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Item 1 III Item # I. �j ., iEik -�-1 River MEMORANDUM TO: Planning Commission FROM: Michele McPherson, irector of Planning DATE: May 13, 2003 SUBJECT: Legal Training with Peter Beck, City Attorney Attachments • • Land Use and Zoning Legal Review Outline-Parts 1 and 2 Peter Beck,City Attorney with Gray,Plant, and Mooty will be in attendance to review the legal basis for planning and zoning activities and to continue the training,which for many of the Commissioners, started at the St.Cloud seminar. Specifically,Peter will focus on overlay districts,home occupations, and developing findings for the denial of requests. He will be able to answer any other questions you may have regarding actions at the last several meetings, and any legal questions you may have. • S:\PLANNING\Michele McPherson\PLREPRTS\5-13 legal training.doc Part 1 • Land Use and Zoning — Legal Review Planning Commission Meeting May 13, 2003 V. Adoption and Amendment of Land Use Controls A. Comprehensive Plans 1. Statutory Authority a) Municipal Land Planning Act,Minn. Stat. §462.351 to 462.365, §462.353, subd.1 b) Metropolitan Land Planning Act,Minn. Stat. §473.851 to 473.871; §473.858 c) County Planning Act,Minn. Stat.Chapter 394. 2. Purpose and Scope a) A comprehensive plan is a general plan to control and direct the use and development of land in a city or county. The purpose of a comprehensive plan is to analyze existing economic, social and environmental conditions,lay out the goals and policies that will guide future development,and provide the legal basis for land use controls. Comprehensive plans have been described as a strategic map to reach the community's vision of its future. • b) Municipalities within the Twin Cities metropolitan area are required by the Metropolitan Land Planning Act to prepare a comprehensive plan for Metropolitan Council review and approval.Minn. Stat. § 473.858. Outside of the Twin Cities metropolitan area, comprehensive plans and formal planning activities are not required. However, State law specifically encourages each county(Minn. Stat. §394.232, subd. 1) and each municipality(Minn. Stat. §462.3535, subd. 1)to prepare and implement a community-based comprehensive plan. A comprehensive plan should be adopted if a community intends to adopt and enforce a zoning ordinance. c) Minn. Stat. § 394.232, sub. 4 and§462.3535, subd 2 authorizes the preparation of regional comprehensive plans through the joint planning activities of contiguous counties, cities and/or towns; and mandates coordination with neighboring jurisdictions in the preparation of a plan. 3. Procedural Requirements. Minn. Stat. §462.355 and§ 394.232 set forth detailed procedural requirements for the preparation, adoption and amendment of comprehensive plans. In addition to these statutory requirements,it is recommended that cities and counties strive to achieve the greatest community involvement possible in the development of a comprehensive plan. 411 Land Use and Zoning-Legal Review Planning Commission Meeting May 13,2003 Page 2 • a) Initiation. The adoption or amendment of a comprehensive plan may be initiated by resolution of the governing body of the municipality or county,which is submitted to the city or county planning commission; or may be initiated by the planning commission itself by recommendation to the governing body. Affected property owners may also initiate a proposed comprehensive plan amendment. b) Elements of a comprehensive plan. Minn. Stat. § 473.859 sets forth in detail the elements of a comprehensive plan for metropolitan area communities. Minn. Stat. §462.357, subd 2(c) provides that in all other municipal comprehensive plans: (c)the land use plan must provide guidelines for the timing and sequence of the adoption of official controls to ensure planned, orderly and staged development and redevelopment consistent with the land use plan. c) Hearing. The planning commission is required to hold at least one public hearing on a proposed comprehensive plan or amendment thereto prior to adoption by the governing body of any such plan or amendment thereto. Notice of the time,place and purpose of the hearing must be published once in the official newspaper of the jurisdiction at least ten • days before the day of the hearing. Notice of a proposed county or regional plan must be provided to a number of state agencies, and coordination with surrounding counties and municipalities within the county is required. Minn. Stat. §894.232. d) Planning Commission Recommendation. The governing body of a city cannot adopt or amend a comprehensive plan until it has received the recommendation of the planning commission on the proposed plan or amendment thereto, or until sixty days have elapsed from the date the governing body proposed a plan or amendment to the planning commission. e) Voting Requirements. Adoption and amendment of a comprehensive plan by a municipality requires a favorable vote by two-thirds of all of the members of the governing body. f) State and Regional Approval. Municipalities located in the Twin Cities metropolitan area must submit all comprehensive plans and proposed amendments thereto to the Metropolitan Council for review and approval. Minn. Stat. §473.175 subd. 1. Counties must submit proposed county and regional plans to the State Office of Strategic and Long Range Planning for • review and approval. Minn. Stat. §394.232, Subd. 5. Land Use and Zoning-Legal Review Planning Commission Meeting May 13,2003 Page 3 • g) Plan Updates. County plans outside the metropolitan area are required to be updated at least every 10 years. Minn. Stat. §394.232, subd. 6. The comprehensive plans of all jurisdictions within the metropolitan area are also required to be reviewed and updated every 10 years. Minn. Stat. §473.864, subd 2. 4. Legal Impacts from the Adoption of a Comprehensive Plan. a) Consistency of Zoning Ordinance and Other Official Controls. Pursuant to Minn. Stat. §473.858, subd. 1,within the Twin Cities metropolitan area,if an adopted comprehensive plan is in conflict with an existing zoning ordinance,the zoning ordinance must be brought into conformance with the comprehensive plan. This section also prohibits local government from adopting any fiscal device or other official control which is in conflict with its comprehensive plan. Minnesota Statutes do not specifically mandate comprehensive plan and zoning ordinance consistency outside of the metropolitan area, and there are no cases holding that a zoning ordinance in a city outside the metropolitan area must be in conformance with an adopted comprehensive plan. However, comprehensive plan • consistency,or the lack thereof,is a legitimate issue with respect to any land use approval. A community which has brought its zoning ordinance and other official controls into conformance with its comprehensive plan will have the strongest case for supporting its land use decisions in the courts. b) In addition, once a comprehensive plan has been adopted, all acquisitions and disposition of real estate and any capital improvements proposed within a city must be reviewed by the planning commission to consider the consistency of the proposed action with the comprehensive plan. The planning commission has 45 days in which to make such determination or the proposed acquisition, disposition or capital expense will be deemed approved. Minn. Stat. §462.356. c) Standard for Judicial Review. Municipalities and counties act in their legislative capacity when adopting and amending comprehensive plans, and have the broadest discretion in doing so. Provided that the procedural requirements of the relevant statutes are met,courts will not interfere in decisions related to comprehensive plans unless they are shown to be arbitrary,confiscatory or discriminatory. Amcon Corp.v. City of Eagan, 348 N.W.2d 66 (Minn., 1984). Olsen v.City • of Hopkins, 276 Minn. 163, 149 N.W.2d 394 (1967). Land Use and Zoning-Legal Review Planning Commission Meeting May 13,2003 Page 4 • B. Zoning Ordinances 1. Statutory Authority. a) Minn. Stat. §462.357, subd. 1 (cities). b) Minn. Stat. §394.25 (counties). c) Minn. Stat. §394.33 authorizes towns to plan and zone, provided that no zoning ordinance or other official control may be inconsistent with or less restrictive than the applicable county controls. Town controls may,however, be more restrictive than country controls. 2. Purpose and Scope. Minnesota law authorizes the adoption of zoning ordinances for the general purpose of preserving and protecting the public health, safety,morals and general welfare. Zoning ordinances regulate the uses of property,the height,width and size of buildings and the amount of vacant space on lots in each zoning district. Zoning regulations are required to be uniform within each district,but may vary across different districts. The authority to adopt and amend a zoning ordinance includes the authority to adopt and amend both the text of the ordinance and the zoning map. 3. Procedure. The procedure for adopting municipal zoning ordinances is set forth in detail in Minn. Stat. §462.357, and is summarized below. Minn. Stat.Chapter 394 sets forth similar requirements for the adoption of county zoning ordinances. • a) Initiation. Any time after the adoption of a land use plan the planning commission of municipality,for the purpose of carrying out the policies and goals of the land use plan,may prepare a proposed zoning ordinance and submit it to the governing body with its recommendations for adoption. Minn. Stat. §462.357, Subd 2.Amendments to the zoning ordinance may be initiated by the governing body of the municipality,the planning commission, or by petition of affected property owners as defined in the zoning ordinance. An amendment not initiated by the planning commission must be referred to the planning commission for study and report,and may not be acted on by the governing body until it has received the recommendation of the planning commission or until 60 days have elapsed from the date of reference to the planning commission. Minn. Stat. §642.357, subd. 4. b) Hearing. After a new ordinance or amendment has been proposed,the planning commission must hold at least one public hearing. Notice of the time,place and purpose of the hearing must be published in the official newspaper of the municipality at least ten days prior to the date of the hearing. When an amendment involves changes in district boundaries • affecting an area of five acres or less, a similar notice must be Land Use and Zoning-Legal Review Planning Commission Meeting May 13,2003 Page 5 • mailed at least ten days before the date of the hearing to each owner of the affected property and all property situated wholly or partly within 350 feet of the property to which the amendment relates. However, failure to give mailed notice to individual property owners, or defects in the notice,will not invalidate the proceedings,provided a bona fide attempt to comply with the law is made. Minn. Stat. §462.357, subd. 3. c) Planning Commission Recommendation. Following the public hearing before the planning commission,the commission reviews the information received at the public hearing and presents its recommendations to the governing body. The governing body is not required to hold a public hearing on the proposed zoning ordinance amendment, but is not prohibited from doing so. d) Voting Requirements. Minn. Stat. §462.357, subd. 2(b), adopted in 2001,provides that the governing body may adopt and amend a zoning ordinance by a majority vote of all its members. The adoption or amendment of any ordinance which changes all or part of the existing classification of a zoning district from residential to either commercial or industrial requires a two-thirds majority vote of all members of the governing body. The opinion of the Attorney General • is that the voting requirement language adopted in 2001 is mandatory,and that this voting requirement may not be superceded by inconsistent charter provisions or ordinance requirements. A.G. Op. 59a-32. (Jan. 25, 2002). e) Publication. Following adoption,zoning ordinances and amendments thereto,including rezonings, become effective upon publication in the official newspaper of the city or county. 4. Limitations. Although a municipality or county has broad discretion in the adoption and amendment of zoning ordinances and maps, there are limitations. A municipality has no inherent power to enact zoning regulations. It receives its power to zone only by legislative grant of that authority by the State. Therefore,the municipality must strictly comply with the procedural requirements attached to the authority delegated to it by the State, and may not exceed the limitations imposed upon it by its enabling legislation. Costley v. Caromin House, Inc. 313 N.W.2d 21 (Minn., 1981); Denney v.City of Duluth,295 Minn.22, 202 N.W.2d 892 (1972); 2600 University Inn,LLC v.City of Minneapolis, 556 N.W.2d 218 (Minn.App., 1996). a) Compliance with Procedural Requirements. The courts have generally required strict compliance with procedural • requirements, such as the requirement of notice to adjoining Land Use and Zoning-Legal Review Planning Commission Meeting May 13,2003 Page 6 • landowners. See Olsen v. City of Hopkins, 276 Minn. 163, 149 N.W.2d 394 (1967); Glen Paul Court Neighborhood Association v.Paster, 437 N.W.2d 52 (Minn., 1989); Pilgrim v.City of Winona, 256 N.W.2d 266 (Minn., 1977). Strict compliance with the statutory voting requirements is also required. See A.G.Op. 59a-32. (Jan. 25, 2002). b) Statutory Limitations. Minnesota law contains a number of limitations on the exercise of the zoning power,including limitations with respect to manufactured housing, group homes, nonconforming uses and amortization (see below), and others. With respect to some uses, federal law imposes limitations on local zoning ordinances. Examples include the Federal Fair Housing Act and the Religious Land Use and Institutionalized Persons Act of 2000 ("RLUIPA"). RLUIPA provides that no government may impose or implement a land use regulation in a manner that imposes a substantial burden on the religious exercise of a person,unless the government can show the burden is in furtherance of a compelling government interest and is the least restrictive of furthering that interest. The first reported case to address the constitutionality of RLUIPA upheld the statute. Freedom Baptist Church of Delaware County v. Township of • Middletown, 204 F.Supp.2d 857 (E.D. Pa 2002). c) Constitutional Limitations. Zoning ordinances also may not violate the State or Federal Constitutions. Constitutional challenges typically involve the due process and takings clauses of the Constitution. (See discussion elsewhere in this manual.) d) Interpretation of Zoning Ordinances. Because zoning ordinances restrict landowners in the exercise of their common law right to lawfully use their property,zoning ordinances are strictly construed by the courts. Where doubt exists as to the intent of the enacting body,courts will interpret zoning ordinances to favor the landowner and disfavor any implied restriction on his property rights. Zoning ordinances are construed according to the plain and ordinary meaning of their terms;in favor of the property owner; and in light of the ordinances'underlying goals. See Olsen v.City of Hopkins, 276 Minn. 163, 149 N.W.2d 394 (1967);Frank's Nursery Sales, Inc.v.City of Roseville, 295 N.W.2d 604 (Minn., 1980). Therefore,it is important that zoning ordinances be clear and be adopted in strict compliance with the statutory requirements. • Land Use and Zoning—Legal Review Planning Commission Meeting May 13,2003 Page 7 II5. Standards for Judicial Review. a) Notwithstanding the limitations set forth above,local government has very broad discretion with respect to the adoption and amendment of zoning ordinances. The adoption of a zoning ordinance is a legislative act of local government. Courts will generally not interfere with the legislative discretion and policy decisions of a local governing body. Denny v.City of Duluth,295 Minn. 22, 202 N.W.2d 892 (1972); Sun Oil Co.v.Village of New Hope, 300 Minn. 326,220 N.W.2d 256 (1974). In determining the constitutionality of a zoning ordinance,the courts will presume that the governing body investigated and found conditions necessary for enactment of the proposed legislation,will presume that the legislation is constitutional, and will shift the burden of proving an ordinance unconstitutional to the party attacking its validity. If a zoning ordinance is not clearly unreasonable and arbitrary,is supported by a rational basis, and operates uniformly on all persons similarly situated, it will be upheld. Kiges v. City of St. Paul, 240 Minn. 522, 62 N.W.2d 363 (1953);City of St. Paul v. Dalsin,245 Minn. 325, 71 N.W.2d 855 (1955); Connor v.Chanhassen Tp„ 249 Minn. 205, 81 N.W.2d 789 • (1957). C. Rezoning. The authorization and procedures for acting on rezonings are identical to those set forth above for zoning ordinance adoption and amendments. Rezonings are also considered by the Minnesota courts to be a legislative act of the governing body,and therefore entitled to great deference from the courts. 1. Requests for Rezoning. The original classification of a property is presumed to be well planned and intended to be more or less permanent. The burden is therefore on the property owner seeking a rezoning to show either some mistake in the original zoning,or that the character of the neighborhood has changed to such an extent that no reasonable use can be made of the property in its current zoning classification. Honn v.City of Coon Rapids, 313 N.W.2d 409 (Minn., 1981). Even though there may be a significant change in the character of the neighborhood, such change in itself will not compel a rezoning absent probative evidence that no reasonable use can be made of the property in its current zoning classification. Sun Oil Co.v. Village of New Hope, 300 Minn. 326, 220 N.W.2d 256 (1974). The courts have held that the denial of a request for rezoning is a legislative act which must be upheld unless the existing classification is not supported by any rational basis related to the public health, safety or welfare. Kehr v.City of Roseville,426 N.W.2d 233 (Minn.App., 1988);Freundshuh v.City of Blaine, 385 N.W.2d 6 (Minn.,App. 1986); St.Croix II Land Use and Zoning-Legal Review Planning Commission Meeting May 13,2003 Page 8 • Development, Inc. v.City of Apple Valley,446 N.W.2d 392 (Minn. App., 1989). Although the burden on the landowner is high,in some circumstances the courts have found that there was no rational basis to support the denial of a proposed rezoning, and have ordered the rezoning approved. Communications Properties Inc. v. County of Steele, 506 N.W.2d 670 (Minn.App,. 1993). 2. Challenges to Rezoning Actions. On the other hand, a decision to rezone will be upheld unless opponents prove that the new classification is unsupported by any rational basis related to promoting public health, safety,morals or general welfare. Where a rational basis for the rezoning can be found in the record,the rezoning will be upheld. Krmpotich v.City of Duluth,474 N.W.2d 392 (Minn.App., 1991);Reversed on other grounds, 483 N.W.2d 55 (Minn., 1991). The usual presumption of the validity attached to zoning amendments as legislative acts applies. State, by Rochester Ass'n. of Neighborhoods v.City of Rochester, 268 N.W.2d 885 (Minn., 1978). 3. Spot Zoning. The term"Spot Zoning" is applied to rezonings, typically of small parcels of land,which establish a use classification inconsistent with surrounding uses,which create an island of non- conforming use within a larger zoned district, and which dramatically reduce the value of either the rezoned lot or the abutting property. • State,by Rochester Ass'n. of Neighborhoods v.City of Rochester, 268 N.W.2d 885 (Minn., 1978). Although the Minnesota Courts have found that spot zoning is preferential treatment,piecemeal zoning, and the antithesis of planned zoning(Amcon Corp.v.City of Eagan, 348 N.W.2d 66 (Minn., 1984));they have been very slow to invalidate a rezoning as a spot zoning,unless there is a total destruction or substantial diminution of the value of the property. Alexander v.City of Minneapolis, 267 Minn. 155, 125 N.W.2d 583. (1963). D. Public Hearing Procedure. The following suggestions for the conduct of public hearings in rezoning and other land use approvals are directed at those in the audience who are responsible for conducting public hearings on zoning issues. Although recommended for hearings on all types of zoning approvals, including the adoption and amendment of comprehensive plans and zoning ordinances,these considerations are particularly relevant to hearings on rezonings, and to hearings on conditional use permits,variances and other quasi-judicial and administrative actions. 1. Notice. Be sure that all statutory requirements for notice are met. 2. Keep a record. The governing body should assure that a complete transcript of the public hearing can be prepared,if needed, for court review. Video tapes, if available, should be preserved for contested land use applications at least until it is clear that there will be no judicial proceedings If video tapes are not available, consideration • should be given to having a court reporter transcribe the proceedings Land Use and Zoning-Legal Review Planning Commission Meeting May 13,2003 Page 9 1111 on contested land use applications. All documents relied on during the hearing should be kept by the municipality until final a decision is made and the time for appeal has run. 3. Testimony. All persons desiring to testify at the hearing should be allowed to do so, after providing their names and addresses for the record. Although there is no requirement that witnesses be sworn under oath or subject to formal cross examination,and this is not the practice in any community the speaker is aware of,the Minnesota Supreme Court has indicated there may be times when such a procedure may be preferred,if not required, as a matter of fairness. See Kletschka v. LeSueur County Bd.of Comm'rs.,277 N.W.2d 404 (Minn., 1979). 4. Rebuttal. Even if witnesses are not sworn or cross-examined, governing bodies should allow for informal questioning of witnesses. It is also important to allow the applicant sufficient time to respond to concerns and objections raised at the hearing. This may occur during the hearing or,if the applicant requests or agrees to extend the municipality's time for decision (see below), at a subsequent meeting. 5. Findings of Fact. Findings of fact should be prepared with respect to any contested land use matter,including legislative decisions such as requests for comprehensive plan or zoning ordinance amendments and rezonings. Findings of fact should be based on the evidence • presented at the hearing,and should be keyed to the statutory and ordinance requirements for the proposed land use approval. Findings may be prepared in advance of the hearing, but should be supplemented by specific action of the governing body as necessary to make them consistent with the testimony received at the hearing. The governing body may also continue the hearing to allow for the preparation of more detailed findings for consideration at a future date,provided that sufficient time remains for final action. 6. Publication. Zoning ordinance text amendments and rezonings are effective upon publication. E. 60 Day Rule 1. Minn. Stat. §15.99, commonly referred to as the "60 day Rule," provides, in subdivision 2, as follows: Except as otherwise provided in this section and notwithstanding any other law to the contrary,an agency must approve or deny within 60 days a written request relating to zoning. . . failure of an agency to deny a request within 60 days is approval of the request. If an agency denies the request,it must state in writing the reasons for the denial at the time that it denies the request. III Land Use and Zoning-Legal Review Planning Commission Meeting May 13,2003 Page I0 • 2. Section 15.99 goes on to set forth detailed requirements for compliance with the 60 day rule, and the courts have required strict adherence to these requirements. 3. Application. The 60 day time period does not begin until an application is complete. However, a determination that an application is incomplete must be made within 10 days of its submission, or the 60 day time period will begin regardless of the application's completeness. The applicant must be notified within the 10 day period (preferably in writing, although the statute does not specify in writing)that the application is incomplete and what information is missing. 4. Extension. The 60 day period may be extended for an additional 60 days, but only if written notice of the extension is provided to the applicant during the initial 60 days stating the reasons for the extension and its anticipated length. Strict compliance with the requirements of this section of the statute is necessary. Additional extensions are not available except with the applicant's approval. It is recommended that such approval be in written form and not be accepted unless a specific date or time period for the extension is agreed to by the applicant. See Northern States Power Co.v.City of Mendota Heights, 646 N.W.2d 919 (Minn.App.,2002). 5. Other approvals. The 60-day time period is extended if state law • requires a separate process to occur before the municipality may act on the application. For example,the 60 day period for a project that requires environmental review under the Minnesota Environmental Quality Board's environmental review program is extended until 60 days after the completion of the environmental review process. 6. The statute provides that failure to deny a request within 60 days is approval of the request. Failure of a motion to approve an application has been found by the courts not to be a denial. Therefore,if another motion is not made and adopted to deny the application,the application will be deemed approved by the statute. Manco of Fairmont, Inc. v.Town Bd. of Rock Dell Tp., 583 N.W.2d 293 (Minn.App., 1998);Demolition Landfill Services, LLC v.City of Duluth, 609 N.W.2d 278 (Minn.App.,2000). 7. The 60 day rule supercedes all other time limits in local zoning ordinances and in the Land Planning Acts. Therefore,local ordinances and procedures should be revised as necessary to insure that the 60 day rule is complied with. For example: • Periods for staff review,notice and hearing should be shortened so that final review can occur within the 60 days mandated by statute. • If the City's normal review procedure will not allow for completion of the process within 60 days,form letters should be 4111 sent to every applicant extending the 60 day period for up to an Land Use and Zoning—Legal Review Planning Commission Meeting May 13,2003 Page 11 • additional 60 days so that the city review process can be completed. It is not acceptable to require an applicant to consent to a 60 day extension as a condition of applying for the approval. American Tower,L.P.v. City of Grant, 636 N.W.2d 309 (Minn., 2001). However, a letter notifying the applicant of an extension and setting forth the reasons therefore may be sent at any time following receipt of the application and prior to the expiration of the initial 60 day review period. • When denial is recommended,proposed findings of fact should be set forth in staff reports and/or in a separate proposed resolution for adoption by the decision maker, so that the reasons for denial are set forth at the time a request is denied. • If there are no specific findings for denial set forth in the record, the review time should be extended so that formal findings of fact can be made and brought back for adoption prior to the expiration of the 60 day period or any extension thereof. VII. Special Issues A. Vested Rights. 1. Vested Right to Zoning. The Minnesota courts have consistently held that there can be no right, or vested right,to a specific zoning status. Olsen v.City of Hopkins, 288 Minn. 25, 178 N.W.2d 719 • (1970).Therefore, a zoning regulation may generally be applied retroactively to deny a building permit or site plan, even though the application for the building permit or site plan was made prior to the effective date of the new or amended regulation. Rose Cliff Landscape Nursery Inc.v.City of Rosemount,467 N.W. 2d 641 (Minn.App., 1991);Property Research and Development Co.v.City of Eagan, 289 N.W.2d 157 Minn.,( 1980). 2. Vested Right to Use. The point at which a developer or property owner has an absolute right to proceed with the development of property for a specific use has been the subject of considerable litigation throughout the country and within the State of Minnesota. In most cases,the Minnesota courts have found no right to a use that has not been fully established. For example,in Kiges v.City of St. Paul, 240 Minn. 522, 62 N.W.2d 363 (1953),the Supreme Court found that obtaining a building permit,incurring obligations and expenses preliminary to actual construction, and the completion of surface preparation and excavation did not create a vested right which precluded the application of new zoning regulations prohibiting the proposed building. The court held that there would be no right to proceed unless the work done prior to enactment of the regulation was sufficient to constitute an actual existing structure above ground. This rule has been followed in most of the • subsequent cases, including Wermager v.Cormorant Tp. Bd.,716 Land Use and Zoning—Legal Review Planning Commission Meeting May 13,2003 Page 12 • F.2d 1211 (8th Cir.,1983),which held that a landowner does not have a vested right to develop property in accordance with the laws that existed prior to a change in the zoning regulation if the landowner has not progressed sufficiently with construction. In that case,the landowner had constructed a sewer system for the proposed use, but had not begun physical construction of the structure. See also, Ridgewood Development Co.v. State,294 N.W.2d 288 (Minn., 1980). The courts have not fixed a definite percentage of the total cost which establishes a vested right to complete and establish a use, but have held that it depends on the type of project,its location,ultimate costs, and the extent to which the use is in conformity with the zoning regulations. Jasaka Co.v.City of St.Paul, 309 N.W.2d 40 (Minn., 1981). See also Stotts v.Wright County,478 N.W.2d 802 (Minn.App., 1991). However,most of the cases do recognize that there is a point at which,if the property owner or developer has proceeded in reliance on the existing zoning,they are entitled to complete the development and establish the use. See Olsen v.City of Minneapolis, 263 Minn. 1, 115 N.W.2d 734 (1962);Jasaka Co.v.City of St. Paul, 309 N.W.2d 40 (Minn., 1981);City of St. Paul v.Rein Recreation Inc. ,298 N.W.2d 46 (Minn., 1980). More recently,the Supreme Court has warned zoning authorities that they do not have III "carte blanche" to arbitrarily block otherwise lawful development by the passage of new zoning law. Interstate Power Co., Inc.v.Nobles County Bd. of Comm'rs., 617 N.W.2d 566 (Minn.,2000). In that case the court noted that application of the new zoning requirement would result in a "manifest injustice" that warrants deviation from the usual rule of applying the law as amended. 3. Estoppel. Related to the concept of vested rights is the theory that government can be estopped from enforcing its building and zoning ordinances in certain circumstances. The central concept to the doctrine of equitable estoppel is inducement. The claim in these cases is that the zoning authority should be estopped from preventing a developer or landowner from proceeding with an activity that the zoning authority induced, for instance, by issuing a building permit. The general rule is that issuance of a building permit under a zoning ordinance falls within the governmental rather than the proprietary functions of a municipality,and that estoppel will not lay against a municipality for its actions performed in a governmental capacity. Kiges v.City of St. Paul, 240 Minn. 522, 62N.W.2d 363 (1953); Frank's Nursery Sales, Inc.v.City of Roseville, 295 N.W.2d 604 (Minn., 1980);Ridgewood Development Co.v. State, 294 N.W.2d 288 (Minn., 1980);Dege v. City of Maplewood, 416 N.W.2d 854 (Minn.App., 1987). However,in certain circumstances a vested IIIright may be established under an invalid building permit. See Snyder Land Use and Zoning-Legal Review Planning Commission Meeting May 13,2003 Page 13 • v.City of Minneapolis, 441 N.W.2d 781 (Minn., 1989). The fact that a city has previously granted other permits in conflict with the terms of its zoning ordinances will also generally not estop the city in subsequent cases from denying similar permits.Arcadia Development Corp.v.City of Bloomington, 267 Minn. 221, 125 N.W.2d 846 (1964). 4. Nonconforming uses. Nonconforming uses are uses that were legally in effect prior to the adoption or amendment of a zoning ordinance and,in recognition of the landowner's property rights, are allowed to continue even though such uses are subsequently prohibited. The reason for identifying nonconforming uses in a zoning ordinance is to secure the gradual or eventual elimination of nonconforming uses. Besides being allowed to remain in effect,nonconforming uses also escape requirements subsequently enacted, such as setback requirements. Although these uses must be allowed to continue, zoning ordinances may prohibit them from being expanded or rebuilt,which places restrictions and limitations on their ability to exist over time and makes their eventual elimination more likely. Prior to 2001,municipalities had some flexibility in how they regulated non-conforming uses.However,the 2001 legislature adopted Minn. Stat. S463.357, Subd. 1(e),which specifically governs non-conforming uses and preempts local zoning ordinances with • respect thereto. The statute provides as follows: Any non-conformity,including the lawful use or occupation of land or premises existing at the time of the adoption of an additional control under this chapter,may be continued,including through repair or maintenance, but if the non-conformity or occupancy is discontinued for a period of more than one year, or any non-conforming use is destroyed by fire or other peril to the extent of greater than 50% of its market value,any subsequent use or occupancy of the land or premises shall be a conforming use or occupancy.A municipality may by ordinance impose upon non-conformities reasonable regulations to prevent and abate nuisances and to protect the public health,welfare,or safety. This subdivision does not prohibit a municipality from enforcing an ordinance that applies to adults-only bookstores, adults-only theaters, or similar adults-only businesses as defined by ordinance. This statutes supercedes local zoning ordinances which are inconsistent therewith. Therefore,it is recommended that local ordinances be amended to comply with this legislation. • Land Use and Zoning—Legal Review Planning Commission Meeting May 13,2003 Page 14 • The Court of Appeals has held that in determining whether a non- conformed building or structure has been destroyed to an extent of 50% or more of its market value, a reviewing authority must consider the market value of the entire non-conforming use. Buss v.Johnson, 624 N.W.2d 781 (Minn.App.,2001). 5. Amortization. Prior to 2001, zoning ordinances often established an amortization period for pre-existing,non-conforming uses. These ordinances typically provided that at the expiration of the amortization period the use must cease. Courts typically upheld such amortization periods,holding that the adoption of an ordinance establishing an amortization period is a legislative act to which the courts should afford great deference,even when the amortization period was as short as two years. See AVR Inc. v.City of St. Louis Park, 585 N.W.2d 411 (Minn.App., 1998). However,the 2001 Legislature also addressed the issue of amortization,enacting Minn. Stat. §462.357, Subd. 1(c),which provides as follows: Except as otherwise provided in this subdivision, a municipality must not enact, amend or enforce an ordinance providing for the elimination or termination of a use by amortization which use was lawful at the time of its inception. This subdivision 411 does not apply to adults-only bookstores, adults-only theaters, or similar adults-only businesses, as defined by ordinance. This statute also supercedes local zoning ordinances, and prohibits local government from amortizing out non-conforming uses, except those uses specified in the last sentence of the ordinance. B. Moratoria. 1. Authorization.Minn. Stat. §462.355 Subd. 4. Specifically authorizes the adoption of Moratoria,defined in the statute as "interim ordinances", as follows: If a municipality is conducting studies or has authorized a study to be conducted or has held or has scheduled a hearing for the purpose of considering adoption or amendment of a comprehensive plan or official controls as defined in Section 462.352. Subdivision 15, or if new territory for which plans or controls have not been adopted is annexed to a municipality,the governing body of the municipality may adopt an interim ordinance applicable to all or part of its jurisdiction for the purpose of protecting the planning process and the health, safety and welfare of its citizens. The interim ordinance may • regulate, restrict or prohibit any use, development, or Land Use and Zoning-Legal Review Planning Commission Meeting May 13,2003 Page 15 • subdivision within the jurisdiction or a portion thereof for a period not to exceed one year from the date it is effective, and may be extended for such additional periods as the municipality may deem appropriate,not exceed a total additional period of 18 months. No interim ordinance may halt,delay or impede a subdivision which has been given preliminary approval prior to the effective date of the interim ordinance. 2. Adoption. Although the statute talks about an "interim ordinance", the Minnesota courts have allowed moratoria to be adopted by less formal approaches, including resolutions and even internal municipal communications. Wedemeyer v.City of Minneapolis, 540 N.W.2d 539 (Minn.App. 1995). Even when characterized by the governing body as a"moratorium ordinance",the courts have not required that the requirements for adoption of a zoning ordinance be followed for the adoption of a moratorium. Duncanson v. Board of Supervisors of Danville Tp., 551 N.W.2d 248 (Minn.App., 1996). 3. Validity. The Minnesota courts have allowed local government broad discretion in the adoption of moratoria. Both the Minnesota courts and the Federal courts have found that ordinances which do not allow for any use of a property for the moratorium period are not • constitutionally compensable takings. Woodbury Place Partners v. City of Woodbury,492 N.W.2d 258 (Minn.App., 1992);Tahoe-Sierra Preservation Council, Inc.v.Tahoe Regional Planning Agency, 122 S.Ct. 1465, 152 L.Ed.2d 517 (2002). Although Minnesota municipalities have broad authority to enact moratoria,that authority is not unlimited. The municipality must exercise its authority for the purpose of protecting the planning process and may not arbitrarily enact an interim moratorium ordinance to delay or prevent a single project. Medical Services, Inc.v.City of Savage, 487 N.W.2d 263 (Minn.App., 1992);City of Crystal v. Fantasy House, Inc., 569 N.W.2d 225 (Minn.App., 1997). C. Exclusionary Zoning. 1. "Exclusionary Zoning" refers to the array of local zoning practices which, singly or in combination,results in the exclusion of housing for low and moderate income groups from the suburban communities where most of the growth in employment opportunities has occurred in the past several decades. Exclusionary zoning practices and devices include such things as: exclusion of multiple family dwellings;restrictions on the number of bedrooms in multiple family dwellings; exclusion of mobile homes; and minimum building and lot size requirements. Large lot zoning,in particular,has been found to have an impact on housing costs. • Land Use and Zoning-Legal Review Planning Commission Meeting May 13,2003 Page 16 • There has been considerable debate in the last three decades over the definition and existence of exclusionary zoning;the wisdom of pursuing the social goal of opening up suburbs for lower income housing through zoning policy; and the role of the courts in this debate. In 1975,the New Jersey Supreme Court decided the case of Southern Burlington County N.A.A.C.P.v.Mount Laurel Tp., 67 N.J.151, 336 A.2d 713, (1975). In this case,the court held that the township of Mount Laurel must, by its land use regulations,make realistically possible the opportunity for an appropriate variety of choice and housing for all categories of people who may desire to live there, including those of low and moderate income. The court required the township to permit multi-family housing,without bedroom or similar restrictions, as well as small dwellings on very small lots and other types of high density housing without artificial or unjustifiable minimum requirements as to lot size, building size and the like. In spite of rapidly rising housing costs in the Twin Cities Metropolitan Area,the Minnesota courts have not been called upon to specifically address an alleged exclusionary zoning situation. However,the Minnesota legislature has enacted a number of initiatives to address the issues raised by courts in other jurisdictions in exclusionary zoning cases,including efforts to promote affordable • housing through the Minnesota Livable Communities Act and through various amendments to the Land Planning Acts intended to make it easier to obtain approval for affordable housing, such as the removal of the super majority voting requirement for zoning decisions. D. Contract Zoning and Conditional Zoning 1. Generally. "Contract Zoning" is generally described as an agreement between a municipality and a landowner which includes a promise by the city to rezone land in accordance with the terms of the contract and a promise by the owner or developer to observe restrictions on the use of the land in consideration of the rezoning. Historically, such agreements have been found to be an illegal delegation or abrogation of the police power and invalid. However,in more recent years, courts have been more open to such agreements,particularly in the planned unit development context. "Conditional Zoning", on the other hand,has found more favor with the courts. Conditional zoning is where land is zoned, or rezoned, on condition that the landowner or developer comply with certain conditions, such as the completion of specified work on the land to be rezoned,payment of fees, etc. The concepts of contract zoning and conditional zoning have received very little mention in Minnesota judicial decisions.Where • the issue has arisen at all,the courts have seemed to implicitly Land Use and Zoning-Legal Review Planning Commission Meeting May 13,2003 Page 17 • validate the potential contract or conditional zoning. See City of Mahtomedi v. Spychalla,243 N.W.2d 31 (Minn., 1976);Housing and Redevelopment Authority for Lincoln County v.Jorgenson, 328 N.W.2d 740 (Minn., 1983). The Minnesota courts have not reversed or invalidated a local government zoning action by finding it an illegal contract or conditional zoning. Furthermore,the Attorney General has issued an opinion concluding that the amendment of a zoning ordinance conditioned upon the successful annexation of land lying outside the corporate limits of the city is valid. (Op.,A.G. 59-a-32, October 8, 1970). 2.Planned Unit Developments. Although Minnesota law does not expressly authorize Planned Unit Development ("PUD") Agreements,Minn. Stat. §462.3593 does authorize the approval of PUDs as conditional uses, and Minn. Stat. §462.358, subd. 2(a) and 3(c) authorize municipalities to enter into development agreements, including agreements which provide for "planned and staged development". The courts have also acknowledged the validity of PUDs as conditional uses or overlay zones, and there is little doubt PUDs are a valid planning tool in Minnesota. • GP:930289 vl III Part 2 CITY OF ELK RIVER • PLANNING COMMISSION Work Session May 13,2003 Legal Framework for Planning and Zoning Issues Peter Beck, City Attorney I. MAJOR LAWS A. Federal Laws 1. U.S. Constitution a. Takings b. Due Process c. Equal Protection 2. U.S. Code a. 42 U.S.C. §1983 —liability for violation of Constitutional rights b. 42 U.S.C. § 1988—attorneys' fees • B. Minnesota Laws 1. Minnesota Constitution 2. Minnesota Statutes Chapter 412 a. General municipal powers 3. Minnesota Statutes Chapter 462 a. Planning, zoning and subdivision authority 4. Minnesota Statutes Chapter 469 a. Economic development authority, housing and redevelopment authority,tax increment financing, etc. C. Local Ordinances 1. Zoning Ordinance 2. Subdivision Ordinance 0 • II. BASIC LEGAL PRINCIPALS A. The city is a creature of state law. 1. No reference to municipal government in federal constitution. B. The city has only those powers specifically conferred upon it by the state. 1. If a specific power is not granted by state law, it does not exist. For example: amortization. State has determined that cities do not have the power to amortize out uses. 2. The city cannot regulate in areas pre-empted by the state or federal governments. For example: Telecommunications facilities. Federal government has put limits on local regulations (i.e. may not prohibit or discriminate between providers). C. The city's exercise of its statutory powers must be consistent with the state and federal constitutions and statutes. 1. Takings a. A zoning ordinance which results in no reasonable or remaining economic use of land is a taking. b. However, "reasonable use"is not the highest, best or most • profitable use. 2. Due Process a. The city must provide a fair hearing, including notice and the opportunity to be heard. b. Decisions must be based upon the record before the city. c. Decisions should be supported by contemporaneous findings or reasons for the decision. d. Decisions should be made by the elected representatives, not by the public. Neighborhood opposition alone is not a sufficient basis to deny a zoning request. 3. Equal Protection a. Zoning regulations must be uniform for each class or kind of use throughout each zoning district. b. Similarly situated properties must be treated alike. 4. 60 Day Rule a. State law(Minn. Stat. § 15.99) requires zoning actions be taken within 60 days. b. City can extend for an additional 60 days for any reason, but must provide written notice and state a reason. • 2 • i. Cannot provide for automatic extension on application form c. State laws have been strictly applied against cities by the courts. i. Strict compliance is necessary. d. Extensions. i. Tollefson case. D. The city's discretion in the exercise of its powers depends on the nature of the power being exercised. 1. Police power a. The power to protect the public health, safety and general welfare. b. A broad power, as to which the City has broad discretion, within constitutional limits. c. The city acts under its police power in the administration and enforcement of zoning and subdivision ordinances. 2. Legislative power a. The power to adopt ordinances. b. The city has broad discretion in the exercise of its legislative power, subject to: • 1. Constitutional limitations ii. Statutory authority c. The approval of comprehensive plans and the adoption and amendment of zoning ordinances are legislative acts. Some cases say that actions on variances are also legislative. 3. Administrative/quasi-judicial powers a. The power to make specific decisions in applying the terms of adopted ordinances. b. The amount of discretion in exercising quasi-judicial powers varies, depending on the ordinance being enforced. Examples: Building code/building permit issues; little discretion. Conditional use permits;more discretion. Variances; more discretion. E. The city must keep an adequate record of its proceedings. 1. Judicial review is on the local record if the record is clear, complete and the municipal proceeding was fair. 110 3 • 2. The record should include all evidence and findings in support of the City's decision. III. SPECIFIC PLANNING AND ZONING ISSUES A. Planning—Minnesota Statutes Section 462.353-356 1. Authority to plan; establish a planning commission; establish a board of adjustments and appeals. a. The adoption or amendment of a comprehensive plan (including land use plan amendments)requires a two-thirds vote of the City Council following Planning Commission review. b. The adoption of a comprehensive plan is a legislative act as to which the Council has broad discretion. i. However,this discretion is limited to the specific statutory authority granted, and subject to constitutional limits. 2. Implementation Plan a. Moratoria i. Minnesota Statutes authorizes moratoria to protect the planning process • "If a municipality is conducting studies or has authorized a study to be conducted or has held or has scheduled a hearing for the purpose of considering adoption or amendment of a comprehensive plan or official control ..." ii. Moratoria cannot be adopted simply to stop a specific project b. Ordinance Amendments and Consistency with the Comprehensive Plan i. Consistency with the comprehensive plan is not required by statute outside of the metropolitan area, but should be the goal to ensure both the comprehensive plan and the zoning ordinance, and decisions made under them, are enforceable. B. Zoning—Minnesota Statutes Section 462.357 1. Authority to adopt, enforce and amend zoning ordinances • 4 a. Zoning ordinances (except some rezonings) are adopted IIIand amended by majority vote of the City Council, following Planning Commission review. 2. Required to have a zoning ordinance text and a zoning map. 3. Zoning regulations are required to be uniform within each zoning district. 4. The adoption and amendment of a Zoning Ordinance are legislative acts, as to which the Council has broad discretion. a. Zoning decisions will be upheld by the courts if there is a "rational basis" for the decision. b. However, this discretion is limited to the specific statutory authority granted, and subject to constitutional limits. i. zoning decisions cannot be arbitrary, capricious or unreasonable. C. Rezoning—Minnesota Statutes Section 462.357 1. Authority to rezone property. a. Requires approval of the City Council following Planning Commission review. b. City Council approval is by majority vote,unless a property is rezoned from residential to commercial or industrial, when a two-thirds vote is required. ID i. PUD amendments. 2. Rezoning property is amending the zoning map and therefore a legislative decision as to which the Council has broad discretion. a. However, this discretion is limited to the specific statutory authority granted, and subject to constitutional limits. D. Planned Unit Developments 1. In Elk River A Zoning District a. Rezoning to PUD District requires i. Concept plan including generalized land uses, required for PUD zoning. b. CUP required for PUD approval i. Must be consistent with concept plan approved with the PUD zoning. c. PUD must be consistent with Comprehensive Plan and land use map. 2. Purposes a. Creative development b. Design flexibility • 5 3. Issues • a. PUD zoning is legislative decision—broad discretion. PUD approval by CUP—less discretion. Important to address critical issues at time of rezoning into PUD Zone (i.e. uses, densities, etc.) E. Overlay Zoning District 1. State Mandated a. Flood plain b. Shoreland c. Wild and scenic view 2. Elk River a. Solid waste facility b. Mineral excavation c. Heritage preservation site d. Antenna tower 3. Purposes a. Comply with state law. b. Provide for maximum regulation of certain uses i. Legislative act 110 ii. supermajority vote c. Regulate "interim"uses while maintaining underlying "permanent"land use and zoning designation. d. Provide a means for certain unique uses to be located anywhere, subject to City Council discretion, without restrictive existing or other uses of the land. F. Permitted Uses/Site Plan Reviews 1. A permitted use is a use that may be lawfully established if it conforms to the specified regulatory standards. 2. The City's review of a permitted use is limited to determining whether the proposed use complies with the applicable standards. 3. Site plan review of a permitted use cannot be denied for reasons related to the use—only if the site plan does not comply with standards. a. Cannot be denied because inconsistent with existing land uses in the area. b. Cannot be denied because inconsistent with general statements of purpose in the zoning ordinance. • 6 4. Home occupations. • a. Must be permitted if they meet the standards of a permitted use. G. Conditional Uses—Minnesota Statutes Section 462.3595 1. Conditional uses are uses which are permitted, subject to specific conditions designed to ensure that performance standards are met. a. The standards must be identified in the zoning ordinance. 2. The Council acts in a quasi-judicial capacity when acting on conditional use permits and therefore has limited discretion to deny. a. There is generally a right to the use if the conditions set forth in the ordinance are met. b. There must be"legally sufficient"reason for denial; and a "factual basis"to support that reason. i. For example, a finding that a proposed use does not meet a city standard or requirement for approval is a legally sufficient reason to deny the CUP,but only if there is a factual basis to support that finding. ii. A finding that the use is inappropriate in this location is not a legally sufficient reason for denial, • because the ordinance identifies the use as allowable if it meets the applicable standards. There must be a finding that the use does not meet the standards. 3. Planning Commission reviews conditional use permit requests and makes recommendation to City Council. 4. Conditional Use Permits are permanent and run with the land. they cannot have a expiration date or be limited of a particular individual or entity. 5. Home Occupations. a. Home occupations which require a CUP because they do not meet the standards for approval as a permitted use must be evaluated against the standards for approval of a CUP. They are a conditional use and like all conditional uses cannot be denied because of the use, only if the standards for establishing that use are not met. • 7 • H. Interim Uses—Minnesota Statutes Section 462.3597 1. Allows the temporary use of property until a particular date or event. a. So-called"temporary conditional use". 2. Use must otherwise conform with the zoning ordinance. Variances—Minnesota Statutes Section 462.357, Subd. 6(2) 1. City may allow a variance from strict requirements of zoning ordinance. a. Statute requires"undue hardship" i. property cannot be put to a reasonable use. ii. unique circumstances not created by the landowner. iii. will not alter essential character of the locality. iv. economic considerations alone do not constitute undue hardship. 2. "Use"variances are prohibited a. May not permit as a variance a use that is not allowed in the zone. • 3. The Council acts in a legislative capacity when deciding on variances because the terms of the legislation(ordinance) are being varied. a. There is very seldom a"right"to a variance. b. "arbitrary"nature of standard sought to be varied is not enough to establish a right to the variance. 4. Consistency in the approval or denial of variances. a. The courts have stated that the mere fact a similar variance was granted earlier does not establish a right to a variance. b. However,the arbitrary and capricious standard still applies. There must be some rational basis for the decision. 5. Requests for variances are heard by the Board of Adjustments (Planning Commission) and may be appealed to the City Council. J. Appeals—Minnesota Statutes §462.357, Subd. (6)(1) 1. Property owners may appeal from a decision or interpretation of the Zoning Administrator. a. Appeal is heard first by Board of Adjustments (Planning Commission). • 8 2. Zoning Ordinance must be interpreted in favor of property owner • when ambiguous. K. Subdivision Approvals–Minnesota Statutes Section 462.358 1. Subdivision statute provides authority for requiring dedication of land for parks, roads, etc. a. There must be nexus between dedication requirement and impacts of the subdivision. b. There must be a"rational basis" for the dedication requirements. 2. City has 120 days to act on a preliminary plat. 3. Preliminary plat approval is valid for one year; final plat approval is valid for two years. 4. Variance standard is"unusual hardship." This is less than the normal variance standard. 5. Council acts in a quasi-judicial capacity when reviewing plats. a. City generally must approve a subdivision or plat which fully complies with the requirements of the zoning and • subdivision ordinances. b. City's role is limited to determining if the subdivision complies with the clear and objective standards of the subdivision ordinance. c. Subdivision approval may not be denied in reliance on general statements of purpose in the subdivision ordinance; and may not be denied because of the proposed use, if that use is allowed in the zoning district. 6. Planning Commission conducts initial review of subdivisions; final approval is by City Council. L Process and Findings 1. Strict compliance with prescribed statutory procedures and notice requirements is important—especially the 60-day law. 2. The adoption of contemporaneous findings will make it much easier to sustain City decisions. a. Litigation concerns.. b. Consider preparation of proposed findings with staff reports.. 4111 9 M. Enforcement • 1. Enforcement of zoning ordinance requirements. 2. Enforcement of conditions of specific approvals. a. CUPs b. Landscape requirements 3. Enforcement tools. a. Escrows b. Revocation of approvals. i. conditional use permits b. Criminal action. i. citation ii. complaints c. Civil action. d. Hazardous buildings. GP:1458142 vl • • 10