump the constitutional authority of municipalities to enact legislation pursuant to the Home Rule Amendment, provided that the local legislation is not in conflict with general laws.'”  Justice Lanzinger pointed out that Chapter 1509 does not specifically preempt local zoning, and also argued that the local ordinances of Munroe Falls do not present specific conflicts with Chapter 1509.

Joining in Justice Lanzinger’s dissent, Justice O’Neill went on to write:
Let’s be clear here. The Ohio General Assembly has created a zookeeper to feed the elephant in the living room. What the drilling industry has bought and paid for in campaign contributions they shall receive. The oil and gas industry has gotten its way, and local control of drilling-location decisions has been unceremoniously taken away from the citizens of Ohio. Under this ruling, a drilling permit could be granted in the exquisite residential neighborhoods of Upper Arlington, Shaker Heights, or the Village of Indian Hill—local zoning dating back to 1920 be damned.

 

State law authorizes Board of Elections to keep challenge to development plan off of ballot

by Hannah Dankbar

State ex rel. Ebersole v. Delaware Cty. Bd. of Elections
Ohio Supreme Court, September 19, 2014

In June 2014 the City Council of Powell, Ohio approved Ordinance No. 2014-10, which was a development plan for property in downtown Powell. Three citizens circulated petitions to put three items on the  ballot November 2014: to block the Ordinance from taking effect, an initiative to pass an ordinance to repeal Ordinance No. 2014-10, and an amendment to the city charter that would nullify Ordinance No. 2014-10. The City Council approved the referendum and initiative, but the Delaware County Board of Elections refused to put it on the ballot.  The citizens sought a writ of mandamus to get the referendum on the ballot.

The Board of Elections validated the necessary amount of signatures for each thing in order to get it on the ballot. In August 2014 the board met to discuss the protests of the referendum and initiative. The board accepted that the referendum was administrative in nature and therefore not allowed, this held for the initiative as well and that the protest against both petitions on the grounds that the format of the petitions did not comply with the Powell City Charter and forms prescribed by the secretary of state. As a result, none of the actions were certified to make the November ballot. In September the realtors filed a mandamus action, which is denied.

When City Councils act in an administrative, rather than legislative, capacity, their resolutions and ordinances are not subject to referendum. The Board of Elections rejected the referendum petition because it believed that Ordinance No. 2014-10 was passed by the city council in its administrative capacity. The citizens argue that  (1) passing Ordinance 2014-10 was a legislative act, (2) a challenge to the substance of a referendum is unripe until the referendum is approved and (3) that the board has only ministerial duties in the referendum process and lacks authority to review the substance of the referendum.

(1) The test for determining whether an action is legislative or administrative is “whether the action taken is one enacting a law, ordinance, or regulation, or executing a law, ordinance, or regulation already in existence.” City ordinances that adopt final development plans pursuant to preexisting planned community development, without changing the zoning, are not subject to referendum. In fact, the Ohio Supreme Court has made it clear in prior cases that the Board of Elections is required to withhold the initiative and referendum from the ballot.  In the present case, Ordinance 2014-10 complied with the preexisting requirements for the Downtown Business District and the Downtown District Overlay District and did not require any zoning changes.

(2) The citizens alternatively argued that there is no “case or controversy” until the referendum and initiative have been passed.  Thus, the Board of Elections’ objection was premature.  However, the Board of Elections has an affirmative duty to review the content of proposed referenda and initiatives. The best, and only, time to fulfill this duty is before the election.

(3) The realtors argue that the Powell City Charter does not give the Board of Elections the authority to review the content of referenda or initiatives; rather their job is to certify the number of electors.  The court disagreed. The Powell charter is silent on the question of the board’s power to conduct protests, and therefore no conflict exists. Moreover, Article VI, Section 6.05 of the charter expressly states that where the charter is silent concerning referendum and initiative procedures, state law will govern. Under state law boards of elections are required to, ““[r]eview, examine, and certify the sufficiency and validity of petitions.” As set out in state law, the board was within its statutory authority to conduct the protest hearing.

The Ohio Supreme Court denied the writ filed by the citizens.

In the end, the Cleveland Clinic got its helipad

by Hannah Dankbar

Cleveland Clinic Found. v. Cleveland Bd. of Zoning Appeals
(
Ohio Supreme Court, November 5, 2014)

The Board of Zoning Appeals of the City of Cleveland denied a permit to Cleveland Clinic Foundation and Fairview Hospital to build a helipad on the roof of a two-story addition to the hospital.

The land that the hospital sits on is zoned as a Local Retail Business District, meaning “a business district in which such uses are permitted as are normally required for the daily local retail business needs of the residents of the locality only.” (Cleveland Code of Ordinances (C.C.O.) 343.01(a)). The hospital has been granted many variances since this zoning was put in place.

In October 2010, the Clinic filed an application with the City’s Department of Building and Housing seeking approval of three construction projects, including the construction of the helipad. The City cited C.C.O. 343.01(b)(8), which says “accessory uses” are allowed “only to the extent necessary [and] normally accessory to the limited types of neighborhood service use permitted under this division,” and rejected all three projects.

The Clinic appealed to the Board of Zoning Appeals (BZA).  Opponents testified about potential noise and traffic problems.  The hospital representatives testified that almost all of the hospitals in the Cleveland metropolitan area have helipads, and that the use of helicopters in the transport of patients reduces travel time and, therefore, saves lives.   The BZA approved the other two projects, but denied the permit to construct the helipad citing C.C.O. 343.01(b)(8) by saying, “those uses that the Zoning Code characterizes as retail businesses for local or neighborhood needs would not involve a helipad as normally required for the daily local retail business needs of the residents of the locality.”

From here the Clinic appealed the denial to the Cuyahoga county Court of Common Pleas, who reversed the decision. This court used C.C.O. 343.01(b)(1) that provides that with limited exceptions, all uses permitted in the Multi-Family District are also permitted in the Local Retail Business District. Hospitals are expressly permitted in the Multi-Family district, and so the Court of Common Pleas concluded that a helipad is “customarily incident to” a hospital and therefore qualifies as an “accessory use.”

The BZA appealed to Eighth District Court of Appeals, who reversed again. The court found that ambiguity exists in C.C.O., and ultimately decided to give deference to the BZA and its original decision, saying “When the BZA reasonably relies on a code provision, its determination should hold so long as its decision is not unconstitutional, illegal, arbitrary, capricious, unreasonable, or unsupported by the preponderance of substantial, reliable and probative evidence on the whole record,” This is to be true regardless of the fact that the law requires any ambiguity in a zoning ordinance to be construed in favor of the property owner.

The Supreme Court of Ohio determined that the wrong standard of review was used by the Eighth District Court of Appeals. Rather than review the BZA’s decision for clear error, the Court of Appeals should have been reviewing the Court of Common Pleas decision, and only overruling the Court of Common Pleas if the decision is not supported by a preponderance of reliable, probative and substantial evidence. Reversal is only appropriate when there is an error in the application or interpretation of law.

The Supreme Court of Ohio refers to C.C.O. 325.02 and 325.721 (to define “accessory use”), 337.08 (types of buildings permissible in a Multi-Family District), and 343.01(b) (permitted buildings in a Local Retail Business District). “Given the record before us, we have little trouble concluding that the preponderance of substantial, reliable, and probative evidence supports the [Court of Common Pleas’] conclusion that helipads are customarily incident to hospitals, at least in Cleveland.”

Ohio Township’s impact fees constituted impermissible tax

by Victoria Heldt

Drees Company et al., v. Hamilton Township et al.
(Supreme Court of Ohio, May 31, 2012)

In the last twenty years, Hamilton Township in Ohio has experienced significant growth in its population and development.  In response to the growth, the Township adopted a resolution that required potential developers to pay impact fees in order to apply for and acquire a zoning certificate to develop in an unincorporated area.  The stated purpose of the impact fee was “to benefit the property by providing the Township with adequate funds to provide the same level of service to that property that the Township currently affords previously developed properties.”

The fee included four categories:  a road-impact fee, a fire-protection impact fee, a police-protection-impact fee, and a park-impact fee.  The amount assessed to each property was determined by its use.  Properties to be used for single-family dwellings were assessed a total of $6,153 while those being developed for retail/commercial purposes were assessed a $7,962.  The money received was placed into separate accounts (one for each category) not put into the general fund.  The funds in each account may be used only for the purpose of each account.

Drees Company, among others, alleged that the impact fees are contrary to Ohio law and are unconstitutional.  Hamilton Township is a limited-home-rule township that may “exercise all powers of local self-government within the unincorporated area of the township…and shall enact no other taxes other than those authorized by general law.”  Drees Company argued that the impact fee is really a tax and, therefore, the Township was not authorized to enact the resolution.  The trial court ruled in favor of the Township.  It stated that Hamilton Township “may make and fund improvements to benefit new development by use of its system of impact fees, because the resolution is not in conflict with any other Ohio statute, and because it is sufficiently narrowly tailored to provide services to the class of fee payers in exchange for the fees.”  The Court of Appeals affirmed, noting that the impact fee did not constitute a prohibited form of taxation.  Drees further appealed the case.

In this case, the Supreme Court of Ohio had to distinguish a fee from a tax.  It looked to precedent in its analysis to note how the two have been historically contrasted.  In State ex rel. Petroleum Underground Storage Tank Release comp. Bd. V. Withrow, the Court looked to “the substance of the assessments and not merely their form.”  It had to determine whether assessments imposed on owners and operators of underground storage tanks (“USTs”) were taxes.  The stated purpose of the fees was “to reimburse owners and operators of USTs for the costs of corrective actions in the event of a release of petroleum into the environment and to compensate third parties for bodily injury and/or property damage resulting from such occurrences.”

In Withrow, the Court determined the assessments to be fees for four reasons: (1) the fees were imposed to further regulatory measures to address environmental problems caused by leaking USTs; (2) the funds were never placed in general funds and were to be used strictly for problems related to USTs; (3) the fee was in exchange for protection from UST leaks; and (4) if the fund exceeded a certain amount, no assessment would be charged that year.  The Court noted that, when applying the factors from Withrow to this case, the impact fees seem to constitute taxes.  The fees lack any sort of regulatory function, can be spent on typical township expenses, are not in exchange for any particular service, and are not responsive to need.

The Court next looked to Am. Landfill, Inc. v. Stark/Tuscarawas/Wayne Joint Solid Waste Mgt. Dist., where the Sixth Circuit Court of Appeals was faced with a similar situation.  It had to determine wither assessments imposed by Ohio solid-waste-management districts on people disposing of waste were fees or taxes.  The fees were to be used for various things pertaining to the county’s waste management plan.  The court employed a three-factor analysis that considered (1) the entity that imposes the assessment; (2) the parties upon whom the assessment is imposed; and (3) whether the assessment is expended for general public purposes, or sued for the regulation or benefit of the parties upon whom the assessment is imposed.

The Court noted that an assessment imposed by a legislature is more likely to be a tax than one imposed by an administrative agency.  Furthermore, an assessment imposed upon a broad class of parties is more likely to be a tax than one imposed on a narrow class.  The third factor, the use of the assessment, is the predominant factor.  Applying the Am. Landfill test to this case points to the fact that the impact assessments constitute taxes.  They were imposed by a legislative body, not an administrative one.  They were also imposed on a fairly large group of people.  Furthermore, the funds were to be used for public benefit, not solely for the benefit of those property owners.

The Court noted that an essential question was whether the assessments were for public or private benefit.  It noted that the goal of the assessment was “for the township to have the necessary funds to allow all properties in the township to maintain their same level of service despite recent, rapid growth.”  The resolution itself stated it was for “the protection of the health, safety, and general welfare of the citizens and property owners of the Township.”  Consequently, the Court concluded that the assessments constituted a tax and were therefore not authorized.  It reversed the decision and remanded it to trial court.

Ohio Supreme Court rules on agricultural exemption from township zoning

by Gary Taylor

NOTE:  The agricultural exemption to county zoning in Iowa is a constant source of consternation. Take heart, Iowa landowners and county officials; this recent case from Ohio should give you comfort that you are not alone in wrestling with the intent and interpretation of ag. exemption legislation.

Terry v. Sperry
(Ohio Supreme Court, July 12, 2011)

The Sperrys owns property in Milton Township, Ohio on which they live and operate a winery.  The property is zoned R-1, Residential.  Before starting the winery, the Sperrys contacted the township zoning official and inquired whether a winery could be located on the property.  They were told that the business was allowed as a home occupation under the terms of the ordinance, and that a written approval or permit need not be issued.  The Sperrys obtained the  state and federal permits necessary to operate a winery.  They started grape vines and harvested grapes, obtained grapes and grape juice from outside sources, and made and bottled wine on the premises.  Five percent of the sales of bottled wine sold on the premises were from grapes planted, cultivated and harvested on the property.  Shelf-stable foods were also sole on the premises.

In 2008, the township filed a complaint for temporary and permanent injunctions to stop the use of the property as a retail business and restaurant in an R-1 zone, based on neighbors’ complaints.  The parties eventually agreed that the issue for the court was whether the Sperrys’ operation qualified as an agricultural use exempt from zoning regulation by Ohio Revised Code 519.21(A).  The trial court and the Ohio Court of appeals both answered this question in the negative (siding with the township).  The Sperrys appealed to the Ohio Supreme Court.

After going through the litany of cases holding that zoning regulations should be strictly construed in favor of the landowner, the Supreme Court turned to the relevant Ohio code provisions.  The code R.C. 519.21(A) states that the township zoning enabling act “confer[s] no power on any township zoning commission, board of township trustees, or board of zoning appeals to prohibit the use of any land for agricultural purposes or the construction or use of buildings or structures incident to the use for agricultural purposes of the land on which such buildings or structures are located, including buildings or structures that are used primarily for vinting and selling wine and that are located on land any part of which is used for viticulture….”  R.C. 519.01 includes in the definition of agriculture “…the processing, drying, storage, and marketing of agricultural products when those activities are conducted in conjunction with, but are secondary to, such husbandry or production.”  The township argued first that the Sperrys’ activities do not meet the definition of agriculture because only five percent of the wine sold on the premises was made from grapes grown on the premises, making the sales and processing the primary use, and the grape growing the secondary use.  The Supreme Court agreed; however, it went on to state that while the winery itself does not constitute an agricultural use by the general definition of “agriculture,” the exemption in R.C. 519.21(A) contains no requirement that the vinting and selling of wine be a secondary or subordinate use of the property, or that viticulture be the primary use.  On the contrary,

If there is agricultural use of the property (viticulture), the township may not regulate the zoning of buildings that are used primarily for vinting and selling wine. The General Assembly included a specific example of what constitutes “the use of buildings or structures incident to the use for agricultural purposes of the land on which such buildings or structures are located” when it followed that phrase with “buildings or structures that are used primarily for vinting and selling wine and that are located on land any part of which is used for viticulture.” Therefore, under R.C. 519.21(A), a township may not prohibit the use of buildings for the vinting and selling of wine on a property as long as the property also cultivates grapes for wine making….Had the General Assembly intended that viticulture must be the primary use of the property to qualify under R.C. 519.21(A) for exemption from township zoning, it could have easily expressed that requirement.

The Court then referenced as an example R.C. 519.21(C) which requires that a farm market receiv 50 percent or more of its gross income from produce raised on farms owned or operated by the market operator before being exempt from township zoning.  Under the “clear and unambiguous” language of the code, therefore, the Sperrys’ operation was exempt from township zoning.  The Supreme Court reversed the judgment of the Court of Appeals

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