The café is now owned by Vic and Ilsa’s grandson Sam.  While the business has been stable over the years, Sam believes it needs to be substantially modernized to remain viable.  He would like to do the following.  First, he would like to build a modest addition to the side of the building to expand the café’s small bar area.  This would allow Sam to add the piano bar of his dreams.  Second, he would like to convert a large unused back room into extra seating space for the café.  This room has only been used for storage for decades.  Some say that Sam’s grandparents used this back room for an illicit gaming operation in the café’s early days, but that is another story.  Now, with some modest renovations, it could add 30% more seating space, helping to pay off the loans he needs to take out for his renovations.  Finally, he would like to completely replace the building’s wiring, plumbing, and heating/air conditioning systems, and while he is at it, replace all of his kitchen equipment with modern appliances.  He knows this will cost a good deal, but he wants to make the building comfortable, more functional, and bring it up to modern code standards.

Sam ran these ideas by some of his regular Friday evening bar customers as several of them were builders and contractors knowledgeable about such things.  One of the regulars happened to be Hank Strasser, a retired builder who is now the town zoning officer.  Hank agreed that Sam’s plans would be a great improvement for the café, but immediately saw a red flag.  The building housing Rick’s is structurally sound and meets all of the town standards regarding setbacks and the like.  But the cafe is not allowed in this zoning district since the land is zoned for residential rather than commercial uses.  Hank told Sam that he could always seek a rezoning, but that would be a long shot in this situation.  The neighbors had vigorously opposed several prior proposals to rezone parcels for commercial use and the town’s new land use plan calls for the entire area to stay predominately low density residential.  Hank explained that since Rick’s was a nonconforming use, the ordinance prohibits enlargement or expansion.  “What, pray tell,” says Sam, “does that mean for my plans to improve the café?”

The answers are not as certain as one might think, especially if the town ordinance only has the typical brief provisions regulating nonconformities.  There are important policy implications to consider when framing limits on nonconformities, balancing the interests of the landowner, the neighbors, and the community.  A local government should carefully consider these implications and make clear, explicit policy choices when the restrictions are adopted.

The general law on limiting nonconformities is fairly straightforward.  If a land use, structure, or lot was lawful when created, the ordinance making it nonconforming is generally applied prospectively only. Preexisting conditions are allowed to continue.  A common restriction on nonconformities though is that they not be expanded or enlarged.  The courts have readily accepted that concept. The court noted over three decades ago that while zoning ordinances are “in derogation of the right of private property” and should be construed in favor or free use of property, “our courts have nevertheless limited the expansion of nonconforming uses with a view toward their eventual elimination.”  Atkins v. Zoning Board of Adjustment, 53 N.C. App. 723, 729, 281 S.E.2d 756, 759. More recently the court observed, “Prohibition of the expansion of a nonconforming use is lawful and consistent with good zoning practices.”  Huntington Properties, LLC v. Currituck County, 153 N.C. App. 218, 223, 569 S.E.2d 695, 699 (2002).

Sam has proposed three things:  (1) a structural addition to enlarge his existing bar area; (2) an expansion of seating space within the building; and (3) an extensive renovation of fixtures within the building.  Assume in our case the town’s ordinance has a typical provision on nonconformities, such as, “A nonconforming use or structure may not be enlarged or expanded.”  Assume also that the ordinance and does not further define those terms.  Would any of these be a prohibited enlargement or expansion of Rick’s Cafe?

1.  Addition to Structure Housing Nonconforming Use

The first question is whether Sam can add space to the building in order to expand his bar area.

Most ordinances prohibit increasing the size of a nonconforming building.  These limits are clearly applicable when it is the structure itself that is nonconforming, such as a building that sits in a setback area.  But in our case the structure housing the café is not in itself nonconforming.  It is the commercial use of the structure that cannot be enlarged or expanded according to the ordinance.  The question is whether a conforming structure can be expanded within the dimensional limits of the ordinance if it houses a nonconforming use.

Several cases have upheld limits on additions to structures that house nonconforming uses.  Construction of a new pilot’s lounge and airplane-storage building at a nonconforming airport in a residential district was prohibited in City of Brevard v. Ritter, 14 N.C. App. 207, 188 S.E.2d 41 (1972). The construction of a storage building to enclose a previously open storage area was held to be an unlawful enlargement of a nonconforming use in Cannon v. Zoning Board of Adjustment, 65 N.C. App. 44, 308 S.E.2d 735 (1983).  The court upheld prohibiting construction of a four-story parking structure to replace a surface parking lot at a nonconforming hotel in Four Seasons Management Services, Inc. v. Town of Wrightsville Beach, 205 N.C. App. 456, 695 S.E.2d 456 (2010).

This is an area in which careful wording in a zoning ordinance is needed to clearly establish the governing board’s intention.  If the intent is to prohibit any structural additions to a building housing a nonconforming use, that limitation should be specified in the ordinance so folks like Sam and his neighbors will not have to go to court to find out the scope of the restriction.

2.  Intensification of Nonconforming Use

What about Sam’s proposal to convert a storage room into additional seating capacity for his café?

The majority rule nationally is that an increase in volume or intensity of a nonconforming use is generally not presumed to be prohibited.  Several North Carolina cases have held an intensification of a nonconforming use within the footprint of the existing nonconformity is permissible unless expressly prohibited.  In Stegall v. Zoning Board of Adjustment, 87 N.C. App. 359, 361 S.E.2d 309 (1987), review denied, 321 N.C. 480, 364 S.E.2d 671 (1988), the court allowed the owner of a nonconforming cemetery that contained only in-ground burial plots to add an above-ground mausoleum.  The court ruled the mausoleum would be not an expansion of the nonconforming use but an intensification that was allowed by the terms of the ordinance.  Similarly, the court in Stokes County v. Pack, 91 N.C. App. 616, 372 S.E.2d 726 (1988), review denied, 324 N.C. 117, 377 S.E.2d 246 (1989), allowed additional vehicles to be brought into a nonconforming salvage yard provided they only occupied the space actually being used for junk storage when the ordinance was adopted.  In Clark v. Richardson, 24 N.C. App. 556, 211 S.E.2d 530 (1975), the court held that the enclosure of a porch on a nonconforming grocery store did not constitute enlargement or extension of the nonconformity.

Under this rationale, Sam’s proposal to add seats within the existing building housing his nonconforming café could be viewed as a permissible intensification rather than an impermissible expansion of a nonconforming use.

Other cases have, however, upheld limits on increasing the scale of nonconforming uses even where that did not involve use of a larger footprint.  In  Kirkpatrick v. Village Council of Pinehurst, 138 N.C. App. 79, 530 S.E.2d 338 (2000), the petitioner owned a nonconforming campground for recreational vehicles.  The ordinance provided that nonconforming uses must not be “enlarged or increased, nor shall any non-conforming use be extended to occupy a greater area of land” than occupied at the time it became nonconforming.  The court held that this provision not only precluded expansion of the campground to portions of the parcel beyond the area originally occupied, it also precluded renovations that would add additional campsites within the portion of the site already being used.  The court applied a similar analysis in Huntington Properties, LLC v. Currituck County, 153 N.C. App. 218, 569 S.E.2d 695 (2002), to find that only the spaces within a nonconforming mobile home park that were actually in use (as opposed the number of permitted spaces) constituted the existing nonconformity and that expansion beyond that number of spaces could be prohibited.  If expressly stated in the ordinance, the courts will also uphold a prohibition on the expansion of space allocated to a nonconforming use within the same building.  Fantasy World, Inc. v. Greensboro Board of Adjustment 128 N.C. App. 703, 496 S.E.2d 825, review denied, 348 N.C. 496, 510 S.E.2d 382 (1998).

Whether Sam’s conversion of the storage room would be allowed then depends on the exact terms of the ordinance, not upon some general principle of state law.  Clarity in the ordinance language defining impermissible expansion of a nonconformity is again the critical factor.  If increases in the intensity of use are intended to be included within the prohibited expansion of a nonconformity, the terms of the ordinance must clearly include that restriction.

3.  Modernization of Structure Housing Nonconforming Use

What about Sam’s proposal to upgrade his electrical, plumbing, and HVAC systems and to improve his kitchen equipment?

The general rule is that improvements required to maintain compliance with other laws are not a prohibited enlargement or expansion of a nonconformity.  In re O’Neal, 243 N.C. 714, 92 S.E.2d 189 (1956), is the leading North Carolina case on this point.  The petitioners had a nonconforming nursing home (an institutional use not permitted in the applicable residential zoning district).  They needed to replace the existing frame building with a modern fireproof building in order to comply with updated building code requirements. The court interpreted the ordinance to allow reconstruction in order to comply with the building code, provided that the new building was limited to the same scale in terms of numbers of patients served.  The court in MNC Holdings, LLC v. Town of Matthews, ___ N.C. App. ___, 735 S.E.2d 364 (2012), recently applied this concept to hold that alterations to a nonconforming medical waste incinerator, which was located in a residential zoning district, made to comply with environmental laws were permitted since the ordinance allowed alterations “when required by law.”

So to the extent Sam’s modernizations are needed to bring the café building up to code, they would almost certainly be allowed.  The courts are particularly sympathetic when the owner is required by law to make the improvements.

His kitchen upgrades would probably be allowed as well, as long as they are not so extensive as to trigger the limits on repair versus replacement discussed in an earlier blog post.  But he should be aware that some cases have held it is not permissible to modernize equipment for a nonconforming use if that would result in a substantial increase in the impacts of the nonconforming use.  In Malloy v. Zoning Board of Adjustment, 155 N.C. App. 628, 632, 573 S.E.2d 760, 763 (2002), the court held it would be an unlawful expansion if a nonconforming welding and gas supply business replaced a liquid oxygen storage tank with a substantially larger tank because that would increase the scope of the nonconforming business by allowing additional and faster service to its customers.  Similarly, in APAC-Atlantic, Inc. v. City of Salisbury, 210 N.C. App. 668, 709 S.E.2d 390 (2011), the court upheld a determination that modernizing a nonconforming asphalt plant in ways that would allow a significant increase in its capacity and lower its operating costs was a change in the scope of the use and an impermissible enlargement.

Some courts might view Sam’s kitchen proposal as a permissible intensification of the use.  Other courts may view it as an impermissible enlargement.  This is once again a point on which ordinance clarity can avoid confusion and litigation.

So what are the lessons for local governments?  The main one is that clarity and specificity in drafting provisions regarding limits on nonconformities is essential.  It would be nice if the ordinance could simply and only say “No enlargement or expansion of a nonconforming use or structure is allowed.” There is great merit in such a clear, brief, and plain directive.  But reality is too complex for such a simple directive.  It leaves unanswered several critical questions that will invariably arise.

The prudent local government will anticipate these common situations, deliberate the policy to be applied to them, and explicitly provide the answers in the ordinance itself.  As time goes by, that extra work will make implementation of the ordinance simpler and fairer for all concerned, and will not force the courts to divine unstated intentions about the scope of limits on expanding nonconformities.

Rick Grimes is a sheriff’s deputy residing in a crossroads community out in the county.  For a number of years he has supplemented his income with a small business repairing RVs.  He usually has three or four old RVs parked in his back yard where he fixes them on nights and weekends.  A few years ago the county extended zoning to Rick’s community.  His home was placed in a single-family residential zoning district that does not allow commercial uses such as his RV repair operation.  But the county zoning staff told him when zoning was adopted that he could continue his backyard business since he had all required permits and was in operation prior to adoption of the ordinance.

About eight months ago Rick was seriously injured in the line of duty.  He spent two months in the hospital.  After an additional few months of rehab he was able to return to work.  Given his lack of stamina, however, he put his moonlighting RV repair work aside. 

Rick is now feeling much better and recently decided to restart his RV repair business.  He mentioned this in passing to the county planner in the courthouse parking lot yesterday as they were leaving work.  She told Rick there might be space to open his business in an abandoned state prison the county had recently acquired and was converting to a small business incubator and start-up industrial park. 

Rick, his meager savings already depleted by his hospitalization and recovery expenses, thanked her for the tip, but quickly said he preferred to pick up the work in his backyard.  She reminded him that while his neighbors had been very supportive during his recovery, there had been complaints before he got hurt about all the “junk” piled up in his yard.  Some of the neighbors might well not welcome the reappearance of a half-dozen broken-down RVs in his backyard.  She told Rick that re-starting the work at his home might not be allowed under the county zoning. 

Could it possibly be true that Rick cannot resume his backyard business? Well, it depends.

Nonconformities

The first question is whether Rick’s business qualifies as a lawful “nonconformity” under the county zoning.  Nonconformities are those land uses, structures, or lots that were legal when established but that do not conform to the requirements of subsequently adopted regulations.

How an ordinance deals with nonconformities poses an important policy choice for local governments.  The ordinance has to balance several legitimate interests.  One interest is that of the landowner who did nothing wrong in creating what is now a nonconformity.  There is the interest of the neighbors in receiving the benefits of the protections offered by the ordinance’s current restrictions.  Another interest is that of the community in having everyone abide by the same rules.  Those crafting the ordinance should give careful thought as to how these interests should be balanced.  The benefits to the neighbors and community from uniform compliance with current regulations have to be considered in conjunction with the burden on the owner of the nonconformity.

While not required by state statute in North Carolina, virtually all zoning ordinances allow for the continuance of nonconformities.  In this instance, the county ordinance does allow for continuation of nonconformities.  Since Rick’s repair business pre-dates the application of county zoning restrictions to his property it was at the time of his injury a lawful nonconformity. 

Virtually all ordinances, however, strictly limit nonconformities.  An earlier blog post explored how these limits apply to proposed repair or replacement of a nonconformity.  Rick’s situation raises a second common limit on nonconformities.  Zoning ordinances typically provide that nonconforming use status is lost if that use is inactive for a specified period, often six months or a year.  After that, whatever use is resumed must comply with the zoning ordinance in effect at the time of resumption.  The courts have upheld such limits on nonconformities, noting there is a legitimate governmental interest in eventually phasing out nonconformities.  Williams v. Town of Spencer, 129 N.C. App. 828, 500 S.E.2d 473 (1998).

Limits Based on Inactivity

Assume the county ordinance provides that nonconforming use status is lost if there is a six month period of inactivity.  Did Rick’s RV repair business lose its lawful nonconforming status because it has been closed for the last eight months? 

Whether this limit applies to Rick depends on the precise wording of the county ordinance.  Different results may obtain depending upon whether the term used is abandonment, cessation of use, or discontinuance.  Unless more specific definitions are provided in the ordinance, the courts have interpreted abandonment to mean that the use has stopped and that there is no intent to restart it in the future and discontinuance to simply mean that the use is not active, regardless of any intent to resume.  The cases also explore just what is a cessation of use.  This can involve an examination of situations where the work stops for repairs, securing new tenants, or there is inactivity but an ability to restart it on short notice is retained.  Of course in all of the cases the courts are examining a specific ordinance and attempting to discern the underlying intent of the board that adopted it, as well as applying it to a particular set of facts.

The choice of which term to use is to some degree based on how the local government chooses to strike the balance noted above.  Using “abandon” is most protective of the interests of the owner as it provides the nonconforming protection is not lost unless the owner intends to give it up.  By contrast, using “discontinued” may speed removal of incompatible uses that harm the neighbors and community.

Abandonment

In many respects use of the term “abandonment” is the easiest of these terms to apply.  When an ordinance uses the term “abandonment,” this introduces an element of intent on the part of the owner. In Forsyth County v. Shelton, 74 N.C. App. 674, 329 S.E.2d 730, review denied, 314 N.C. 328, 333 S.E.2d 484 (1985), the ordinance provided that nonconforming status was lost if the use was abandoned, abandonment being defined as “the voluntary discontinuance of a use, when accompanied by an intent not to reestablish such use.”  The case involved a nonconforming commercial recreation facility in a residential zoning district.  After the owner became ill, there was an extended period during which the facility was not open to the public. For a time the property was leased to others who ran the facility.  It was then used for several years only by family and friends of the owner.  The defendant contended that there had been no abandonment of the use, citing several grounds—among them, the physical facilities had remained in place even if they were not actually in commercial use, illness had made the cessation of use involuntary, some recreational use had always been made of the property, and there had always been an intent to reopen.  The court however found sufficient evidence to conclude that there was an intent to forgo use of the property as a commercial recreation business, thus losing its nonconforming status.

So in our case, if the county ordinance says nonconforming use status is lost if the use is abandoned, Rick would have a good case for being allowed to resume operations in his backyard.  He would need to meet with the planner and show her evidence that he was out of operation due to his injuries, but that he had no intent to permanently close his business.  This could include indicators such as retention of his tools, keeping the repair materials he had on hand, and the like.

Discontinuance or Cessation of Use

If on the other hand the county ordinance uses ‘discontinued” or “cessation of use” rather than “abandonment,” Rick may have a problem if he really wants to resume work in his backyard rather than relocating.

A typical case upholding a limit on resumption of a discontinued nonconformity is Dockside Discotheque, Inc. v. Board of Adjustment, 115 N.C. App. 303, 444 S.E.2d 451, review denied, 338 N.C. 309, 451 S.E.2d 635 (1994).  Under the town’s zoning ordinance, nonconforming status was lost if the nonconforming activity was discontinued for a consecutive period of 180 days or was discontinued for any period of time without a present intention of resuming that activity.  The landowner had offered topless dancing on the site on an occasional basis from 1983 through 1989, the frequency ranging from once a week at times to once every two to three months.  In 1990 the zoning ordinance was amended to remove adult entertainment from the zoning district involved.  The court held that because adult entertainment had not been offered on site for a period of eleven months at the time the restriction was enacted, no valid nonconforming use was present.  Likewise, in CG & T Corp. v. Board of Adjustment of Wilmington, 105 N.C. App. 32, 411 S.E.2d 655 (1992), a case involving an inactive oil refinery where oil storage continued while the refinery was inactive, the court ruled that as defined in the ordinance, the term “discontinue” was not synonymous with the term “abandon” because intent was not a factor to be considered in the discontinuance of a use. The court upheld a determination that the facility’s use as an oil refinery had been discontinued, whereas its use as an oil storage terminal had been maintained.

In Rick’s case, RV repair work was discontinued in the backyard for eight months.  His intentions to resume do not matter, as this is just a factual question of whether or not any of the repair work continued at his home during the time in question.  So if the ordinance used this terminology, it is probably time for Rick to take a close look at the old prison site or some other appropriately zoned location for his business.

The issue gets a bit more complicated if the term used in the county ordinance is “cessation of use.”  Flowerree v. City of Concord, 93 N.C. App. 483, 378 S.E.2d 188 (1989), illustrates the complexities this creates.  The plaintiff owned a nonconforming duplex in a single-family zoning district.  After tenants moved out and the units could not be leased, the owner took them off the market and renovated both units.  Since the units were vacant for more than the time period allowed in the ordinance, the city contended there has been a cessation of use as a duplex.  The court however held that occupancy alone could not be used to determine the use.  As long as the owner was making an attempt to use the property as a duplex (as evidenced by advertisements and renovations), there was no cessation of use as a matter of law.  In Diggs v. City of Wilson, 25 N.C. App. 464, 213 S.E.2d 443 (1975), the court similarly held a restaurant closed for renovations over a thirteen-month period had not been discontinued.  Rick could also point to Southern Equipment Co. v. Winstead, 80 N.C. App., 342 S.E.2d 524 (1986), a case involving a nonconforming concrete-mixing facility.  Because of a business slump the plant was out of operation for more than six months, but it was maintained throughout the period and could have resumed operation very quickly if any business materialized.  The court held that even though no work was done on site, the use had not ceased.  But here Rick had not stopped for renovations or repair.  While he was incapacitated to a degree he could not have resumed RV repair work at any point during the six months limit for cessation of use.  So it is not clear these cases will help his cause. 

Conclusion

Whether Rick can resume this work at his home or must relocate his business depends on the exact wording of the ordinance and the details of his situation.  In our case it is clear that Rick’s RV repair business was not abandoned as he had no intent to permanently close it.  But the use may well have been discontinued or even ceased to be used.  So before he resumes his business, he needs to carefully review the exact language in the ordinance and go by the planner’s office for a detailed review of his circumstances. 

If he is fortunate, the ordinance will clearly spell out the intent of the local government on just what type of inactivity will result in loss of nonconforming use status.  For example, does the inactivity require an intent not to resume?  What about inactivity due to illness, bankruptcy or other financial difficulty?  It is helpful if the intent of the limit is spelled out in the ordinance rather than leaving this to guess-work by the zoning administrator, the land owner, and the courts.  While the courts can sort this out, there is no substitute for clarity in the ordinance itself.

Cell tower construction is a hot zoning topic.  The proliferation of smart phones and tablet devices is substantially increasing the demand for wireless data transmission.  Everyone wants good cell phone reception and high quality access for their mobile devices.  But no one wants to look at a cell tower out their back door.  This demand for more and higher quality wireless coverage, combined with widespread concern about the aesthetic impact of telecommunication towers, has sparked a considerable amount of legislation and litigation, not to mention many heated zoning hearings.

The latest wrinkle in reconciling these competing public interests is a little-noticed provision tucked into 2012 federal legislation extending payroll tax cuts and unemployment benefits.  This law, along with recently released FCC guidance, affects an issue that increasingly arises with cell towers.  Suppose there is an existing, permitted cell tower that was built to the maximum height and size allowed by local zoning regulations.  The tower owner now has an opportunity to lease space to a provider who wants to collocate a new antennae array on this tower, but there is not enough space on the tower for an additional antennae array. 

If the tower owner applies for a permit modification to add height and new antennae to the tower, this new legislation dictates whether the local government has to approve it.  Can the tower owner top off the tower?  Under the new law, in many instances the answer is yes, the local government will have to approve the modification.

Previous Federal Provisions

Federal law preemption of local zoning of telecommunication towers is not a new issue.  There is a strong national interest in having an effective wireless network.  Although some advocates recommended regulation of tower location and construction exclusively by the federal government, congress recognized that the means of providing wireless service could have significant impact on important community interests.  So a compromise was reached that allowed some local land use regulation of telecommunication towers, but with restrictions to protect national interests. 

The Telecommunications Act of 1996 allows local regulation of the location of personal wireless services but provides for limited preemption of local ordinances in specified situations. 47 U.S.C. § 332(c)(7)(B) (2010).  This law limits local regulation of cell towers as follows:

1. Local regulations based on the environmental health effects of radio frequency emissions are prohibited.
2. Local governments are required to act on permit applications for wireless telecommunication facilities within a reasonable time.  The Federal Communications Commission (FCC) subsequently issued an order setting out “presumptively reasonable” times of 90 days to review a collocation application and 150 days to review an application for a new tower. 24 FCC Rcd 13994 (2009).  See this blog post by Rich Ducker regarding this “shot clock” regulation and related state statutes.
3. Denials of applications for wireless telecommunication facilities must be supported by substantial evidence in the hearing record.
4. Local regulations may not unreasonably discriminate among providers of functionally equivalent wireless telecommunication facilities.  Regulations may not set a preference for one type of wireless technology over another, may not favor publicly owned facilities over privately owned ones, or favor an initial provider of services over subsequent competitors.
5. Local regulations may not prohibit or have the effect of prohibiting the provision of personal wireless services.  Prohibition includes not only a general ban on all towers in a jurisdiction, but also policies that will result in all possible sites in a given area being rejected.
6. Denials of applications for wireless telecommunication facilities must be in writing.

Previous State Legislation

In 2007 the General Assembly added state statutory restrictions on local government regulation of cell towers.  G.S. 160A-400.50 to -400.53 and 153A-349.50 to -349.53 allow local land use regulation of wireless telecommunication facilities, but add several limits on this authority:

1. A local land use regulation may not require information on an applicant’s “business decisions,” specifically including information about customer demand or quality of service.  A local government is allowed to consider whether an existing or previously approved structure can reasonably be used to provide service, whether residential, historic, and designated scenic areas can be served from outside those areas, and whether the proposed tower height is necessary to provide the applicant’s designated service.
2. Streamlined processing must be provided for qualified collocation applications.  Decisions on these applications must be made within 45 days of receipt of a completed application.  Decisions on all other applications must be made within a reasonable time consistent with other land use applications.  Collocations entitled to this streamlined process include those that meet a set of specified conditions, including no increase in the height or width of the supporting tower, no increase in ground space for the facility, and any new equipment meeting the weight limits for the structure.  The new federal provisions noted below will supersede some of these limits.
3. Local governments are prohibited from requiring that wireless facilities be located on city- or county-owned towers or facilities.  They are allowed to provide expedited processing for applications for wireless facilities proposed to be located on city- or county-owned property.
4. Local governments are allowed to charge an application fee that includes fees for consultants to assist in review of permit applications.  These fees must be fixed in advance of the application and may not exceed the usual and customary costs of services provided.
5. Local governments may add a condition to zoning approvals for new towers that prevents building permits for the tower being issued until the applicant provides documentation identifying parties intending to locate facilities on the tower.  It also may require that permitted facilities be constructed within a reasonable time, provided that time is not less than twenty-four months.

New Legislation and Guidance

When Congress adopted the Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96) last February, most attention rightfully focused on its provisions extending payroll tax cuts, unemployment benefits, and other provisions addressing economic recovery.  The law also included a number of other special provisions, including a section on wireless telecommunication that addressed spectrum management, facilities on federal lands, and public emergency technology. 

Tucked into these special provisions was Section 6409(a), which broadens the federal preemption of local cell tower regulations.  This new law provides that state or local governments “shall approve” any eligible request to modify an existing wireless tower or base station that does not “substantially change” the tower or base station.  Eligible requests include collocation of new transmission equipment and replacement of existing equipment.

This mandate raises the obvious question of just what constitutes a “substantial change” that must be approved.  On January 25, 2013 the FCC provided notice that it interprets the new law using the same standards for defining a “substantial modification” that were previously set in the context of reviewing collocation agreements and facilities in historic districts.  Nationwide Programmatic Agreement for the Collocation of Wireless Antennas, § I.C, 47 C.F.R. Part 1, App. B. 

The new FCC guidance (not yet proposed as a formal rule) provides that it is not a substantial change if:  (1) the height of the tower is not increased by more than 10%; (2) the addition will not extend more than 20 feet from the tower; (3) it will add no more than one equipment shelter or four equipment cabinets; and (4) it will not involve excavation outside the tower site or existing utility and access easements.  Proposed modifications to existing towers that fall within these guidelines must be approved by local governments. 

The FCC guidance goes on to address several other questions raised by the new legislation.  It interprets the law as applying to both telecommunication towers and to other structures that support or house an antennae and to include emerging technologies such as distributed antenna systems and small cells.  It does not affect collocations on structures other than wireless towers or base stations.  It concludes that a local government may require an application for administrative approval, but that such applications must be approved within 90 days.

So, can a tower owner top off an existing tower that is already at the maximum height allowed by the zoning ordinance in order to install additional antennae? 

Yes, provided the addition does not increase the tower height by more than 10%, protrude more than 20 feet from the tower, and involves only relatively modest ground work within the tower site.  The 2012 federal legislation says eligible modifications must be approved “notwithstanding . . . any other provision of law,” thus overriding any applicable maximum height limit in a local zoning ordinance.  An application can be required to verify that a proposed modification falls within these limits, but a qualifying, complete application must be approved in 90 days or less according to the FCC’s interpretation of the law.  

There may be some exceptions to these limits, but the law and guidance leave some important questions unaddressed.  Presumably applicants will need to document that they have legal authority to use or modify the tower from the tower owner before they can seek mandatory approval.  Presumably a proposed tower modification that adds less than 10% to the height of a tower could be denied if the additional equipment would violate weight limits for the tower, fall zone buffer setbacks, or other safety requirements.  But the law is not entirely clear about this and these presumptions may not be valid.

Local zoning ordinances should be updated to reflect the preempted modifications as permitted uses, not subject to special or conditional use permit reviews or variance procedures.  Standards for new towers may also need to be reviewed in light of the possibility of future modification requests that must now be approved.  A potential for a future 10% increase in height or an additional 20 feet protrusion can be particularly significant where “stealth” design is involved, so this may well need to be factored into standards for review of proposals for new towers.

 Can the city allow repairs but prohibit replacement of this sign?

 Yes.

 The first question is whether a new sign would be consistent with the city’s current sign regulations.  In this case the answer is no.  If there were no billboard already on the site, Hershel could not be issued a permit to erect one there.

 But Hershel’s sign was lawfully put up before the sign regulation was adopted.  In zoning terms this makes his sign a “nonconforming” sign.  Nonconformities are those land uses, structures, or lots that were legal when established but that do not conform to the requirements of subsequently adopted regulations. While not required by state statute in North Carolina, virtually all zoning ordinances allow for the continuance of nonconformities.  It is also very common for ordinances to strictly limit these nonconformities.

 The concept of limiting improvements of nonconformities has a long heritage in North Carolina law.  Early development regulations allowed nonconformities to remain but included restrictions designed to phase out the nonconformities through obsolescence.  For example, in 1913 the court upheld a Lincolnton ordinance prohibiting the installation of metal roofs on wooden buildings in the fire district. The court acknowledged that a metal roof would provide greater protection from fire but also noted that it would prolong the life of a nonconforming wooden building and thus could be prohibited.  State v. Lawing, 164 N.C. 492, 80 S.E. 69 (1913). 

 In Elizabeth City v. Aydlett, 201 N.C. 602, 161 S.E. 78 (1931), the landmark case upholding zoning in North Carolina, the court recognized the necessity of allowing the continuance of nonconforming uses if zoning was to work legally, politically, and practically.  The court noted, “Unless the theory of nonconforming uses is practically applied it will be well-nigh impossible to zone the cities and towns of the State.”  The court emphasized that zoning involves a balancing of the future needs of the public against the rights of the individual with a prior nonconforming use.

 The vast majority of zoning ordinances now substantially restrict nonconformities to encourage eventual compliance with the ordinance.  Typical restrictions are those prohibiting (1) the expansion or enlargement of nonconformities; (2) the repair or replacement of a nonconforming structure; (3) a change in a nonconforming use; and (4) the resumption of a nonconforming use if it is abandoned or discontinued for a specified period.  Some ordinances also require certain nonconformities to come into compliance after a specified grace period.  The courts have consistently upheld these limitations, provided they are stated clearly.  If there is any doubt about the application of a particular restriction, that doubt is resolved in favor of the landowner.

 A typical limitation, and the one confronting Hershel, is a provision that allows “repairs” but prohibits “replacement.”  The basis for this distinction is discussed in Appalachian Poster Advertising Co. v. Zoning Board of Adjustment, 52 N.C. App. 266, 278 S.E.2d 321 (1981).  In this case the sign owner replaced two adjacent nonconforming billboards with a single new billboard that was placed where the two smaller signs had previously been located.  The court noted that nonconforming uses are not favored by the law and that

 [h]ere a new structure was substituted for an old one. If it is proper to do this once it will be proper to do it again and thus the life of the nonconforming structure will be indefinitely prolonged, and the whole purpose of the zoning ordinance will be defeated . . . [T]he right to make repairs has generally been limited to such as are merely routine or ordinary and which would not result in the extension of the normal life of the structure, and the replacement of a structure which has become unusable from natural deterioration has been held not permissible.

 A key question then becomes defining the threshold between permissible repairs and impermissible replacement. In Whiteco Outdoor Advertising v. Johnston County Board of Adjustment, 132 N.C. App. 465, 513 S.E.2d 70 (1999), the issue was the application a limitation prohibiting repairs to nonconformities that exceed 50 percent of their value (without specifying in this section of the ordinance whether the “value” referred to original or present value).  The court affirmed the staff’s denial of approval for replacement based on a determination that the cost of repairs would exceed 50 percent of the original cost of erecting the signs.  In Appalachian Outdoor Advertising, Inc. v. Town of Boone Board of Adjustment, 128 N.C. App. 137, 493 S.E.2d 789 (1997), review denied, 347 N.C. 572, 498 S.E.2d 375 (1998), however, the court held approval of the proposed sign improvements was improperly denied.  The sign company proposed to substantially repair and modernize two signs that had been severely damaged in a winter storm. The town prohibited the work as “reconstruction” of a nonconforming sign.  On appeal, however, the court ruled that since the billboard had been damaged but not destroyed, the proposed work was repair rather than reconstruction.  As the ordinance allowed repair up to 50 percent of the market value of a structure, the court ruled the work permissible.

 So what does all of this mean for Herschel?  It means he can fix up and retain his old sign.  But since the sign is inconsistent with current regulations, he is limited to making only the amount of repairs allowed by the ordinance and he cannot replace the sign with a new one. 

 There are also important implications for cities and counties that apply this type of limitation.  The government needs to think carefully about how it want to balance the interests of landowners who must comply with the current regulations with the rights of those who put up signs some time ago in a completely lawful fashion.  It must consider the impacts of the nonconformity on the interests protected by the current regulation.  The government also needs to give particular attention to the details of implementation of these policy choices, particularly in defining exactly where the boundary is between repair and replacement.  The ordinance needs to provide clear guidance to the staff and landowners as to how that is calculated. For example, if repairs are limited to those costing no more than 50 percent of the value of the nonconforming structure, is that 50 percent of the original construction cost, the replacement cost, the current market value, the tax assessed value, or something else?  The ordinance needs to say so that Herschel, his neighbors, the zoning officer, and the public can know just what repairs are legal and when those repairs edge into impermissible replacement.

The board of adjustment is hearing a hotly contested appeal.  The zoning administrator interpreted a somewhat ambiguous provision in the zoning ordinance to allow a controversial land use.  Irate neighbors appealed that determination to the board of adjustment.  The case quickly turned into one of the hottest land use disputes in recent town’s history, garnering multiple front page stories in the local paper and a spot on the local TV news.

The board held two lengthy hearings to gather facts about the issue.  They received substantial amounts of conflicting evidence, some from expert witnesses and much from concerned neighbors.  Some of the board members are uncertain how to resolve questions about the facts and how to weigh the conflicting testimony.  They’re not really sure whether they can even consider the opinions of the neighbors in making their decision.  Attorneys for the land owner and the neighbors presented detailed legal arguments that have left some of the board members more than a little confused. 

After all of the evidence had been received, the board began to discuss the case.  The board’s confusion and uncertainty about how to resolve the case was quickly apparent to the board chair.  She knew this was an important case with significant impact for the owner, the neighbors, and the town.  She also knew there was a good chance the board’s decision would be appealed to the courts.  She realized it would be difficult to have a frank discussion among the members with a large crowd of neighbors, the applicant, and the press looking on.  There were also a couple of questions about the law she had for the board’s attorney and was concerned he might not be able to answer candidly in open session.  It occurs to her that they might best resolve all of these issues in closed session. At the next break in the board’s discussion, she says, “Now that we have concluded receipt of all evidence in this matter, I would like to move into closed session for board deliberation and to receive counsel from our attorney about the legal issues involved.”  One of the board members responds, “Great idea.  I would like to second that motion, but I’d first like to find out from our attorney whether this is permissible.” 

Would it be legal for the board to move into a closed session to conduct its deliberations? What about to talk with their lawyer?

The answers are no, to the first question, and yes to the second..

When a city or county board is making a decision on an appeal, a variance request, or a special or conditional use permit application, it is in many respects acting in a judicial capacity.  That is why these types of decisions are classified as “quasi-judicial.”  In the judicial system juries hear testimony about the facts and then retire to the jury room for private deliberations.  City and county boards making quasi-judicial decisions would sometimes like to apply that analogy and be able to deliberate cases in private after receipt of the evidence.

The state’s open meetings law does not allow such a closed session.  Public bodies – including boards of adjustment and planning boards, as well as city councils and county boards of commissioners – must conduct all of their business in open session unless the law specifically authorizes a closed session.

G.S. 143-318.11 sets out nine specific purposes for which a public body may meet in closed session.  Most of these include narrowly drawn provisions regarding personnel matters and contract negotiations.  There is simply no authorization for a closed discussion by a local government board deliberating a pending quasi-judicial decision, no matter how contentious or complicated the case might be.  G.S. 143-318.18(7) exempts state agencies making quasi-judicial decisions from the open meetings act for those meetings held solely for the purpose of making a decision in an adjudicatory proceeding.  But that exception does not apply to local government boards.

What about getting legal advice from the board’s attorney?  In our example we have a case that may well be headed for court and the board would like to get candid legal advice to avoid making a legal error that would result in having their decision overturned or returned for corrections. 

G.S. 143-318.11(a)(3) allows a closed session to consult with the board’s attorney, but only “in order to preserve the attorney-client privilege.”  A critical question then is the range of discussion protected by this privilege.  The court addressed this attorney-client privilege exception to the open meetings law in Multimedia Publishing of North Carolina, Inc. v. Henderson County, 136 N.C. App. 567, 525 S.E.2d 786, review denied, 351 N.C. 474, 543 S.E.2d 492 (2000).  The county board had gone into closed session with their attorney to discuss a proposed moratorium on new racetracks while new noise regulations were being developed and considered.  The court noted that while board’s attorney must be present for there to be a privileged conversation, the attorney’s presence in and of itself does not justify a closed session.  Only the provision of protected legal advice justifies a closed session, not a general policy discussion with the attorney.  The court held that a pending or threatened claim or suit against the board was not necessary to invoke the attorney-client privilege so long as legal advice was being discussed.  The court ruled the burden is on the board to provide some “objective indicia” that the exemption is applicable.  When this case was again before the court after a remand, the court held that it was permissible for the board to consult with their attorney in closed session regarding the statutory authority for the ordinance, the legally permissible length of a moratorium, and the wording of the terms of the moratorium (as distinct from any general discussion about the propriety of a moratorium).  Multimedia Publishing of North Carolina, Inc. v. Henderson County, 145 N.C. App. 365, 550 S.E.2d 846 (2001).  The court affirmed this analysis in a case involving enforcement of Charlotte’s minimum housing code, Carolina Holdings, Inc. v. Housing Appeals Board, 149 N.C. App. 579, 561 S.E.2d 541, review denied, 356 N.C. 298, 570 S.E.2d 499 (2002).  In this case the board held a series of six hearings on the appeal of an order to demolish parts of a dilapidated apartment complex.  The court held it was permissible for the board to meet with its attorney in closed session at several of the hearings in order to discuss matters within the attorney-client privilege. Board consultation with their attorney in private on constitutional and legal challenges that might result from particular enforcement actions being considered was held to be permissible.  David Lawrence has a more detailed discussion of closed sessions under the attorney-client exemption in this 2002 bulletin.

So in our example, the board cannot go into closed session to deliberate or to discuss the case among themselves.  Prior to adoption of the open meeting law, it was common for some boards to conduct their deliberations in private, returning to open session to vote and announce their conclusions.  That is simply no longer legally permissible in North Carolina.  No matter how messy or complicated, the public has a legal right to hear the board’s discussion and deliberation.

On the other hand, the board can go into closed session for the narrow purpose of a privileged legal discussion with their attorney.  To do so, the board must specify the purpose of such private consultation and adopt a motion to go into closed session while in open session.  The minutes of the closed session must provide a general account of the meeting (discussed in Frayda Bluestein’s blog posts here and here). It is very important that the discussion in the closed portion of the meeting be limited to only privileged legal consultation.  This is a limited exception to the open meetings law and cannot be used to shield board deliberations or general policy discussion from public scrutiny.

One other statutory provision can come into play in extraordinary circumstances.  In addition to these provisions on application of development regulations in an established ETJ, there is a statutory provision dating back to 1917 that authorizes cities to abate public health and safety nuisances that are within one mile of a city.  G.S. 160A-193.  This would involve the city filing a nuisance abatement suit, however, rather than extending municipal jurisdiction for a municipal general police power ordinance on overgrown or nuisance lots.

Ordinances That Remain a County Responsibility in the ETJ

Counties may apply a county ordinance that is not a development regulation listed above to any part of the county that is not within city limits.  G.S. 153A-122.  Unlike development regulations, these county ordinances can be applied in the municipal extraterritorial area.

These regulations are often referred to as “general police power” ordinances.  They are authorized by Article 6 of Chapter 153A of the General Statutes.  Within this Article there is both a general authorization of ordinances and a number of specific types of ordinances that are explicitly set forth.  The general authorization is G.S. 153A-121, which allows counties to adopt regulations to protect the “health, safety, or welfare of its citizens and the peace and dignity of the county” and to prevent nuisances.  Article 6 also includes authorization for a variety of specific ordinances.  These include regulations on abandoned and junk cars, public health nuisances, flea markets, places of amusement, outdoor advertising, solar collectors, and cisterns.  Also authorized are regulations dealing with explosives, dangerous animals, disposal of trash, garbage and solid wastes, and parking areas.  All of these county general police power regulations may be applied by the county within a municipal ETJ.

Cities have comparable authority for general police power regulations set out in Article 8 of Chapter 160A of the General Statutes.  However, unlike development regulations, city police power regulations can only be applied within the city limits and not within an ETJ area.  The only exceptions to this limit is that these city ordinances can be applied on city-owned property outside the city (G.S. 160A-176) and ordinances regulating swimming, surfing, littering, and personal watercraft operation can be applied by some cities to waterways in their ETJ (G.S. 160A-176.1, -176.2).

In sum, municipalities have exclusive jurisdiction for development regulations both within the city limits and within an established municipal ETJ.  But the city does not have authority to apply its general police power regulations within an ETJ.  The county retains authority for general police power regulations within all unincorporated areas, including ETJ areas, as well as having authority to apply county development regulations to unincorporated areas of the county that are outside of both city limits and established ETJ areas. The table below summarizes this allocation of responsibility.

Ordinances with Dual Sources of Authority

For most types of ordinances, there is a single source of authority and the rules above govern where city and county ordinances apply.  Some ordinances, however, can be adopted either as a general police power ordinance or incorporated within a development regulation, such as a zoning ordinance or a unified development ordinance.  A typical example is a sign regulation, which in some jurisdictions is a separate general police power ordinance while in other jurisdictions it is part of a zoning ordinance.  Another example is a regulation on siting adult businesses.  G.S. 160A-181.1, which authorizes regulation of adult businesses, is a general police power authority, but it explicitly provides that these regulations can also be adopted as part of a zoning ordinance.

Our courts have held that where there are two sources of authority for an ordinance, a city or county may freely elect which to use.  Summey Outdoor Advertising, Inc. v. County of Henderson, 96 N.C. App. 533, 386 S.E.2d 439 (1989), review denied, 326 N.C. 486, 392 S.E.2d 101 (1990).  The source of authority chosen dictates whether the ordinance is applicable in an ETJ.  If it is adopted as part of zoning, the development regulation rules apply, but if it is adopted as a general police power ordinance, those rules apply.  There is one cautionary note, however.  If the type of regulation clearly falls into the development regulation category, those rules will be applied even if the jurisdiction attempts to adopt the regulation as a general police power ordinance.  Sandy Mush Properties, Inc. v. Rutherford County, 164 N.C. App. 162, 595 S.E.2d 233 (2004).  The rationale is that if the statutes set specific procedural requirements (such as notice and hearing requirements) for a particular type of regulation, those procedures are mandatory and cannot be avoided by labeling the ordinance a “general police power” ordinance rather than a “development regulation.”  That rationale carries over to the statutory allocation of geographic jurisdiction for the respective types of ordinances.

A further complicating factor is that there are also city and county ordinances authorized by statutory provisions that are not within either Chapter 160A or 153A.  Examples include stormwater regulations (G.S. 143-214.7(c)), floodplain regulations (G.S. 143-215.54), mountain ridge protection regulations (G.S. 113A-208), and sedimentation and erosion control ordinances (G.S. 113A-60).  Most of these separate authorizations do not specify whether cities or counties have jurisdiction for their application within an ETJ.  However, most of these authorizations are cross-referenced in the Article on development regulations of the city statutes.  So a city has authority to impose stormwater, floodplain, mountain ridge protection, and sedimentation erosion control ordinances in an established ETJ.  G.S. 160A-458 to -459.2.  While the county statutes generally do not have comparable cross-references, it is reasonable to infer that the legislative allocation to the development regulation authority for cities removes county jurisdiction for them in an ETJ as there could otherwise be overlapping ordinances on the same topic.

Issues with dual authority ordinances arise most frequently in the thirty-six counties that do not have countywide zoning.  Where countywide zoning is in place, both the city and county regulations are usually incorporated into a zoning ordinance and the allocation of jurisdiction within the ETJ is clear.  Many of the counties without county wide zoning, however, have adopted general police power ordinances on a variety of topics that are typically incorporated into zoning or unified development ordinances.  Examples include regulations on telecommunication towers, high impact industries, wind and solar energy facilities, adult businesses, manufactured home parks, and signs.  In these instances, city zoning still applies in the ETJ, but so does the county general police power regulation.  In these circumstances, there can be overlapping city and county regulation of the same topic with ETJ areas.

In conclusion, the critical inquiry in determining whether a city or county ordinance is applicable in an ETJ is to discern the source of authority for the ordinance. If it is authorized and adopted as a development regulation, the city has jurisdiction.  If it is authorized and adopted as a general police power ordinance, the county has jurisdiction.  In our instance, the alleged violation would be covered by a nuisance lot ordinance, which is a general police power regulation.  So in this instance the county ordinance is applicable within the city ETJ and the county inspector should proceed with his investigation.

One common dimension of the confusion with zoning ordinances stems from an unfortunate use of very similar terminology to describe very different things.  In North Carolina land use law the leading example, and our topic for this post, is the use of the terms “conditional use permit,” “conditional use district” zones, and “conditional zoning.”  These three things sound alike, but in the world of zoning they are very different.

Just what are these three things?  A conditional use permit is an approval issued upon an applicant establishing that standards set out in the zoning ordinance have been met.  A conditional use district rezoning involves two decisions – a rezoning to a district that has only conditional uses (and no permitted uses) plus concurrent consideration of a conditional use permit.  A conditional zoning attaches individual, site-specific conditions to the rezoning and does not involve a separate conditional use permit.  While the chart below summarizes these differences, it is easy to see why confusion arises.

So let’s look at each of these in a little more detail.

Conditional Use Permits

The first of these terms to enter the zoning lexicon was the “conditional use permit.”  In the zoning ordinances of eighty years ago, a specific land use was either permitted in a particular zoning district or it was prohibited in that district.  For example, a single family home was permitted (sometimes referred to as a “use by right”) in a residential zoning district, while commercial and industrial land uses were prohibited in that zoning district.  If you asked if a specific land use was permitted to be located on a specific parcel, the answer was yes or no, depending on whether or not it was a permitted use there.  Simple rules for a simpler time.  

But about fifty years ago many local governments decided they needed more nuanced land use rules – that we needed to add “maybe” to the options of “yes” or “no.”  The idea was to add some flexibility to zoning ordinances while retaining oversight of individual projects.  For example, a city might want to allow a small multi-family building to be located in some portions of a residential zoning district.  This use would not be suitable for every location in the district, but with a case-by-case review it could be allowed in some locations within the district.  

The “conditional use permit” was zoning’s answer as to how to accomplish this.  Rather than making small multi-family buildings a permitted use in the zoning district, the zoning ordinance would allow it only where it could be established that specified conditions would be met, hence the name “conditional use permit.”  Over 90% of the zoning ordinances in North Carolina now include provisions for some conditional use permits.  And to add one more layer of confusion, the law allows individual “conditions” to be added to any quasi-judicial approval – not just for conditional use permits — including zoning variances and certificates of appropriateness under historic district regulations.

In addition to the concept itself, two factors related to this innovation immediately added complexity and confusion to the zoning world.  

First, the conditions specified in the ordinance that determine whether or not the use would be permitted usually included discretionary standards.  For example, the zoning ordinance could condition whether a use would be allowed on a particular parcel upon a determination that it would be harmonious with the surrounding neighborhood and that it would not have a significant adverse impact on neighboring property values.  Our courts soon ruled that since a person has a legal right to their permit upon establishing that the conditions have been met and since facts have to be ascertained to determine if the standards involving judgment and discretion have been met, the board making these decisions must follow quasi-judicial procedures.  This means a number of complex limitations on the decision-making process are required – testimony by witnesses under oath and subject to cross-examination, having substantial evidence in the record to support factual findings, limits on opinion testimony and gathering evidence outside the hearing, mandates for impartiality by decision-makers, requirements for a written decision that adequately explains how the decision was reached, and so forth.  These requirements and how they are followed are described in more detail in this report.

Second, the terminology used for this “maybe” of the zoning world has from the outset been confusing.  Many ordinances use the term “conditional use permit” to describe this type of approval.  Others use the term “special use permit.”  Still others call them “special exceptions.”  Even more mystifying, some ordinances provide for both “conditional use permits” and “special use permits.”  The key thing to remember is that all three of these terms describe the same thing.  There is no legal difference between the three.  For the most part it is just a matter of local preference which of the three is used in any particular ordinance.  

The rationale for some ordinances having both conditional use permits and special use permits is straightforward.  Under North Carolina law a zoning ordinance can assign final decision-making on these permits to the governing board, the board of adjustment, or the planning board.  Some ordinances assign some of these to one board and others to a different board.  For example, most of the permits may be assigned to the board of adjustment but a few more sensitive ones (such as projects with more than 100,000 sq. ft. of floor space) may be assigned to the governing board.  In those situations, the ordinance may use the term “conditional use permit” for all of those that go to the board of adjustment and “special use permit” for those going to the city council.  This is just a convenience and there remains no legal difference (other than the decision-making board) between the two differently named permits.  But this differing terminology has been a source of confusion for decades.

Conditional Use District Zoning

North Carolina land use law prohibits imposing individual, site-specific conditions on a regular rezoning to a conventional zoning district.  If city or county governing board considers only a particular proposed project rather than the full range of uses that would be allowed in the new zoning district, the courts will invalidate the rezoning if it is challenged in court.  If an owner promises the governing board that the new zoning would be used only for a particular project, that promise is not binding.  Once the property is rezoned, the owner (and anyone the person may sell the property to) can undertake any use permitted in the new zoning district.  In addition, any special conditions imposed on a conventional rezoning—such as requiring a buffer strip of a certain size—are not enforceable.  Only those standards that apply to all property in the zoning district are legally enforceable.  In this situation, the North Carolina courts will generally uphold the rezoning but without the invalid condition.  These limits on zoning are described in more detail in this earlier post.

These limits on the use of conditions with a standard rezoning led in the 1980’s to use of a new zoning tool in this state – the “conditional use district zone” (also called a “special use district zone” by some ordinances).  A conditional use district rezoning is initiated when the owner asks for a rezoning to a new zoning district that does not have any automatically permitted uses, only uses allowed by the issuance of a conditional use permit. In the usual conditional use district rezoning process, the owner applies for a special or conditional use permit for a particular project at the same time the rezoning is requested and the two decisions (the rezoning and the permit) are considered in a single proceeding.  This process is also described in more detail in an earlier post.

Conditional use district zoning is a complicated process. Although the rezoning request and the permit application are processed at the same time, the governing board treats the two proposals as legally independent, separate decisions. All of the detailed conditions and specific restrictions on the project are attached to the conditional use permit (which is legal) rather than to the rezoning itself (which would not be enforceable). The board must make two decisions that have different procedural requirements, but usually the board attempts to make both at the same time and with a single hearing. 

Conditional Zoning

The legal complexity and formality of the procedures required for conditional use district zoning led to an alternative that is increasingly common in North Carolina — “conditional zoning.”  In the last decade both the courts and the legislature have approved use of purely legislative conditional zoning.  This is different from a conditional use district in that there is no accompanying conditional use permit.  All of the site specific standards and conditions (sometimes including a site plan) are incorporated into the zoning district regulations.  Conditional zoning is proving to be very popular with elected officials, landowners, and many neighbors because it allows zoning to be tailored more carefully to a particular situation. In some of the state’s larger cities, 80 to 90 percent of the rezonings use conditional zoning.

State law only allows conditional zoning and conditional use districts at the owner’s request; they cannot be imposed without the owner’s agreement.  Also, the individual conditions and site-specific standards that can be imposed are limited to those needed to bring a project into compliance with city and county ordinances and adopted plans and those addressing the impacts reasonably expected to be generated by use of the site.  Conditional zoning is not exempt from a spot zoning challenge.  If the new district is relatively small—and virtually all of these are—the local government must assure that all of the factors defining reasonable spot zoning are fully considered and that the public hearing record reflects that consideration. 

So, while these three terms sound very similar, they are in fact very different.  Some zoning ordinances use all three terms, so a user must pay careful attention to exactly which term is being used.  But once you have the distinctions down, you are well on the way to becoming a zoning pro.  After all, not just anybody knows the difference between conditional use permits, conditional use district zoning, and conditional zoning.

A range of public services are needed for development — water, sewer, streets, schools, parks, fire, police, emergency medical service, waste collection and so forth.  Sometimes growth occurs where the public facilities to provide those services are in place to accommodate new development.  But it is not unusual for new development to be proposed where existing public facilities are already stretched to capacity or beyond.  In North Carolina this issue is particularly acute in high growth areas such as the small towns and counties surrounding our major urban areas. In these areas high rates of residential growth, combined with modest existing public facilities, quickly lead to significant economic, political, social, and legal controversies regarding the rate of growth and how to finance demands for new public facilities.
These controversies led to the most recent North Carolina Supreme Court pronouncement on land use law – Lanvale Properties, LLC v. County of Cabarrus, ___ N.C. ___, 731 S.E.2d 800 (2012).  The court invalidated the approach the county had taken to provide new school capacity.  The case has important lessons for cities and counties wrestling with issues of growth and public facility capacity. The key issue in this case dealt with financing the costs of adding school capacity, but the same issue must be addressed for the full range of public facilities needed to serve new development.

Providing Capacity for School Needs

One of the key flash points in addressing the impacts and costs of new residential development in North Carolina is school capacity.  Construction of substantial numbers of new homes brings substantial numbers of new school children to a community.  In North Carolina, the state government pays most of the operational expenses for schools (such as teacher salaries) and county governments are responsible for providing and equipping school buildings.  While parents are understandably upset with overcrowded schools, construction of additional schools is an expensive proposition.  Wake County, for example, is currently discussing a series of possible $400 to $600 million bonds for school construction.  And this is after having a $970 million bond issued for school construction in 2006, a $450 million school bond in 2003, and a $500 million school bond in 2000.  When a school system is adding thousands of new students per year, the fiscal impacts for county government is substantial  Wake County had estimated in 2006 that the cost of land, building construction, and equipment for a new elementary school can be over $25 million, $46 million for a middle school, and $79 million for a high school.

While concerned about school overcrowding, many citizens are also very concerned about tax rates.  This presents a difficult balancing act for local government officials – how do we encourage new growth, avoid overcrowded schools, and keep our property tax rates from rising?

In an effort to provide for school construction funds without raising property taxes, several counties turned to use of a school impact fee.  The unit of government calculates school capacity, the additional capacity required to support new development, and the costs of adding that capacity, and then allocates that cost to new development on a pro rata basis.  For example, this calculation may show that each new home in a particular area of the county generates a need for new school capacity that would cost $2,000 per home.  An impact fee would charge  $2,000 per home rather than increasing property taxes to cover the costs of needed school construction.

Authority for School Impact Fee

North Carolina statutes do not specifically authorize school impact fees.  The court of appeals in several cases had held that existing local government authority does not include the authority to impose a school impact fee.  In Durham Land Owners Ass’n v. County of Durham, 177 N.C. App. 629, 630 S.E.2d 200, review denied, 360 N.C. 532, 633 S.E.2d 678 (2006), the county asserted that the statutory grant of authority to fix fees for “performing services or duties required by law” gave the county authority to impose a school impact fee on new residential construction.  The court held that provision of schools, while mandated by the state, is a general governmental obligation rather that a service provided to an individual for which a fee can be charged.  In Union Land Owners Ass’n v. County of Union, 201 N.C. App. 374, 689 S.E.2d 504 (2009), the court held that even where a legitimate regulatory objective is being met, the means used to advance that objective cannot be implied to extend beyond the powers granted.  That case involved an adequate public facilities provision that gave developers the option of paying a voluntary mitigation fee if there was inadequate school capacity.  The court held that while school capacity is a legitimate legislative concern, the tools enumerated within the zoning and subdivision statutes do not include authority to assess what is essentially a school impact fee.  These cases are discussed in earlier blogs on this site here and here.  The court of appeals made similar rulings in a third case involving school impact fees, but on appeal that case was affirmed by an evenly divided court, so it does not have precedential value. Amward Homes, Inc. v. Town of Cary, 206 N.C. App. 38, 698 S.E.2d 404 (2010), aff’d per curiam by evenly divided court, 365 N.C. 305, 716 S.E.2d 849 (2011).

The North Carolina Supreme Court in Lanvale Properties affirmed the line of reasoning from these earlier cases.  The court held the county had no authority under zoning to impose these fees even if they were included within a unified development ordinance, and even if the fees were only one of several options offered to developers to address school capacity inadequacy.

The court ruled that the zoning enabling statutes do not expressly or by implication provide authority for a school impact fee.  The court held the requirement in G.S. 153A-4 for broad construction of powers granted to counties is a rule of statutory construction that guides the courts when there is ambiguity about the scope of powers granted, not an independent grant of authority.  Thus when a statutory grant of authority (or failure to grant a power) is clear and unambiguous, the “broad construction” rule is inapplicable.  The court noted the need for express authorization is particularly important for taxes and fees.  The court held the lack of statutory authority within the zoning enabling statute for a school impact fee was clear.

In addition the court found the local legislation that Cabarrus County had secured was also insufficient to grant authority for a school impact fee.  That local bill allowed the county to enforce any provision of the school adequacy reviews in its subdivision ordinance countywide (including within cities in the county) “including approval of a method to address any inadequacy that may be identified as part of that review.”  S.L. 2004-39.  The court noted that other counties (Orange and Chatham) had secured explicit authority for school impact fees, while that authority had been denied to others (particularly Union County).  The court contrasted the wording of Cabarrus County’s local act with the 1987 explicit grant to Orange and Chatham Counties to “provide by ordinance a system of impact fees to be paid by developers to help defray the costs to the county of constructing certain capital improvements.” S.L. 2004-1987 N.C. Sess. Laws 609.

Implications for Land Use Decisions

For those local governments struggling with how to manage and pay for the costs of development, what lessons are included within the Lanvale Properties opinion?  In addition to the basic conclusion that the general local government statute most certainly does not now authorize use of school impact fees, here are several points the court made.

First, a local government needs clear, unequivocal statutory authorization for any development exaction imposed.  If developers are required to address the impacts of their development by donating land, constructing facilities, or contributing money to defray those costs, the authority to require that must be explicitly granted by the legislature.  The need for public facilities such as schools is important and the issues raised by funding those improvements are complex. The court acknowledged that this puts local governments in a difficult position.  But the court directed those seeking additional tools to finance public facility provision to the General Assembly for relief.

Second, if a local government wants to use an authorized exaction, care must be taken to use it only in the manner authorized.  This point is particularly important when local governments adopt a unified development ordinance.  These are single ordinances that consolidate several different types of local development regulations, such as zoning, subdivision, historic district regulation, sign codes, and the like.  These unified development ordinances are expressly allowed in North Carolina. G.S. 160A-363(d) and 153A-322(d).  While a common set of definitions, procedures, boards, and organizational arrangements can be used for the various portions of a unified development ordinance, that is not the case with exactions.  Some of the exactions allowed in North Carolina are authorized only by the subdivision enabling statute, not the zoning enabling statute.  For example, an exaction authorized only when there is a subdivision of land, such as a requirement for reservation of a school site for future government purchase, can only be triggered when there is actually a subdivision as defined by the statutes.  The fact that a development may require site plan approval or a special use permit under the zoning portion of the unified development ordinance cannot trigger the school reservation requirement in the absence of a subdivision.

Third, where a tax or fee is involved, the fact that a regulatory ordinance characterizes payment as optional does not eliminate the need for specific statutory authorization of the fee.  For a tax or fee option to be included in a development regulation ordinance, specific statutory authority is necessary.  Inclusion of an unauthorized option within a regulation may well invalidate the entire regulation, as was the case in Lanvale Properties,  if the court views the regulation as a “revenue generating mechanism.”

Fourth, the lack of authority to impose an impact fee does not reduce the local government’s authority to consider the adequacy of public facilities in its development regulations.  The zoning statutes expressly allow regulation of land uses and structures to “facilitate the efficient and adequate provision of transportation, water, sewerage, schools, parks, and other public requirements.”  G.S. 160A-383, 153A-341.  Subdivision ordinances may provide for “orderly growth and development.” G.S. 160A-373, 153A-331. So, for example, if an area has limited capacity to deal with increased demand for these public services, the local government can impose zoning regulations to limit development to levels that can be supported by existing facilities.  The government can delay approval under its development regulations until those services are available.  Denial of a rezoning or a special use permit can be based on inadequate school facilities to support a proposed new development, provided the zoning ordinance is appropriately structured.  The effect of the case law is that in those circumstances the local government cannot impose an impact fee or other exaction on developers to address inadequate facilities unless that fee has been expressly authorized by statute.

An interesting question for another day is what options a developer and local government have after a project is denied regulatory approval due to inadequate public facilities.  At that point both parties may want to enter negotiations about how to most efficiently and expeditiously remove the inadequacies.  The form and appropriate and permissible parameters of that type of truly voluntary negotiation are yet to be precisely delineated in this state.

In sum, cities and counties have substantial regulatory authority to limit and manage development where there are inadequate public facilities.  They likewise have several tools available to finance provision of those facilities.  But only the means for financing public facilities that are expressly set out in the statutes may be used to address inadequacies in public facilities.  The authority to regulate does not include the authority to add financing methods unless and until the legislature specifically says it does.

The day before the public hearing on the rezoning the local newspaper has a front page story about the controversy.  The article quotes the landowner on her plans and the leader of the neighborhood opposition about his concerns.  The article then includes the following –

 Things could get interesting when the council holds its public hearing tomorrow night.  Council member Hamilton Berger said he strongly supports the proposed rezoning.  Burger said the jobs that will be provided will greatly benefit the community and the tax revenues from this business will help reduce the tax burden on town residents.  “I’m pumped.  I can’t wait to help cut the ribbon at the store opening,” Burger said. But Council member Della Street also expressed strong opinions about the rezoning.  “I got elected to prevent exactly this type travesty,” she said. “Hamilton and his fast talking buddies may throw a lot of figures around, but I know in my heart just how bad this would be for the neighborhood.  I don’t care what they say tomorrow at the hearing, I can tell you right now I’m going to do everything I can to stop this terrible project.

We have two council members with strongly held opinions about a pending land use decision.  Both have proudly and unequivocally announced prior to the public hearing just how they intend to vote.  Does this pose a legal problem?  If they have indeed already made up their minds prior to the hearing, can they still vote on the rezoning?

Yes they can.

It is not unusual for members of city councils and county boards of commissioners to have a personal interest in the outcome of a zoning decision.  It is common for developers, real estate agents, neighborhood activists, and others strongly interested in development to be represented on local government boards.  Given the strong impact development regulations have on their interests, it is hardly surprising that those most directly affected by the decisions actively seek out board membership. These members bring expertise and well-informed perspectives to the crafting and implementation of development regulations. But the participation in decision-making by persons who may be personally affected by the decisions presents the need for safeguards to assure that these decisions are made in the public interest.  The law on conflicts of interest defines when it is permissible for an official to take those personal interests into account in a zoning decision and when those personal interests mandate that the official not participate.

Conflict of Interest Standards

The resolution of conflict of interest issues when it comes to zoning decisions depends on two factors – what type of zoning decision is involved and what type of personal interest is involved.  First, the rules vary depending on whether the decision is characterized as legislative (such as a rezoning or text amendment) or quasi-judicial (such as a special or conditional use permit).  Second, the rules also vary depending on the type of personal interest involved.  Our topic for today is bias, but there are differing rules for other types of personal interest, such as financial conflicts of interest, personal relationships with affected persons, and the like.

The North Carolina Supreme Court has summarized the general rule on conflicts of interest for boards making land use regulatory decisions, first setting out the standard for legislative decisions and then for quasi-judicial decisions:

 ”With legislative zoning decisions, an elected official with a direct and substantial financial interest in a zoning decision may not participate in making that decision. Where there is a specific, substantial, and readily identifiable financial impact on a member, nonparticipation is required. Additional considerations beyond these financial interests require nonparticipation in quasi-judicial zoning decisions. A fixed opinion that is not susceptible to change may well constitute impermissible bias, as will undisclosed ex parte communication or a close familial or business relationship with an applicant.”

County of Lancaster v. Mecklenburg County, 334 N.C. 496, 511, 434 S.E.2d 604, 614 (1993).  It is important to note that the prohibition against bias is included for quasi-judicial decisions, but not for legislative decisions.  This is because the parties have a due process right to an impartial decision-maker with quasi-judicial decisions, but not with legislative ones.

The same rules on conflicts of interest in land use decision-making are also now in the statutes.  In 2005 the zoning statutes were amended to address conflicts of interest in both legislative and quasi-judicial settings, codifying the rules set out in the County of Lancaster case.

G.S. 160A-381(d) and 153A-340(g) provide that members of city councils and county boards of commissioners “shall not vote on any zoning map or text amendment where the outcome of the matter being considered is reasonably likely to have a direct, substantial, and readily identifiable financial impact on the member.”  These statutes apply the same standard to appointed boards making recommendations on legislative decisions (such as a planning board comment on a proposed rezoning).  For a more detailed review of the statutes dealing with board member voting and financial conflicts of interest, see this blog post from my colleague Frayda Bluestein.

G.S. 160A-388(e1) and 153A-345(e1) provide that members of boards making quasi-judicial land use decisions “shall not participate in or vote on any quasi-judicial matter in a manner that would violate affected persons’ constitutional rights to an impartial decision-maker. Impermissible conflicts include, but are not limited to, a member having a fixed opinion prior to hearing the matter that is not susceptible to change, undisclosed ex parte communications, a close familial, business, or other associational relationship with an affected party, or a financial interest in the outcome of the matter.”  It is important to note that, as was the case with the court decision, the statutory standard for quasi-judicial zoning decisions explicitly references the constitutional due process right for impartiality.

Bias and Legislative Decisions

The decision involved in the problem posed at the outset is a legislative zoning decision – rezoning a parcel from residential to commercial use. The type of conflict is a lack of impartiality. We do not have any financial conflicts of interest, but we do have two council members with a bias.

Decisions on rezonings require policy judgment by elected officials.  These officials’ personal knowledge, positions on issues of importance to the community, and judgment about the preferred course for the community are important and valid components of the decision-making process.  Expression of opinions, bias, and contacts with citizens about a matter before a rezoning hearing do not disqualify a member from voting on a legislative decision.  Brown v. Town of Davidson, 113 N.C. App. 553, 556, 439 S.E.2d 206, 208 (1994).

While there is no requirement for impartiality on issues of public policy choices, there are constitutional protections from bias based on race, ethnicity, or religion.  It would be impermissible, for example, to deny a rezoning for a place of worship based on which particular religion would be practiced there.  Also, a person can establish a constitutional violation in those rare instances where it is established that the decision was based solely on personal animosity towards the applicant rather than any plausible public policy rationale.

With our rezoning issue, it is legally permissible for both council members to freely debate and vote on the matter even though they have announced how they intend to vote prior to the rezoning hearing.  If a person is concerned with policy bias and the judgment being exercised by these elected officials, the appropriate remedy is the ballot box, not a law suit.

Bias and Quasi-Judicial Decisions

By contrast, we would have an entirely different conclusion had the council been hearing a special or conditional use permit application instead of a rezoning.  Bias by a decision-maker is a serious issue with quasi-judicial zoning decisions.

When a board decides a special and conditional use permit application, those directly affected by the decision have a constitutionally protected right to an impartial decision-maker.  Board members must fairly apply the standards in the ordinance to the facts presented, whether or not they agree with those standards.  A board member whose opinion about the case is fixed and not susceptible to change has an impermissible bias and must not vote on the matter.  Further, a member with a bias must not even participate in hearing or the deliberation of the case.  This rule applies to any board making a quasi-judicial decision, be it a city council, board of county commissioners, planning board, or board of adjustment.

Determining when a person has an impermissible bias in these cases can be difficult.  If, as with our rezoning example, a council member boldly announces their intended vote on a special use permit application prior to hearing the evidence, they clearly have a fixed opinion and must not participate in the case.  On the other hand, simply knowing some of the parties or expressing an opinion about the general policies involved with a case is generally not impermissible bias if the member can fairly state they will make a decision based on the evidence presented and the standards in the ordinance.  But exactly where the line is between impermissible bias and permissible general opinions that do not affect a vote is not always entirely clear.  The statute on judicial review of quasi-judicial zoning decisions recognizes the complications in determining whether bias exists, as G.S. 160A-393(j) allows the hearing record on review to be supplemented with affidavits, testimony, or documents to determine if members of the decision-making board were sufficiently impartial.

So, was it a good idea for our two city council members to announce how they intended to vote on a rezoning prior to the public hearing?  That is a question of judgment the courts leave to the council members and ultimately to the voting public.  But it is clear that lack of impartiality in a legislative matter is not a legal problem.  Unless the outcome of the rezoning vote will have a substantial financial impact on Mr. Burger or Ms. Street, they are not required to approach the rezoning hearing with an open and impartial mind.  They are free to bring their public policy preferences to the hearing and, if they wish, to fully disclose their voting intentions in advance. But they need to be careful not to do the same next time they hear a special use permit application.

Consider these situations –

1.  The planning board has recommended a set of zoning amendments to promote more housing options and affordability. One proposal is an amendment to allow accessory apartments as a permitted use in all single-family zoning districts, provided some conditions are met regarding parking and setbacks. After hearing concerns raised at the public hearing, Mayor Juanita Beasley observes that this proposal could be a good thing in many instances.  Given the increase in density it would allow in older neighborhoods where the houses are already pretty close together, she notes appropriate on-site management may well be needed to assure this works out to everyone’s benefit. She asks staff if the proposed text could be amended to allow accessory apartments only if either the principal house or the accessory apartment is owner-occupied.

2.  Rafe Hollister and Charlene Darling have proposed opening a brew pub/nightclub in a neighborhood shopping center.  Darling will own the building and manage the club while Hollister will own and manage the brewing operation.  A club at this location requires a special use permit under the town zoning ordinance.  Near the close of the town council hearing on the application, Councilor Floyd Lawson raises a question. “It’s clear from the testimony we’ve heard that this business will be a great thing for our small town.  I’ve known Charlene and her brothers all my life.  I’m sure she’ll run this business in a way that will be absolutely first rate.  Everybody around here is already familiar with Rafe’s special home brews and they’d go great with some local music.  But Charlene, like me, is getting on in years. In the wrong hands this club could turn into a real problem.  We have joints in town that are just a mess – fights, noise, drugs, all sort of bad things.  Charlene’s retired and will really look after this business, but without her around, this club could be a real nuisance.  Can we add a condition to the permit that live entertainment can be offered only as long as Ms. Darling is the owner or that they’d have to come back and get a permit amendment if she sells the club to someone else?”

Is it legally permissible for the town do either of these things?

In a word, the answer to both is no.

In North Carolina the courts have long held that development regulations may not be used to control the ownership—as opposed to the use—of property.  A leading case on this point arose three decades ago in Chapel Hill. The council amended the zoning ordinance to require a special use permit for the conversion of multi-family rental housing to condominiums.  The owners of an apartment complex built in 1928 – two buildings with twelve apartments each – wanted to convert their apartments to condos.  The buildings did not meet current zoning setbacks and parking requirements, but it was a lawful nonconforming use since the buildings were there before zoning was adopted.  The town council voted 7-1 to deny their special use permit. The owners promptly sued the town and won. In Graham Court Assocs. v. Town Council of Chapel Hill, 53 N.C. App. 543, 281 S.E.2d 418 (1981), the court held zoning can regulate land use, but not the form of ownership.  The multifamily housing would have the same land use impacts whether occupied by renters or owners, so the zoning ordinance cannot legally distinguish between the two or require regulatory approval to change from one to the other.

More broadly, the courts have emphasized that land use regulations must be based on the land use impacts of property use, not the identity of the users of the property.  In Gregory v. County of Harnett, 128 N.C. App. 161, 493 S.E.2d 786 (1997), the court invalidated a rezoning that moved property from a zoning district that allowed manufactured-home parks to a district that did not.  The court held that the rezoning was arbitrary after the record disclosed that it was based on undocumented concerns about crime committed by residents of manufactured-home parks and the “type of people” who reside therein, with no evidence showing any consideration of the character of the land, the suitability of the land for various uses, the provisions of the zoning plan, or changing conditions in the area.

Land use regulations must be based on land use impacts, not the identity of the land owner or applicant.  Land use permits are parcel-specific – they are attached to that parcel and are not personal rights of the applicant that can be freely transferred to other parcels. 

These general principles preclude use of either of the two options raised above. 

In fact, the court has ruled directly on the first question.  In City of Wilmington v. Hill, 189 N.C. App. 173, 657 S.E.2d 670 (2008), the court held that a zoning ordinance may not provide that an accessory apartment is permissible only if it or the principal residence is owner-occupied.  The city’s development regulations permitted a garage apartment as an accessory use in a single-family zoning district, provided the property owner lived in either the main residence or the accessory apartment.  The court held the ownership requirement unconstitutional as an impermissible regulation of ownership rather than a permissible regulation of land use.  The court also held that the owner-occupant requirement was beyond the scope of delegated zoning powers.

So what about the concern about proper management of the night club raised in our second question above?

Proper management and operation of a land use is certainly a legitimate consideration in zoning decisions.  For example, in Petersilie v. Boone Board of Adjustment, 94 N.C. App. 764, 381 S.E.2d 349 (1989), the court upheld the denial of a special use permit for an apartment building in a neighborhood of single-family homes.  The court ruled that although the applicant submitted sufficient evidence to support the issuance of the permit, there had also been competent evidence before the board of adjustment regarding problems of noise, traffic congestion, crime, vandalism, and effects on property values to justify the denial of the permit.  But, very importantly, these were potential problems posed by any multi-family housing at that particular site, be it occupied by renters or by owners.

How a sensitive use that is subject to a special use permit requirement is managed certainly has a bearing on what types of land use impacts the use will have. The council members in our second example have a legitimate concern. The proper management of a nightclub can undoubtedly affect how well it fits with its neighbors. But the land use regulatory decision has to focus on land use impacts.  Is there adequate parking?  Is there an appropriate buffer for nearby residences?  Can the site handle the anticipated traffic?  Is this the right location for this type of business?  If the operation does not comply with land use regulations, enforcement actions can be brought and the town could consider permit revocation.  The town can also adopt and apply rules that address proper operation of the club, such as a noise ordinance.  The town can work with law enforcement to address any criminal activity and to enforce alcohol regulations.  A public nuisance action could be initiated if serious problems arise. 

But the town cannot use zoning to regulate who owns the nightclub despite the long-standing interest in this type of regulation.  In fact, one of the cases cited approvingly by the court in the Graham Court case dealt with a similar situation and reflects.  In 1947 the City of Moscow, Idaho adopted an ordinance that required zoning approval for a change in ownership of a pool hall, card room, or beer parlor by declaring any change in ownership to be a new business that required zoning approval.  The Idaho court found such a requirement to be an arbitrary, unreasonable, and thus unconstitutional use of the city’s regulatory authority. O’Connor v. City of Moscow, 202 P.2d 401 (Id. 1949).  The Idaho court found, and the North Carolina court concurred, that zoning must address land uses, not ownership.  So a town cannot tie a special use permit to a particular owner.  It cannot require a new or amended special use permit when the ownership changes.  The zoning authority is simply not broad enough to address those ownership issues.

There are a few instances where ownership is relevant for land use regulatory decisions.  It is permissible to require an application to develop property be from the owner of the property, a duly authorized agent of the owner, or someone who has a legal right to undertake the proposed development.  In the zoning realm, it is permissible to treat contiguous nonconforming lots that are in common ownership as a single “lot” for zoning purposes.  Another example would be where the statutes explicitly allow recent relevant past violations of an applicant to be considered in permit decisions, such as with G.S. 113A-120(b1) for CAMA permits.  But there are very few instances where land ownership or the identity of the applicant will be a relevant factor.

While it is not unusual for a planning board or governing board to be curious about the identity of an applicant or land owner, that is rarely relevant to a zoning decision.  Zoning decisions need to focus on what the potential land use impacts will be, not who is generating them.