Saturday, March 28, 2009

Big Box Drama in Small Town Virginia

The Virginia Supreme Court’s recent decision in Hale v. Board of Zoning Appeals, Va. Supreme Court (February 27, 2009) (click here to read the decision) reads like an old-fashioned story of love and betrayal.

The dispute at the root of the Hale decision began as a 'towne centre'/mixed use development courtship between the small town of Blacksburg (which we'll refer to as the "Town") and a developer who proposed an attractive mixed use development plan (and the associated property tax and sales tax revenues!).

The Town accepted the developer's proposal, and to demonstrate its commitment to the budding relationship, the Town rezoned approximately 29 acres to commercial use in exchange for the developer’s promises (or “proffers,” in land use parlance) to build certain infrastructure and otherwise improve the property.

Those were the salad days when all were happy, looking forward to a beautiful life together in mixed use bliss. But then came the developer's site plans, which -- to the Town's distress -- did not live up to the promises made in the courtship and proposal. In particular, the developer drew plans for a big box development with 176,000 square feet of big box retail space, when according to the Town, he had promised mixed use!

After many discussions and letters back and forth, the Town became concerned that the developer would not return to his original promises (as those promises had been understood by the Town). The Town decided it could no longer trust its beloved and needed to act to protect its interests. So the Town decided to change its ordinance to require a special use permit for any big box facility over 80,000 square feet. The developer objected and said that such an action should not govern the developer because the developer had a “vested right” to develop the land under the Town's laws that were in place when the courtship began. The Town disagreed and the developer appealed to the Town's board of zoning appeals to set the jilted straight.

Despite great public pressure, the board of zoning appeals agreed with the developer after which the Town appealed to the circuit court for help. Adding insult to injury, the local judge agreed with the board of zoning appeals and the developer and ordered the Town to allow the developer to continue according to his new plans.

Exasperated, and running out of options, the Town appealed to a higher authority and appealed the circuit court’s decision to the Virginia Supreme Court. The Supreme Court determined that it could examine the legal conclusions reached by the local judge de novo (afresh, as if never decided before).

After its preliminary determination of the nature of its review, the justices took note of the facts as set forth in the briefs and painstakingly made conclusions of law, and low and behold......justice for the jilted! The court found that the developer had not been specific enough with its initial promises to the Town to prevail on its claim that it had a vested right to build the big box retail space. Although the developer, through its proffers, had made a general promise that it would not put its property to certain uses (thereby leaving open other possible uses, one being a big box development), the justices held that Virginia law requires a promise of a specific use, not a number of specific uses, in order to give rise to a rightful claim of vested rights.

Following the Supreme Court’s decision in Hale, the developer is left to decide if it wants to try for its 176,000 big box space through the Town's special use permit process. Because that process requires public hearings, and judging from the public outcry at the board of zoning appeals, it appears the developer will need to not only woo the Town's council, but also the citizenry, who will now have a second say in how the once-promising relationship develops in the future.