The North Carolina Court of Appeals has spoken twice in recent weeks on zoning issues. Let’s review.
First, in Atkinson v. City of Charlotte, COA 13-226 (July 29, 2014), the appellate court addressed an application to a text amendment of the North Carolina Supreme Court’s 2012 decision in Wally v. City of Kannapolis, 365 N.C. 449 (2012) . Specifically, the Atkinson Court addressed the City’s argument that Wally stands for the proposition that judicial review is limited to “whether the City Council approved a [consistency] statement” in the course of approving an amendment to the text of the City’s zoning laws.
In Atkinson, the City’s consistency statement provided quite simply, “This petition [to amend the zoning laws] is found to be consistent with adopted policies and to be reasonable and in the public interest.”
The Atkinson Court determined that the above consistency statement, while “more specific” than the “generalized statement” deemed legally insufficient in Wally, still runs afoul of N.C.G.S. 160A-383 and Wally: “The Statement of Consistency adopted by the City Council in the instant case cannot reasonably be said to include an ‘explanation’ as to why the amendment is reasonable and in the public interest under the plain meaning of that term.”
The Atkinson Court reminds that the language of N.C.G.S. 160A-383 and the Supreme Court’s decision in Wally are not just about the adoption of a consistency statement, but an adoption of one — as to “any zoning amendment”, text or map — that “briefly explain[s] why the board considers the action taken to be reasonable and in the public interest.”
Second, in Etheridge v. County of Currituck, COA 13-834 (August 5, 2014), the appellate court addressed the illegality of a case of stipulated spot zoning and issued the first true explication of a relatively new attorney fee statute, N.C.G.S. 6-21.7.
The parties agreed that the County’s rezoning of a 1.1. acre parcel from agricultural to “Conditional District – Heavy Manufacturing”, while the surrounding parcels were virtually all zoned agricultural (with one zoned “general business”), constituted spot zoning. The County, of course, claimed the spot zoning to have a “reasonable basis” while the plaintiffs disagreed with that position.
A. Spot Zoning – Benefits Outweigh Detriments
The County argued that the spot zoning is reasonable because its benefits outweigh its detriments. Specifically, the County argued the proposed recycling center that would result from the spot zoning (upon the issuance of a special use permit, mind you) (1) would “create three to four jobs”; (2) would “allow for dilapidated structures on the property to be rehabilitated”; (3) would “allow county citizens to dispose of their unwanted metals”; and (4) would “make use of a railroad siding”. In addition, a County commissioner stated that he “witnessed support for the rezoning from twenty-eight of thirty-three attendees at a preliminary community meeting regarding” the rezoning.
The Etheridge Court didn’t buy the County’s benefits/detriments argument, noting that “the benefits from the rezoning proposed by defendants are not supported by any evidence presented at the public hearing”. Instead, the Etheridge Court continued, the record before the legislative body supported the plaintiffs’ position opposing the spot zoning, which included the statements of two real estate professionals, the Currituck County Sheriff and a representative from the North Carolina Department of Cultural Resources.
B. Spot Zoning – Relationship of Uses
The County also argued that the spot zoning is “consistent with the uses allowed or occurring on adjacent properties”. The County insisted that the most recent use of the property as a granary is less consistent with the surrounding property than is the proposed recycling center, and, in any event, the requirement of a special use permit for the intended recycling center gives the County another “pass” to control the use on the property.
The Etheridge Court didn’t buy this argument, either. The Court pointed out that past uses are “immaterial” to a spot zoning analysis, and the Court determined that the County and the property owner “have presented no evidence that the recycling center has been designed to be integrated into the surrounding area”.
Note, again, how the record at the legislative stage failed the County and the property owner in an obviously controversial rezoning.
C. Attorney Fees
We allude above to the importance of this decision as the “the first true explication of a relatively new attorney fee statute, N.C.G.S. 6-21.7.” In the interest of time and space, we’ll take a closer look another time.
Suffice it to say, however, that the Etheridge Court affirmed the trial court’s denial of the claim for attorney fees in the face of the County’s illegal spot zoning of the 1.1 acre parcel.
The plaintiffs argue that (1) “illegal spot zoning is always outside the scope of the County’s legal authority and always an abuse of discretion and, therefore, once it is determined that illegal spot zoning occurred, the Trial Court is required to award attorney’s fees”; and (2) “the undisputed facts of the case sub judice are particularly egregious and further demonstrate the County’s abuse of discretion in approving the rezoning.” Notably, the plaintiffs appear to have limited their appeal to their right to “mandatory” award of fees, rather than the discretionary award also provided for in the statute.
The Etheridge Court buys neither argument. As to the first argument, the Court notes the analytical distinction between illegal spot zoning (“outside the scope of  legal authority”) and a mandatory award of fees (“an abuse of  discretion”). As to the second argument, the Court allows the County the benefit of the few statements in the record supporting the rezoning (which, of course, were not sufficient to overcome the illegal spot zoning analysis).
In short, as to fees, the appellate court’s initial in-depth review appears to be a conservative one.
Mike Thelen practices in Womble, Carlyle’s Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.