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Posts from May 2014.

The train of events from the release of the Oregon Court of Appeals decision in the Metro urban and rural reserves case to the resolution of that case in the Oregon legislature has been an interesting one to follow. The Court of Appeals remanded a decision that followed four years of public hearings and actions to establish urban and rural reserves in the Portland area. Following various stages of shock, denial and anger, the development community, Metro and Portland area local governments changed their positions from one that this was strictly a regional problem with which the legislature should not enter, to one in which such entry was invited.

In enacting the resolution of this case in the so-called “Grand Bargain,” the legislature imposed a solution in one particularly contested part of the region – Washington County – rather than to have the reserves decision reconsidered as the court had commanded. Other deficiencies in Multnomah and Clackamas Counties were left for the Land Conservation and Development (LCDC), those counties and the region to sort out. Within days, the legislature expanded the Urban Growth Boundary (UGB), as well as the urban and rural reserves in Washington County and declared victory to the applause of much of the development and business community and local governments.

Expanding the UGB is important, as urban type development is allowed only within that boundary and significantly affects the price of real estate. Similarly, placing land in an urban reserve presumptively puts that land first in line for addition to the existing UGB for urban development over a 50-year period. And placing land in a rural reserve makes it likely that such land will not urbanize over the next 50 years.

The legislature, local and regional governments, and public interest groups characterized these actions as nothing more than a mediated settlement with the parties to the lawsuit resulting in an outcome that was consistent with initial predictions. This does not change the fact that it was the legislators, rather than local governments, drawing colored lines on a map. Often these supplicants and the legislative leaders will assert that the UGB and reserves processes are just too complex and need to be simplified. Yet these parties might consider their own roles in shaping these processes. Instead of providing a checklist of objective requirements for expanding the UGB, the legislature left in place a system of unquantified “factors” to apply so as to give decision-makers the “flexibility” to reach whatever decision they wished. The legislature and LCDC used a similar system of applying “factors” to the reserves process for the same reason.

In addition, instead of allowing the Land Use Board of Appeals (LUBA) to review these decisions, the legislature specifically directed that review to LCDC, a government-friendly forum that did not work as hard to consider those pesky legal questions that occur in making land use decisions. Both left it to the Court of Appeals to weigh the reserves decision against the criteria and were duly shocked and appalled with the result. It is far easier to blame the process and other participants than to fess up to admitting to the source of the complexities in that process.

In reality, there was an attempt to game the process (through an assertion of “flexibility” which was designed to place a patina of respectability on the result) to justify putting certain lands over other lands into urban reserves than was justified, regardless of what the law said, because some of the participants wanted that result.

However the real problem created by the “Grand Bargain” is the precedent it sets. While both the UGB and reserves processes are difficult (and are supposed to be difficult as the decisions are significant and long-lasting), on what basis can the legislature turn down similar requests for imposition of a legislative solution in Woodburn, Bend or McMinnville which have similarly complex decisions? Will the watchdogs and the environmental community continue to be coy about the application of raw political power to make local planning decisions on the ground?

The quickest and easiest decision is not always the best one. The legislature may yet rue the day it stepped in to impose its will in the reserves case. It will be difficult to deny the second supplicant, much less the third, fourth and others.

The U.S. District Court in Ohio recently considered religious land uses in Tree of Life Christian Schools v. The City of Upper Arlington, Case No. 2:11-cv-009 (U.S. Dist. Ct., Southern Dist. OH, April 18, 2014).  The City’s  adopted Master Plan, recognizes that only 4.7% of its useable land area was zoned “Commercial,” included that one purpose of preserving the limited commercial land is to generate more revenue from commercial uses.  As a result, the Master Plan specifically limited the uses permitted in commercial zones.  The City did not offer a pathway for an applicant to obtain approval for school uses in a commercial zone.

In early 2009, City officials became aware that Tree of Life was considering purchasing a commercial office building within city limits for use as a school.  The City’s Economic Development Director advised the Tree of Life school superintendent directly that schools were not a permitted use.  Notwithstanding, Tree of Life filed an application for a conditional use permit to use the property for a place of worship, a church and residential use, to the extent that residential use includes a private school.  The City responded that a private school is neither a permitted nor conditional use in the commercial zone.  The church responded that the primary purpose of the application was a church or place of worship that could be considered a conditional use.  The City disagreed with this characterization and found that the primary use of the property as a private school did not constitute the use of the property as a “place of worship, church.”  The City instructed that the church could file for a zone change to a zone that would allow a private school use.

Despite that City’s denials of its applications, Tree of Life completed the purchase of the commercial office building,  then proceeded to file suit for violations of the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), among other claims.  The Court determined the case was not ripe because Tree of Life had not petitioned the City to rezone the property.  While the appeal was pending to the Sixth Circuit Court of Appeals, Tree of Life made the rezone application, which the City denied.  The Sixth Circuit allowed Tree of Life to supplement the record on appeal with the denial of the rezoning and the Sixth Circuit remanded back to the District Court.

Tree of Life’s RLUIPA claim was made under the “equal terms” provision that states, “No government shall impose or implement a land use regulation in a manner that treats a religious assembly or institution on less than equal terms with a nonreligious assembly or institution.”  RLUIPA’s equal terms provision is treated differently between the various Circuits of Court of Appeals.   The District Court analyzed the Circuit split related to its analysis of the “equal terms” provision, and recognized that the Sixth Circuit has yet to frame its own interpretation.

coexist_orig   Flickr   Photo Sharing

The District Court determined the Third and Seventh Circuits’ equal terms analysis to be the most reasonable and pragmatic.  Under the Third Circuit’s “Regulatory Purpose” approach, a regulation will violate the equal terms provision only if it treats religious assemblies or institutions less well than secular assemblies or institutions.  The regulatory purpose approach allows cities or local governments to justify unequal treatment by pointing to their objectives in enacting zoning regulations and proving that the secular assemblies treated more favorably do not damage those objectives.  The burden of proof is on the church to show that equal terms have been violated.  In the Tree of Life case, the court found that the City had carefully set forth its regulatory purpose for designating a commercial district to allow office and research facilities that contribute to the City’s physical pattern of planned, healthy, safe, and attractive neighborhoods; provide job opportunities; contribute to the City’s economic stability; and that all schools are forbidden in the district.  Therefore, the City’s decision to deny Tree of Life’s proposal for a school in the commercial district was proper.

The Seventh Circuit’s test, which substitutes “accepted zoning criteria” for the Third Circuit’s regulatory purpose approach, did not provide Tree of Life with any better position because the City had designated that generating municipal revenue was an important criterion for allowed uses in the commercial district.

Moreover, the District Court held that Tree of Life’s RLUIPA claim lacked merit because an apples-to-apples comparison of a secular and non-secular use showed the City prohibited a school in the commercial zone regardless of whether it had a religious affiliation.

The Ninth Circuit applies the equal terms test of the Third Circuit along with the Seventh Circuit’s refinement to the test.  In Centro Familiar Cristiano Buenas Nevas v. City of Yuma, 651 F.3d 1163 1172-1173 (9th Cir. 2011), that Court held that the “city may be able to justify some distinctions drawn with respect to churches, if it can demonstrate that the less-than-equal-terms are on account of a legitimate regulatory purpose, not the fact that the institution is religious in nature.” (Note the burden of proof in the Ninth Circuit is on the government.) As cases come forward in your neck of the woods, be aware of the circuit split and that your case might be the one to push the question to the U.S. Supreme Court for a determination of the correct analysis of the equal terms provision.

Image courtesy of Flickr by Matt Trostle

WSG Holdings, LLC v. Bowie, 57 A 3d 463 (Md., 2012) involved a contested special exception (conditional use permit) for a gun range which was heard by the Charles County Board of Zoning Appeals.  The Board conducted a site visit accompanied by representatives of the applicant as well as two opponents.  Other opponents were barred from the site and there was no transcript of the visit.  The Board granted the application and trial court affirmed, except for a remand on some findings deficiencies.  The trial court rejected inter alia opponents’ contention that the site visit violated the state’s public meetings law.  The intermediate appellate court found such a violation and remanded the decision.  The applicant then sought review.

The decision to conduct the site visit with limited attendance was made in a public meeting and without opposition from the audience.  There was no discussion of transcription of that meeting at that time.  At the site visit, members of the Board were apparently separated into groups with applicant representative speaking to various aspects of the proposal to different subgroups of the Board.  Before the final vote, a member of the public filed a written objection to the exclusion of the general public, the lack of a transcript, as well as the inability to respond to evidence gained at the visit, requesting that the record be reopened to comply with the Maryland Public Meetings Law.  The Board accepted the applicant’s substantive testimony, but denied other relief, granting the application with findings which included references to the site visit.

The trial court found that the applicants had not preserved their public meetings objection for judicial review, given a lack of objection to the process along with its selection of two opponent representatives at an open meeting.  The intermediate court found the post-site visit objection as sufficient to preserve the public meetings contentions.  On review, the opponents contended that the public meetings law violation could not be raised by those attending the public meeting, or those who had not protested loudly enough to the objections to be recorded and that the post-site visit objection was sufficient to preserve error.

The court began its analysis with the strong commitment of the state legislature to the public meetings law, which was also reflected in the county Code and the procedural rules adopted by the Board for the conduct of its hearings (which referenced that law and provided for site visits to be recorded and for public inclusion).  Noting that neither the Board nor the parties could agree on what had happened on the site visit, the court noted the detailed post-visit objection to the alleged breach of a public meetings law, the county’s Code, and the Board’s rules of procedure which the Board had generally denied without comment.  The court observed further that, while site visits may be common, reliance on them by decision-makers implicates heightened procedural requirements and that when the visit goes beyond mere observation (as it did here) the site visits should be “on the record in the presence of the parties.”  Failing this, there should be an opportunity to challenge the evidence received in that visit by cross-examination or other means.  While the county Code of the Board’s rules refers to the conduct of a “hearing” and did not refer necessarily to “meetings,” state law does so regulate meetings and governs here.  In any event the Board violated the county’s Code and its own rules over the conduct of hearings.

The court concluded that the Board’s site visit without sufficient notice, without a record being kept, and without allowing members of the public to attend, especially where site visit information was used in the findings to justify approval, was not fair to the public.  Proceeding to the remedy, the court cataloged the violations of law and concluded that cumulatively, these violations created an irreparable injury to the opponents so that the decision was void ab initio.  The case was thus remanded for an entirely new hearing.

The efforts of the Oregon Open Meetings law are largely untested in site visit cases in this state; however, there is little reason to believe that the outcome would have been different if the same facts were presented.

WSG Holdings, LLC v. Bowie, 57 A 3d 463 (Md., 2012).

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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