“It’s hard to shoe a running horse.”  That’s not my quote.  It was a comment from the bench by Judge Abraham Penn Jones responding to the Town of Hillsborough’s attempt to bypass a direct court order to issue a conditional use permit in Schaefer v. Town of Hillsborough.

             Hillsborough, however, sore from losing in the Court of Appeals the first time, sought to regain advantage on remand by adding more conditions to an applicant’s permit that would, essentially, nullify the court’s decision.  Hillsborough claimed it was acting pursuant to statutory authority.

             What the town calls statutory authority I call governmental arrogance.  Let’s look at the facts.

             The petitioners in this case, husband and wife developers, owned 2.74 acres in the Hillsborough Historic District – enough for 10 units by right developed as duplexes.  Under Hillsborough’s zoning ordinance they could gain a mere one additional unit – for a total of 11 units – if they met the requirements for a conditional use permit. 

             The Board of Adjustment denied their request after a tempest-in-a-teapot public hearing, but the denial was overturned by the Court of Appeals in August 2009 as an unlawful exercise of legislative power by a board that has no such powers. (As a general rule, governmental decisions for the “general welfare” are legislative decisions which are not properly exercised by a quasi-judicial tribunal).

             The matter was remanded to the town to issue the CUP “without application of any new or different conditions or ordinance requirements.”  But the Hillsborough Board of Adjustment is either illiterate – which no right thinking person would conclude – or it determined that the court’s order did not apply to it.  The BOA proceeded to add new conditions – contrary to the explicit court order – in order to deny the petitioner, in effect, the very CUP the court ordered it to issue.

             So . . . the developers returned to superior court on their second appeal where Judge Jones (as quoted in the developers’ brief filed with the Court) also said this:

            “You don’t get repeated shots at the petitioner over and over and over again.  That’d be like a guy running a hundred-yard dash and the [Town] coming and adding 10 more yards to it at the end.. . . You can’t do that.. . . That defies American jurisprudence. . . . You’re lengthening the track when the race is over.”

             And the second time around, the Court of Appeals agreed.  Again.

             So what’s the lesson?  What’s the take-away-point?

             If you are a literalist, the lesson is merely what the Court of Appeals said, which is that judicial mandates must be followed.  They carry the weight of law.  And Hillsborough is not above the law.

             But there is another lesson here.  And the lesson is that governmental power entrusted to ordinary citizens can be abused – and is abused – on a regular basis, and it takes citizens like the petitioners in this case to fight battles that protect you and me in other venues.

             And why should we thank these plaintiffs?  Because drafting pleadings and doing legal research and dealing with other lawyers and with courts and preparing for arguments is time consuming.  And time consumption by a lawyer translates into money.  Every time a party appeals a decision, each next level costs them somewhere in the low to high five figures or more (and that’s five figures to the left of the decimal point).

             Petitioners in Schaefer went to the superior court twice and the Court of Appeals twice with high-powered legal representation.  Why?  It could not have been because they were fighting for that one unit “density bonus.”  There is no way legal costs could have been justified by that one unit, especially in this economy.

             They appealed – at least the second time – because they felt as though they had been wronged.  It was not about money.  It was about principle.

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             After six nights and 33 hours of testimony and deliberation, the Harnett County Board of Adjustment reached a decision this week regarding a Conditional Use Permit for a regional landfill.  It was a marathon.  I know, because I was there.

             Was it a record?  I don’t know.  My previous marathon was a 5 day, 24-hour hearing in Statesville over a special use permit for an asphalt plant. 

             The hearing demonstrated why we desperately need quasi-judicial proceedings and, despite what I consider to be demonstrable legal flaws in the decision itself, provided a showcase example of how a BOA should operate.

             Quasi-judicial proceedings establish evidentiary frameworks for unpopular but necessary land uses.  Without them, the alternative is a decision based purely on emotion and, sometimes, hysteria.  Or bad math.  (Let’s just count the number of people in the room for and against and let it be “democratic” despite what our comprehensive plan says, despite what our zoning ordinance says, despite what our staff says, and despite what our planning board says).

             A few years ago I tried to count each county and municipality where I had handled some form of land use matter and quit when I had gone some distance north of 100.  The number has risen since.  I think Monday night was the first time in all those jurisdictions when I heard a board member calmly note the obvious – that those who are neutral and in support never come to a hearing, with the implication being the danger of discerning the true nature of public sentiment from the number of people in the room who are opposed. 

             Quasi-judicial proceedings help protect against claims – as we had – that wells 1.5.miles away will be contaminated, even though groundwater didn’t flow that direction and only moves a few feet per year.  That school children will be endangered even though a 150 page Traffic Impact Analysis stated that there would be “no net increase” in trucks as an existing sand mine is closed down and the site is transformed to a waste facility.  And that the facility would be subsidized by the county, even though it was completely false.

             And quasi-judicial proceedings create a record that can be reviewed by a superior court judge for errors of law and to make sure the evidence was material and substantial rather than flimsy and conjectural. Whether there will be an appeal in this case or conversion to yet another use has not been decided.

             But my other point is that this BOA was among the best I’ve ever seen in how it handled the hearing itself.  Each night board members systematically disclosed calls from the media and emails from neighbors and how they handled them. They disclosed civic and personal connections with witnesses.

             The board chair did a better job ruling on objections by attorneys than most judges I’ve been in front of, and he gave some leeway to members of the public to stray from true evidence (in one case, a speech on “the purpose of man”) and to relate blatant hearsay conversations while instructing and reminding board members what can and cannot be considered as evidence.

             At relevant times the rules of the hearing were explained to audience members; the chair did not flinch when some witnesses asked to be affirmed instead of swearing an oath; the rhythm of board questions and cross-examination was orderly; and the atypical nature of the hearing was recognized and accommodated.

             But it doesn’t mean there weren’t flaws.  If there is an appeal – and I’ve been in many – it’s not personal.  I think this board expects the applicant to seek judicial review and will be nonchalant about it.

             One final note: I’ve learned never to underestimate the importance of working with good staff, and whoever assembled the Harnett County team did a pretty darn good job.  After two years and about 100 blog posts, this is the first time I’ve taken time to mention the behind-the-scenes staff who gave straight-up information to both sides, who asked tough questions, who knew their ordinance, who were pleasant in every circumstance, who did not hesitate to give you an opinion, and who did not display biases one way or the other.  And they logged 33 hours on six different nights, often not leaving until past midnight.

             To each of them I simply say “thanks. You serve your county well.”

            To read previous blog posts, continue to scroll down or click on a category of interest in the right hand column.  To be alerted by email when a new post is published, simply click the “sign me up!” button above.  If you learned something, please forward this link to others who also might benefit.

             I love it when I’m right.  I admit that I don’t bat 1.000, but good hits are nice.  In today’s NY Times Roger Cohen (Britain Goes Nimby) writes that 82% of Brits favor wind power, yet in every community in England where turbines are proposed the citizens have fought them with the proverbial teeth and nails.

             Cohen’s disdain for environmental hypocrisy is not concealed:  “As they adopt nimbyism in droves, touchy-feely, green, politically correct types who only eat bacon from locally reared pampered pigs and would hug any hypothetical wind farm morph into rabid reactionaries. They bleat about 350-foot eyesores, turbine noise and animal suffering.”

             Could it be that there is some common DNA between Americans and the folks in Great Britain?

             I’ve written about this phenomenon in this forum several times before, noting that the only places reliable wind sources exist are mountain ridges and panoramic seashores.  It’s an environmentalist’s Catch 22.  Neither choice produces desirable results.

            If we can harness the renewable energy from the tides, the wind and the sun we can wean ourselves from the politically destabilizing and environmentally destructive effects of fossil fuels.  But doing so often places the ultimate decisions not in the hands of federal and state regulatory agencies but in the laps of county commissions and Boards of Adjustment who must decide how the local zoning ordinance should be applied.

             For a review of my past posts on this subject, please feel free to read Earth, Wind, Fire . . . and Google or Destroying the Environment to Save it.

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             The N.C. Supreme Court recently decided a land use case (not a common occurrence) with facts that are, actually, fun to describe.  Let’s review the facts and the holding, and stay tuned for some color(ful) commentary from Morris Communications d/b/a Fairway Outdoor Advertising v. City of Bessemer City Board of Adjustment.

 The Facts

             This is another billboard case.  If you’re a veteran of land use issues you’re probably thinking that the case, ipso facto, will be about vested rights.  And it is, but it has a few twists. (I’ve never done the math, but if a case involves billboards, it’s almost always about vested rights).

             Fairway Outdoor Advertising legally erected a sign in Bessemer City in 2000. It was on land owned by Ralph Dixon and next to the highway right of way.  Five years later, NC DOT decided to widen the road, requiring the sign to be moved to accommodate the government’s project, and requiring Mr. Dixon to make changes with his own land (it was used for a NAPA auto parts store).

             Fairway applied for and received a new sign permit and a building permit.  Both permits required “work” to commence within 6 months or the permits expired.

             So . . . Fairway got to “work.” How? It began condemnation negotiations with NC DOT.  It negotiated a new lease with Mr. Dixon.  It had numerous communications with NC DOT about its negotiations with Mr. Dixon.  Although the opinion doesn’t say it, I’m sure a surveyor was engaged to survey the leasehold area.  Someone would have had to create construction plans. 

             On June 8th, Fairway received a renewal on its building permit, and on June 12, the Bessemer City zoning ordinance was changed to ban most outdoor advertising (i.e. billboards).  The change in the law, of course, immediately raised the question of who was protected under the prior law because their rights had vested.

             Cooperating with NC DOT, Fairway removed its sign the day after the new sign ban ordinance was passed, but even then DOT had not figured out where the right-of-way would be located, and Mr. Dixon still had not determined how the building on his site would be reconfigured to accommodate DOT’s widening.

             Eventually, all the parties whose actions and decisions were beyond Fairway’s control got their act together.  On December 4th and 5th the county inspected the footings and the next day the sign went up. And five weeks later Bessemer City sent Fairway a Notice of Violation saying the sign was not allowed under the new law, its permit was no longer valid, and it had 30 days to remove its expensive asset that was only taken down in the first place because the state has the power to make it do that when it expands a road.

 The Appeal

             Fairway appealed the NOV to the Board of Adjustment and lost.  It appealed the BOA’s decision to the superior court and lost.  It appealed the superior court’s decision to the Court of Appeals and lost.  But this time there was a glimmer of hope.  Judge Robert N. Hunter from Greensboro (as opposed to the Judge Robert C. Hunter, from Marion) was on the three judge panel.

             Judge Hunter (from Greensboro) has become a consistent protector of property rights and a judge with limited patience for abuses of governmental authority (as demonstrated in the recent Amward Homes case out of Cary).

             Judge Hunter dissented, giving Fairway an automatic right of appeal to the N.C. Supreme Court. 

             [Procedural note: the NC Supreme Court is not an open forum for any dissatisfied party.  There are specific ways you can reach the N.C. Supreme Court to present a case. If your Court of Appeals panel is divided, your appeal right is automatic.  If your panel is unanimous, you have to seek the Supreme Court’s permission to review it, and then they usually tell the petitioner no, except under certain specific situations, such as case of compelling public interest, etc.]

 The Decision

             The first aspect of the Court’s decision pertained to the deference given to local interpretations of local ordinances.  The Court of Appeals held that the BOA’s decision was “entitled to deference under de novo review.”  The Supreme Court caught this nuance and corrected it.

             A reviewing court may consider a local government’s interpretation of its ordinances, but under de novo review there is no entitlement to deference.  A reviewing court is free to substitute its decision for that of the BOA.

             [Real World Insight: As a practical matter, somewhere between 99% and 99.5% of all boards of adjustment uphold the ordinance interpretations of their planning staff.  De novo review pertains to errors of law, not fact.  Therefore it is important that a judge’s hands not be bound when he or she applies the law.]

             But here’s where it gets fun.

             The Bessemer City ordinance provides: “If the work described in any compliance or sign permit has not begun within six months from the date of issuance thereof, the permit shall expire.  Upon beginning a project, work must be diligently continued until completion with some progress being apparent every three months.”

             The zoning administrator interpreted the ordinance to mean that, even in this information-based economy, only the man on the bulldozer or trackhoe is capable of doing what we call “work.”

             Fairway argued that the term “work” had a broader meaning, and the court agreed, citing the long-held principle that in land use – like baseball – the tie is always to the runner. (Actually, there is no such rule in baseball with that description. It’s more of a colloquial expression)

             Well, it didn’t actually say it that way, but that’s what the court meant.  What it actually said was 1) when there is a reasonable doubt, “governmental restrictions on the use of land are construed strictly in favor of the free use of property,” and 2) “Zoning ordinances are in derogation of the right of private property, and where exemptions appear in favor of the of property owner, they should be liberally construed.”

             In other words, if a zoning ordinance term is not abundantly clear, the private citizen who presents an alternate and reasonable interpretation prevails.

             But the decision has an “edgy” tone that, to me, betrays judicial impatience with the zoning administrator’s interpretation.

             The zoning administrator insisted that the sign be treated as a “new” sign, even though he was fully aware that Fairway was forced to relocate the sign by NCDOT and that there were several matters to be worked out before it could be moved. 

             Then the court says this:

             “The record raises an inference that the Bessemer City zoning administrator took advantage of the ambiguity in the sign ordinance and the uncertainty and complexity of the road widening project to hasten the city’s prospective ban on outdoor advertising. . . . He also revealed that . . . he had a ‘general disagreement with billboards.’”

             [Practitioner’s note: the only way the court had this information in the first place is because a good lawyer engaged in pointed cross-examination of the zoning administrator. Portions of the cross-examination are repeated in the opinion verbatim, and they illuminate both the problems with the initial decision and the court’s reaction]

             It is more than significant that the court noted that a fundamental reason Boards of Adjustment exist is to “correct errors or abuse.”

 Color(ful) Commentary

             [Writer’s note:  Last week I participated in a hearing in Rowan County over a conditional use permit for a 1200 foot broadcast tower that lasted, in total, for almost 20 hours. Planning director Ed Muire told me before the hearing that he reads this blog and appreciates my color commentary and insider’s view of the world of development and the legal system.  On cross-examination, Ed was unbiased and factual, and he, like so many planners who serve the public, had to stay until past midnight the first night and past 10:00 p.m. the second night.  So Ed, this color commentary is for you]

             I truly believe that all lawyers – like all people generally – prepare carefully for what they should and will say in a formal hearing, all the while having their own private, fantasy-world conversation running in the background – like music in an elevator – that expresses what they really wish they could say or had said. 

             My fantasy presentation before the Bessemer City Board of Adjustment would have run something like this:

             “Dudes.  Where in the ordinance is there anything about “work” having to be visible “on the ground?”  It ain’t there!  The most you have is the description that work must be “apparent,” and the record clearly reflects what was obvious and apparent – that Fairway was actively engaged in all sorts of activity to get the sign back up while waiting for NCDOT and the landowner to make their [darn] decisions.

             “Do you truly think the folks at Fairway were not working when they were negotiating with Mr. Dixon and NC DOT???  If the company had not paid them wages for that work they could have sued under more than one employment statute.  The Department of Labor certainly considered it work.

             “If the employees handling the negotiations didn’t pay state and federal taxes on income from their “work” negotiating with Mr. Dixon and NCDOT they could ultimately go to jail.  The IRS and NC Department of Revenue certainly considered them to be earning wages for work.

             “Think you could convince the sign engineer’s and the surveyor’s licensure boards that they weren’t working when they designed the sign and the lease area where it would be placed??

             “And how many of you came home from work today able to point to one visible thing you did other than emails on a screen and words in airspace from phone calls?

             You get the picture.  The local interpretation was, as the court said, “unduly restrictive” and, as the court implied, the result of an improper personal bias.

             And to Mr. Muire, who might be wondering, my fantasy presentation before the Rowan County Board of Commissioners was the one I gave and the one you heard. I’m just sorry that it wasn’t colorful like the one I just “did.”

             To read previous blog posts, continue to scroll down or click on a category of interest in the right hand column.  To be alerted by email when a new post is published, simply click the “sign me up!” button above.  If you learned something, please forward this link to others who also might benefit.

             In the final scene of the movie Back to the Future III, Marty McFly (Michael J. Fox) stands on the train tracks as Doc Brown and his wife Clara arrive on a locomotive from 1884 fitted with folding wings and an engine from an unknown but distant future.  As they prepare to return to that future time, Doc Brown shouts to Marty “Where we’re going, we don’t need roads” as the engine goes airborne and disappears.

             Although fictional, the dynamic is a proven one.  Technological changes have always been one of the factors that have altered the ways we use, develop and regulate land.

             Prior to WWII, American towns were held together by centripetal forces that held development near the center like the sun holds the planets in orbit.  Banks, churches, department stores, schools and the neighborhoods that were connected to all of these uses by sidewalks both prevented and discouraged what later became known by the pejorative term sprawl.  When you moved beyond them you moved to the country.

             But after WWII, the automobile became a primary and improved means of transportation.  Town residents now had greater means to move beyond the center, and year after year more roads were built to accommodate movement to what became ubiquitous suburbs built on cheap land with large lots and shopping malls wedged between.  Land uses that once were geographically connected were now separated, connected by roads and machines on wheels.  And entire zoning codes had to be developed in response. 

             The automobile, thus, became a centrifugal force, sending main parts of the center city into the outlying areas that once was country.

             Looking, as Doc Brown did, “back to the future,” there are many changes one can predict or identify now based upon technological advancements that have been made or are being developed.

             For decades the neighborhood gas station was connected to a repair garage, and the two uses were zoned as one.  Then gas pumps became ancillary uses to convenience stores rather than garages, which meant changes in allowed signage and some expansion of locations. 

             But with the advent of the battery-powered, electrically recharged car, will there become a new use – a “recharge” station – where cars can be parked long enough to receive a new charge for the trip home?  Will zoning codes treat it as a primary or ancillary use in various zoning districts?  And could it be connected to just about any non-residential use or, for that matter, residential uses themselves, such as apartment complexes that provide recharge stations just like they provide a swimming pool?

             Wind turbines, yet an infant industry, create an opportunity and a dilemma.  They are, in essence, industrial power generators converting wind into electricity.  But these large, visually obtrusive and audible industrial machines need open land – and open land is invariably zoned for agricultural and low density uses, not industrial ones.  Under many states’ laws, placing a 250 foot tall wind turbine in the middle of an AG district would constitute illegal “spot zoning,” and calling them wind “farms” doesn’t make them agricultural.  And good luck to the company that thinks it can meet special use permit requirements for something of this magnitude.

             It doesn’t help that the only places that have sustained, high winds are “pretty places” that folks want to protect from visual clutter – places such as the coast and mountain ridges.

             Solar “farms” are another new industry made practical by modern research that local governments are trying to accommodate and regulate.  Solar farms, to be economically feasible, need acres of open space with good southern exposure.  And they are, intrinsically, industrial.  Do we allow them in agricultural districts as primary uses?  And, more importantly, do we allow them as accessory uses on smaller scales in any zoning district if placed on rooftops of schools or office buildings?

             Cell towers, although seemingly regulated as essential nuisances, will continue to be accepted more readily near homes and offices as we become increasingly connected to the outside world through little handheld digital devices that used to be “just” phones but now play movies and videotape soccer games.  But as smart phones and their eventual replacements morph from being extensions of our lives to, in some sense, being our lives, we will view quite differently the physical architecture that makes signals and download speeds possible.

             Who would have thought in 1980 that computers would, in twenty years, make it possible to have a virtual university campus?  Or that scanned documents and email and fax machines would one day cause the U.S. Postal Service to begin shrinking the number of post offices by the thousands?  And who can guess what the next twenty years of technological and digital advances will do to affect our interconnected relationships with and the way we regulate land?

             My crystal ball is cloudy.          

 Note: This article was originally written for SML Perspectives under the title Land Use, Zoning Codes and Technology: Old Crossroads, New Turns.

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             My June 9 post on solar farms (“Destroying the Environment to Save It”) discussed the world’s largest solar farm – a 3,600 acre project in the Mojave Desert.  Little did I suspect that two weeks later the place I live – Guilford County – would be a “finalist” for one even larger.

             I say “finalist” with quotation marks not to indicate a direct quote but to suggest doubt with a pinch of sarcasm.

             A new company in Melbourne, Florida called National Solar Power has just listed Guilford County as one of seven locations throughout the Southeast where it might locate a mega solar farm at least 4,000 acres in size (either as one tract or several tracts).  It would be the largest solar farm in the world.

             I read it first in the Triad Business Journal which noted 1) this county doesn’t have 4,000 contiguous acres or even 20 tracts of 200 contiguous acres 2) the company says tax credits and incentives are key BUT nobody at state or local levels had even heard of the company or the project, 3) it won’t create but a handful of long-term jobs, yet tie up 4,000 acres, 4) the only possible buyer of the electricity – Duke Power – knew nothing about it, and 5) they went to the media first, indicating either a total lack of sophistication and experience or that something else was going on (which I’ll discuss below).

             A more subtle – but to me a far more interesting – comment was made in a July 2, Greensboro News & Record editorial where the paper questioned whether this “industrial” use would gobble up land that should be reserved for industries that would hire more people, saying “Solar farms might be better situated in a different place than land that a manufacturing plant might need – near a highway or the airport, for example.”

             Here’s the rub.  Why would a solar farm – inherently an industrial use – be relegated to the areas and zoning districts reserved for industry?  In fact, they should not.  Solar farms require wide open spaces, and they generate practically no traffic, noise, dust and any of the other qualities we link to industry.  They could be located off country roads with little access to highways and airports.

             But a planning department proposing a zoning ordinance text amendment to enable the use might think too narrowly, allowing such uses only in “industrial” districts.  But if the open land is truly rural, a challenge could be made on the basis of spot zoning.

             Two more points.

             First, land sprawl through out-in-the-country subdivisions is a problem.  While I challenge often-made claims that these subdivisions are replacing “farmland” as opposed to non-farm open and rural land, I tend to agree with those who acknowledge the growth problems than with those who don’t. 

             A solar farm, in my opinion, would be a better way to preserve open land than a low density residential subdivision.

             Second, here’s my interpretation of this news release.

             I accept the company’s statement that incentives and tax credits will play a major role in its decision.  It’s the only point they made that makes any sense to me.

             But incentives have no rationale if the company has already announced it is coming and it is looking at no other places.  Therefore, companies occasionally establish a “straw man” location to create the appearance of competition so that representatives in their desired location will sweeten the incentive package.

             My experience suggests that National Solar Power has chosen not one but at least two and possibly a distant third location. While it is considering engineering and other feasibility matters it is negotiating aggressively with those local and state officials, the local power companies, landowners and building contractors.  And in each discussion they can tell a county or a landowner that they are considering seven – 7 – locations, so they should not be stingy with incentives or greedy on land price.

            In that respect, Guilford County was just somebody’s poor choice to add to the faux list, and now the company looks like what it truly is, a neophyte in the area of development and local government incentives.

 Coming Up Next

             I recently wrote an article for the magazine SML Perspectives on technology as a driver of land use norms.  Because 1) I discuss solar farms and 2) I make points that at least rhyme with some of the points here, my next post will be a reprint of that article

            To read previous blog posts, continue to scroll down or click on a category of interest in the right hand column.  To be alerted by email when a new post is published, simply click the “sign me up!” button above.  If you learned something, please forward this link to others who also might benefit.

             Just when we thought the N.C. Court of Appeals had fully resolved all matters related to APFOs (“Adequate Public Facilities Ordinances”) the N.C. Supreme Court has decided to review the issue by granting certiorari in two cases: Lanvale v. Cabarrus County (a previously unpublished opinion) and Amward Homes v. Town of Cary (a case that was both published and publicized).

             Let’s review what APFOs are, what our courts have said about them, and then visit the Lanvale and Amward cases to see what’s going on.

 What is an APFO?

             APFOs are, broadly described, local ordinances that generate revenue from developers at the subdivision approval stage to fund school construction.  Although other types of public improvements are possible, it’s usually about schools.


             One, because the cost of utilities to serve the development actually can be shifted to the developments that they serve.  Two, because schools are never funded forward (before being needed) but only after there is a clear need, meaning growth is always ahead of school construction.  Three, rather than “blame” the new industries coming into town as the cause of population and school growth, we tend to place the bulls eye on the developer’s back as though subdivisions created the growth in the first place. 

             In a previous blog post on the Union County APFO decision, I said this:

          Housing demand is primarily a function of two things: organic population growth (i.e. mom and dad have children) and jobs.  Nobody from Ohio has ever come to North Carolina just because they especially liked one of our new subdivisions.  But North Carolina is full of folks from Ohio and New York and Pennsylvania and West Virginia who came here looking for jobs.

            This raises an interesting irony.  Some counties spend millions of dollars in incentives to lure new companies that will create jobs and expand the tax base so that infrastructure such as schools can be more easily paid for.  But instead of using the added tax base to build more schools to meet the expanding population that came for the jobs, these same counties are tempted to restrict the ensuing population growth to protect existing school budgets.

What Have Our Courts Said About APFOs?

             Three panels of the N.C. Court of Appeals have said emphatically that our statutes do not allow APFOs.  In 2006 the Court of Appeals first said that a county could not shift the burden of funding school construction through “impact fees” (an APFO) in Durham Land Owners Ass’n v. County of Durham.  

            Then, in 2009, the Court of Appeals went a step further in Union Land Owner’s Ass’n v. County of Union, saying that neither the subdivision nor general zoning powers enabled a county to impose a school impact fee.

             And just last year, in Amward Homes v. Town of Cary, the Court of Appeals not only placed extra exclamation points on the previous holdings, but it made the Town of Cary pay the developer’s legal fees.  To read my commentary on Amward Homes where I described how Judge Robert N. Hunter (of Greensboro) subjected Cary to what I then called “a full body slam,” click here.

             [Side Bar:  In both the Amward Homes and the Lanvale cases, the counties claimed that the developers – who did not have standing to sue at the time the ordinances were originally adopted – could not sue them now because the two month statute of limitations had run.  In my opinion, this is nothing but a cynical defense that says, essentially, “we might be operating completely illegally, but you have no legal recourse because you missed the small window of opportunity to file your suit.”  Of course, had they done it within the two months, the county then would have claimed that they didn’t have standing yet.  End Side Bar]

             Judge Hunter was not amused and determined that the two month statute of limitations did not apply.  Essentially, he said, Cary’s APFO was a school revenue generating ordinance, not a zoning ordinance, even if it was placed within the local zoning regulations.

 How is Lanvale v. Cabarrus Different?

             Lanvale is different in one key way.  The General Assembly granted Cabarrus County, in HB 224, specific authority in 2004 “to enforce  . . . any provision of the school adequacy review . . . under the Cabarrus County Subdivision Regulations.”

            But the Lanvale opinion, written by Judge Robert C. Hunter (of Marion) said that special legislation made no difference, stating “The language of House Bill 224 is unambiguous: the County may ‘enforce’ its “school adequacy review’ provisions; it does not provide the County with the ‘authority’ to adopt a revenue-generating impact fee.”

             In other words, words matter.  The Court adopted a narrow and strict interpretation of the local bill based upon what the language of the statute unambiguously said, not what Cabarrus wanted it to say.  Judge Hunter added, had the General Assembly adopted HB 224 after the Union Landowner’s case, then the Court possibly could conclude the legislature intended something else.

 How Does Certiorari Work?

             Court of Appeals cases are assigned to three-judge panels.  If there is a dissent, then the case can be appealed by right to the N.C. Supreme Court.  If the decision is unanimous, then the losing party must petition the higher court to grant discretionary review and explain why.

             Lanvale was decided unanimously last September 7, 2010, and Amward Homes was decided seven months before that.  However, last week the N.C. Supreme Court decided to hear both cases, granting what lawyers colloquially call “cert.”

             It is probable that the N.C. Supreme Court wants to look at the entire issue of APFOs because Amward and Lanvale, while similar, have different fact patterns.  And it is possible, but I doubt it, that it will look only at whether the 2004 legislation granted Cabarrus County special rights and the technical defenses related to statutes of limitation.

             When the decisions are published, you will find descriptions of the cases in many places.  But you’ll find the insights and commentary here.

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             If you follow North Carolina local government and land use issues you no doubt have been following the topic du jour, annexation reform.  But the depth of media coverage has been frustratingly shallow, and 95% of what you’ve read has been bill updates and pro/con sound bites.

             Join me as I present some perspectives you haven’t encountered in the state’s newspapers.  Following is governmental and political commentary, not a detailed description of the new annexation legislation.  

The First Battle

             If you can define the issue, you can control the debate, and when you can control the debate you can control or influence the outcome.  Thus, the first battle is conceptual.

             Major legislative revisions – when there are powerhouses on each side – require a framework of public understanding.  The framework must be simple and compelling and expressed in language that answers the same question it raises.

             What for decades has been called “involuntary annexation” recently acquired a new term: forced annexation.  It sounds bad.  It evokes images of land grabs and the invasion of sacred rights. 

             Involuntary annexation is a statutory term – a legal category.  Forced annexation is a political slogan. 

             When forced annexation is the accepted description it’s easy to say you’re opposed and conceptually and psychological hard to say you support it.  When you win the battle of words you’re half way to victory on the political battlefield.

 Municipal Arrogance

             Unchecked power breeds arrogance.  It’s a universal dynamic.

             Reform proponents had a huge gun to shoot at will, and it was handed to them by municipalities themselves – abuse of the power granted to cities to annex. 

             There have been a few cases – not many, but enough to show that it can happen – where municipalities had involuntarily annexed surrounding urbanized areas then failed to deliver the equivalent services required by statute. 

             And there have been cases, usually involving smaller municipalities, where it at least reasonably appeared that an annexation had nothing to do with planning and growth management and everything to do with grabbing an industry for its potential tax revenue.

             And if that wasn’t enough, there also were annexations where water and sewer lines already were constructed and paid for, but annexees were required to pay exorbitant tap-on fees in the range of thousands of dollars, fees that normally are required as capital contributions to pay for new lines serving a new subdivision.

             As a group, one could argue, quoting from the Book of Hosea, that municipalities had “sowed the wind” and were now “reaping the whirlwind.”  Or, as some parents like to say, “You should have considered the consequences when you did what you did.”

 Changing the Rules

             Changing the rules at half-time or, in this case, applying new rules after the game is over is another – and probably worse – form of governmental arrogance.

             Several municipalities played by the rules, following the statutes, and spent enormous sums of taxpayer dollars defending their actions in court.  But even after appellate court review and affirmation, this General Assembly exercised the strong arm of power and overturned several of those legal decisions ex post facto

             When our statutes grant cities specific powers, they should be left to use them responsibly without having to worry about what is essentially a General Assembly veto.  I question whether a “legislative veto” of a Court of Appeals’ decision is a violation of the doctrine of separation of powers.

 Counties are Sometimes the Real Culprits

             The new legislation is imbalanced for one key reason – it limits cities’ ability to expand borders to handle and manage urban growth, but it doesn’t take away from counties their ability to create urban areas adjacent to prevailing municipal limits.

             Growth must be studied and planned and managed.  Transportation, land use and utility studies can be worth their weight in gold. But unchecked urban growth beyond the reach of the governmental hubs where it originates is a big problem. The logical control of this growth should be from the hub, not the wheel’s rim.

             Ninety percent of the growth management problems stem from counties approving small lot subdivisions adjacent to cities and towns, often on substandard community water and sewer systems that fail in a few years. And as we have all seen more than once, when community utilities fail, subdivision residents will look to be bailed out by municipal systems.

 But It’s not Cities Versus Counties

             City versus county is a governmental services discussion.  To understand annexation, the better dichotomy is urban versus non-urban.

             [Sidebar: I intentionally use “non-urban” instead of “rural” because of the misplaced and errant ongoing discussion over the “loss of farmland,” which is really about loss of rural areas that for decades have not been, are not now and will never again be used for agricultural purposes.  Rural versus agricultural. There is a difference. End sidebar]

             When I traveled through Europe by monorail over 30 years ago I was both intrigued and surprised that cities often abruptly stopped and rural areas started at noticeable points.  There was no sprawl. You were rural or you were urban.

             As (previously) written, our annexation statutes allowed for involuntary annexation only when an area had become urbanized, a status that was statutorily defined.  The rationale has been that cities must be able to manage urban growth. 

             Without realizing it, our legislature’s one small step towards political point-scoring with “forced annexation” opponents has been a giant leap, over time, towards the redefinition of the roles of counties and cities.

 Is “Cry Baby” a Hyperbole?

             As Americans, we are a self-entitled group.  We demand perfect cell coverage but become indignant when a cell tower is placed in our neighborhood.  We expect to be able to consume goods indiscriminately, yet scream irrationally when a disposal solution is proposed for a location within fifty miles.  We demand more and better governmental services but vote for the politicians that seduce us with promises of lower taxes.

             It’s more than NIMBYism.  It’s self-entitlement.

             Many Americans lead lives that can only be described as urban.  Their job is in the city.  They buy groceries at Harris Teeter.  All of their restaurants are in the city.  Their church is in the city.  And their children’s soccer teams, their bridge clubs and their Rotary Clubs are all in the city.

             But they insist that they should be able to live in that most oxymoronic of land use categories – the rural subdivision – so that they should not be required to pay the municipal tax dollars that support the sewer line serving their workplace, the landfill that takes all of Harris Teeter’s cardboard boxes, the water lines to their favorite restaurants, the streets that connect all of these or the police and fire services that protect them.

             I’ve heard their voices many times at public hearings and read their statements in newspaper articles.  “I moved out of the city because I didn’t want to pay city taxes.” Most folks have no sympathy for someone whose tax free use of these services requires everyone else to pay a bit more.

 The New Legislation

             The recently ratified House Bill 845 is the most cumbersome and labyrinthine local government legislation I have ever read.  It does more than discourage municipalities from starting the process.  It also encourages denial of the municipality’s decision by property owners by providing for simple and convenient “voting” and new procedures for judicial review.

             I sympathize with the planners and city attorneys who now have to follow a mandated 87 step procedure to expand municipal boundaries.  And I sympathize with elected officials who will spend countless hours dealing with these issues, only to have property owners in the annexed area vote to deny the adopted petition.

             Local governments are established and granted powers for many reasons.  Where would we be if a city needed to expand a city street to accommodate regional traffic but the decision could be overturned by a percentage of those who lived on the street? 

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             He never served in the military.  He set no athletic records. He didn’t write best-sellers, and he wasn’t a rock star.

             Max Heller was my hero because, almost single-handedly, he envisioned and spearheaded the rebuilding of a city in decline.  He died this week at age 92. The city is Greenville, South Carolina, a city I never visited until three years ago.

             Heroes of myth usually have a story of origin that creates and begins the hero’s timeline.  Max Heller was born in Austria and he foresaw the German occupation and problems for Jews. He was only able to escape to America because he met an American girl at a pre-war dance and shared addresses with her.  He later wrote and asked if she could find him a job in America so he could escape. She found him a job, sweeping the floors of a Jewish-owned mill in her hometown of Greenville, South Carolina.

             Mr. Heller quickly rose within the company and eventually owned his own shirt manufacturing company in a town whose broad Main Street had become largely deserted after experiencing the effects of suburban sprawl and the exodus of shops to the malls.

             He ran for and was elected to the Greenville city council, and then became its mayor in the 1970s.

             My friend, Deb Ayers, owns a leather shop on Greenville’s Main Street.  She once told me how Mr. Heller went to all the remaining property and shop owners in the downtown to ask them to buy into his vision.  “And he sat right here at this table with my dad and me,” she said, “and he asked us if we would like to see a Main Street with large trees lining the street, and restaurants with sidewalk cafes and women pushing baby strollers, and of course, we said ‘yes.’”

             And that is what downtown Greenville looks like today.  It is a model of what can happen to a city with the right vision, the right energy, the right political leadership, and the right public-private partnering.  It’s what can happen when petty political bickering and posturing give way to common goals.

             In November of 2008, as then-chairman of the High Point City Project, I had the privilege of leading a bus full of business and political leaders from High Point to meet with Greenville officials to witness what they had done and to hear their story.

             The Greenville Renaissance they described to us started with Max Heller.  Few conversations could be completed without mentioning his name.  Mayor Heller may have died, but the story continues.  My law firm has an office a couple of blocks off of Greenville’s Main Street. I visit the city often, and each time I’m there it gets even better.

             You can read a link to his obituary here.  A short article on his life that gives greater details of his escape from Austria can be found at this link.


             After escaping from the Nazis and seeking shelter in a country founded on principles of religious tolerance, after working his way up from janitor to company owner and creating a Miracle on Main Street, and after a career grounded in hard work, integrity and inclusiveness, Max Heller was reminded that the Germans did not have a corner on anti-Semitism. 

             Following is a one-sentence description from another one of his obituaries describing his only race for Congress: “Heller ran for Congress in 1978 as a Democrat, losing to Republican Carroll Campbell in a race where a Campbell campaign poll asked people’s preference for Campbell, described as a native South Carolinian, or Heller, described as a Jewish immigrant.”

             Make whatever point of it you wish.

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            In the recently issued opinion Wilson v. City of Mebane, several things just didn’t seem right to Mr. Wilson.  Or fair, for that matter.  So he sued.  And he won, but it took a lengthy and costly trip to the Court of Appeals.

             This is basically a vested rights case, but if you stick with me to the last couple of paragraphs I’ll explain something about case interpretation that is universally true but never found in a legal treatise or taught in law schools.

 The Facts

             Mr. Wilson bought a residential lot in Mebane in 2005 and tried to rezone it to a commercial designation.  He was turned down.  A year later, a developer wanted to build a Walgreens next door on 3 lots totaling 1.62 acres.  Two of the lots were zoned for commercial use, but the one next to Mr. Wilson’s lot was residentially zoned.

             At the time, Mebane had both a landscape ordinance and a zoning ordinance.  Both ordinances controlled development, and the landscape ordinance required a 50 foot buffer between commercial and residential uses (i.e. a 50 buffer between Walgreens and Mr. Wilson).  There was, however, an exemption for lots under 5 acres.  The zoning ordinance was silent on the issue.

             [Side Bar: You’re wondering as I am why Mebane had two separate and distinct ordinances that controlled different aspects of zoning.  Mebane also decided that they could do it a better way and decided to fix it, and that’s why we now have a case to discuss. End Side Bar]

             The developer had a series of meetings with the city planner who explained that the 50 foot buffer could be waived.  Nonetheless, the developer tried to buy Mr. Wilson’s lot, and Mr. Wilson offered it for a commercial rather than a residential price.  So, the developer decided to move forward without buying it.

             The opinion doesn’t say it, but I don’t think I’m going too far onto a limb to suggest that Mr. Wilson still smarted from being turned down by the City on his own commercial rezoning, and now he learns that the City might support the development of a Walgreens next door that needs his land but is unwilling to pay what he considers a fair price.

             The developer then submitted four different versions of its site plan during the calendar year 2008, spending lots of money in the process. The final plan was approved in February of 2009 and a building permit was issued.

             But there was a problem. The City of Mebane was drafting and approving a new Unified Development Ordinance throughout this period that did not contain the buffer exemption for lots less than 5 acres.  In fact, the new UDO was adopted two weeks after the developer’s first (and rejected) site plan was submitted.

 The Appeal

             Mr. Wilson was not amused that the developer got a building permit without being required to comply with the new UDO’s buffer requirements.  So he appealed the staff’s decision to the Board of Adjustment, contending that the developer had not acquired a vested right and that he should be required to provide a 50 foot buffer.

             The BOA turned Mr. Wilson down, finding that the developer had acquired a common law vested right to develop under the old ordinances.  So, Mr. Wilson petitioned for a Writ of Certiorari to obtain judicial review of the BOA’s decision.  And then the judge turned him down too, finding that the developer had acquired a vested right to develop pursuant to the former law.

 Understanding the Lawyer’s Role and the Client’s Dilemma

             Attorneys with litigation experience know that there is a critical point in a case where their client’s lawsuit has been unsuccessful.  The attorney must decide if appeal stands a chance, and the client must decide if he or she will continue to pay legal fees based on their attorney’s advice.  It can be a tense moment, depending upon cost, client motivation and the attorney’s demonstrated skill.  Mr. Wilson’s attorney advised him correctly, and he decided to pull the trigger and appeal.  The victorious party usually has no choice but to defend.

 The Law on Vested Rights

             There are two ways to continue doing what you are doing under a prior law.  Both are referred to colloquially as being “grandfathered,” but the legal term is “vesting.”

             The first way to obtain a vested right is by statute (generally, obtaining a valid building permit, entering into a Development Agreement, or having a site plan to vest).  The other way is by “common law.”

             Common law vesting has been described in legal terms many times.  A lay definition might be more helpful:

             A person who 1) incurs substantial expenditures 2) in good faith reliance on 3) valid governmental approval of the project, may proceed under the law that existed when the approval was granted 4) without the government at a later time being able to pull the rug out from under him by changing the law.

 The Opinion

             There is nothing circuitous about this opinion. It was written by Judge Hunter (from Greensboro) who went straight to the key issue – show me the valid government approval upon which the developer relied to make its expenditures. 

             Judge Hunter relied upon the straightforward timeline.  New UDO adopted in February of 2008.  Final approval of the developer’s site plans and issuance of building permit in February 2009.

             Judge Hunter was not persuaded by the City’s argument that the developer had relied upon its assurances that it could proceed under prior law before obtaining approval yet after the new UDO was adopted.  Assurances by staff do not constitute “valid governmental approval.” His position was legally correct.

 The Gremlin called “They”

            The facts contain long descriptions of the developer’s meetings with and reliance upon the advice of city staff.  Inexperienced developers too often consider a city or county to be a single-celled organism with a unified thought process and singular voice, spoken through a member of the planning staff.

             Attorneys who represent developers commonly hear such phrases as “I met with them and they told me such and such.”  Or “I did everything they told me to do.”  Peel back a couple of layers and they is usually a member of the planning staff.

             Staff are absolutely indispensible in the zoning process, but whether “they” is the planning director or the most recently hired college grad, they do not ultimately control the planning board, the elected body, or the courts.

 The Legal Insight

            Legal principles are easy to learn and almost just as easy to explain.  The difficulties arise in the application of the law to certain fact patterns.  Thus, the facts of a case are critical in the opinion’s interpretation, and even more critical in deciphering how it becomes legal precedent.

             When a case starts in the trial courts, facts are often disputed, and they are explained and described in volumes of documents.  On appeal, facts must be whittled down to the essential few bullet points.  And when a judge writes an opinion, he or she then summarizes the facts even more, choosing which to emphasize and which to ignore.  This is universal.

             Thus, when future lawyers and judges are required to distinguish between two competing opinions and decide whether an earlier case establishes precedent, he or she studies the facts.  The problem is, the facts recited in the opinion are always the abridged version (when compared to facts before the trial court), and being incomplete they are decidedly imperfect. One never knows years later which key facts might have been omitted because the judge was focusing on one issue rather than another (e.g. the primary legal point but not the seemingly minor procedural point that becomes the issue in a future case).

             In the present case, the absence of a key fact jumped out at me.

             Early in the opinion it was stated that the planning director advised the developer to rezone the residential lot so that he was building on 3 commercial lots instead of placing 1/3 of a drugstore on a lot zoned for residential use.  But the facts say nothing about the rezoning having taken place.  Maybe it was not necessary to say it.  And maybe rezoning didn’t occur.

             But if the third lot had not been rezoned, then the building permit would have been wrongly issued for that reason alone.  And a discussion of vested rights would have been superfluous.

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