Substantial evidence supported ZBA’s denial of conditional use permit for liquor sales

by Gary Taylor

Shop N Save Food v. City of Des Moines Zoning Board of Adjustment
Iowa Court of Appeals, August 2, 2017

Shop N Save applied for a conditional use permit (CUP) that would allow the business to sell wine and beer.  The store in question is located in a C-1 neighborhood retail commercial district in Des Moines.  Previous owners of the store had been permitted to sell liquor, beer, and wine, but the store’s liquor license was suspended for the year leading up to the CUP application, and due to changes in the city’s zoning regulations the new owner was required to seek a CUP to resume alcohol sales.

At the beginning of the hearing on the CUP, city staff presented its report to the Des Moines Zoning Board of Adjustment (ZBA) recommending approval of the CUP subject to ten conditions.  Staff presented the ZBA with letters from local neighborhood associations, as well as police reports from the neighborhood.  Staff noted, however, that the Shop N Save had either been closed or barred from selling alcohol for most or all of the time covered by the police reports.

Counsel for Shop N Save, in his presentation, conceded “there had been problems in the past” with crime around this Shop N Save, but asserted the new owner was willing to work with the neighborhood associations to address those problems.  In responding to the testimony of the neighborhood association representatives that voiced concerns about crime, Shop N Save counsel resisted their recommendations for the imposition of conditions over and above those recommended by staff, and suggested the best course would be to “come up with a plan together.”

ZBA members questioned the legitimacy of the ownership transfer. Shop N Save counsel acknowledged that the store was being run by “a combination of [old and new management] but it’s generally the new management…running the store” and admitted that the official transfer of ownership had not yet occurred.

In a 4-1 vote the ZBA denied the CUP, citing concerns about the ambiguity in the ownership transfer and the problematic history of the location.  Shop N Save appealed this decision to the district court, which affirmed the denial, finding substantial evidence for the ZBA’s decision.  Shop N Save appealed to the Iowa Court of Appeals.

The Court of Appeals highlighted several well-settled points of law concerning the consideration of conditional use permits by zoning boards of adjustment, and by courts reviewing those decisions, that are worth reviewing:

  • A conditional use permit is meant to provide flexibility in what otherwise would be the rigidity of zoning ordinances, while at the same time controlling troublesome aspects of somewhat incompatible uses by requiring certain restrictions and standards.
  • It is the burden of the applicant to show that all the conditions of the ordinance are satisfied.
  • A decision by a zoning board of adjustment enjoys a strong presumption of validity.
  • A board may deny a conditional use permit for reasons relating to public health, safety, and welfare, but generalized or unsupported neighborhood opposition does not, by itself, provide a legally sufficient reason for a CUP denial.
  • If the reasonableness of the board’s action is open to a fair difference of opinion, the court may not substitute its decision for that of the board.
  • An appellate court is bound by the district court’s factual findings if they are supported by substantial evidence in the record. Evidence is “substantial” if a reasonable person would find it adequate to reach the given conclusion, even if a reviewing court might draw a contrary reference.

Shop N Save argued that the ordinance requirement that “the proposed location, design, construction and operation of the particular use adequately safeguards the health, safety, and general welfare of persons residing in the adjoining or surrounding residential area” may not even apply to the sale of beer and wine because the sale of such products is separate from the “physical characteristics of the property.”  The Court of Appeals rejected this argument, finding that the language is broad enough to regulate not only the location, design, and construction of the business but its operation as well.  The Court further found that the ZBA’s denial was based on more than generalized or unsupported neighborhood opposition, and included reliance on specific incidents described in neighbors’ testimonies, and on the dramatic reduction in crime that resulted when liquor sales were ended at a similarly situated convenience store in another neighborhood.  Finally, the Court found the ZBA was well within its authority to consider the pending owners’ “tepid” responsiveness to neighbors’ serious reservations as a signal that past problems were likely to continue into the future, regardless of any conditions the ZBA could impose.

The ZBA’s denial was affirmed.