Commercial Zoning

North Carolina Court of Appeals Discusses "Waiting Periods" Between Renewed Rezoning Petitions

Rezoning land for development — say, from single-family residential to multi-family residential — involves a substantial amount of work. Let’s consider the theoretical order of a theoretical rezoning process. (1) The landowner will prepare a petition requesting the change in zoning. (2) The local government staff will make a review of the proposed zoning change. (3) The neighboring landowners will monitor the proposed rezoning, attend public hearings on the matter, and voice concerns over the proposal incluyding the filing of protest petitions. (4) The municipal planning board and the governing board of the local government will rule on the proposal. That’s only four steps, but it’s a significant four steps.

“Because rezoning involves so much time, effort, and money,” writes Professor David Owens of the UNC School of Government, “most local zoning ordinances require a waiting period before a second rezoning proposal for that land can be considered.” He continues: “For example, a local zoning ordinance may provide that if a rezoning proposal is denied, no other rezonings will be considered for that property for a period of six months, a year, or even two years. This helps prevent the waste of public and private resources spent on repetitious reviews of the same project.”

As you can probably imagine, such a waiting period can be difficult for developers. After all, time = money. That’s an “equals” sign for the lawyers in our audience.

So, what happens if “that land” included in the rezoning petition, or, heck, the petition itself, is tweaked in a manner to circumvent the waiting period? In other words, would a waiting period apply if in a second rezoning petition (following an unsuccessful first petition) the developer reduced the acreage included in the original rezoning petition or included new conditions to the rezoning? The North Carolina Court of Appeals kicked off the new year by taking up this question in the unpublished Conoley v. Town of Wendell.

Facts
In January 2007, a developer filed a rezoning petition (First Rezoning Petition) seeking to change the classification of a 57.87 acre parcel from its current single-family zoning to a kind of multi-family zoning. This follows the simple mathematical principle that more dense development = more return on investment, or Trump’s third law. The First Rezoning Petition also included six conditions, to which developer added another three in the process to total nine conditions. In the presence of a valid protest petition, a term and process of art, developer needed a favorable 3/4 supermajority vote from the governing board to garner its rezoning, which developer could not secure.

The First Rezoning Petition was denied in April 2007. What’s more, the Town’s zoning code contains a waiting period applicable to failed rezoning petitions: “When a petition for amendment is denied by the Town Board of Commissioners, a period of twelve (12) months must elapse before another petition for the same change previously involved may be submitted.” Ok, let’s look at our calendars. That means “another petition for the same change” as the change proposed in the First Rezoning Petition cannot come before the Town Board until, at the ealiest, April 2008. Think that’ll happen? Let’s see. April … Ma-

May! Yep, in May 2007, some six weeks after the First Rezoning Petition failed, developer filed a second rezoning petition, an exact redundancy of the First Rezoning Petition. Whoops, that may not fly. So, in June 2007 — now we’re at two months, even assuming no “relation back” isues — developer filed an amended second rezoning petition (Second Rezoning Petition), which contained an three conditions in addition to the nine conditions cribbed from the First Rezoning Petition. So, just to summarize, the Second Rezoning Petition merely differs from the First Rezoning Petition insoar as it contains three additional conditions.

Well, the Town’s Planning Board wasn’t fooled. Having voted previously to recommend approval of the First Rezoning Petition, the Planning Board votes in June 2007 against recommending approval of the Second Rezoning Petition. At this point, the developer likely sees the wheels coming off. Consequently, and running out of ammunition, developer delivers to the Town Board in September 2007 a letter withdrawing a controversial 16 acres of land from the Second Rezoning Petition. Again, to summarize what matters, the Second Rezoning Petition now differs from the First Rezoning Petition in that it contains three additional conditions and 16 fewer acres of land.

This time around, some five months after the failure of the First Rezoning Petition, the Town Board approves the Second Rezoning Petition. Enter: lawsuit claiming the rezoning invalid for failure to comply with the “twelve-month” waiting period.

Holding
As the Court points out, the “central dispute concerns the construction of the phrase ‘the same change previously involved’ in the Town’s Zoning Code, section 154.151.”

In essence, the Court reports, the Town uses the out-of-date Section 154.151 to effectuate conditional use zoning. But a proper conditional use procedure would not raise such “waiting period” issues insofar as conditions are often added, modified, and/or taken away — it’s a “moving target” — and a waiting period would only stymie the “exceedingly valuable” process. To wit, each and every modification would push the conditional use process back another year.

Thus, the Court concludes: “[T]he conditional use zone ultimately adopted contained a total of twelve enumerated restrictions [up from nine restrictions] and a decrease in the area of the land Pepper Street sought to rezone. Because conditional use zoning necessarily envisions modifications and the adoption of restrictions, it presents something of a ‘moving target’ during the course of a proposal’s consideration and tailoring as the municipality seeks to employ conditional use zones to balance conflicting demands. Accordingly, it is our conclusion that the second petition sought a different change than the first petition….” The Court affirmed summary judgment in favor of the Town and the developer.

This sounds a little like function over form. But the Court does an admirable job of pointing to the uniqueness of these facts rather than, in effect, steamrolling all such rezoning petition “waiting periods” common throughout the State. Of course, that doesn’t stop folks from waving the decision around in the purpose for which it isn’t intended.

Mike Thelen is a lawyer in Womble Carlyle’s Real Estate Litigation practice group. He regularly represents a wide variety of clients in land use and land development issues, from local governments to businesses, in both state and federal venues throughout North Carolina.

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