TG DEVELOPMENT LLC V CHARTER TWP OF MT MORRIS
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STATE OF MICHIGAN
COURT OF APPEALS
TG DEVELOPMENT, L.L.C., and TOBIN
GROUP,
UNPUBLISHED
March 25, 2004
Plaintiffs-Appellants,
v
No. 243019
Genesee Circuit Court
LC No. 98-063122-CZ
CHARTER TOWNSHIP OF MT. MORRIS,
Defendant-Appellee.
Before: Kelly, P.J., and Murphy and Neff, JJ.
PER CURIAM.
Plaintiffs appeal as of right from a directed verdict, more aptly coined an involuntary
dismissal, granted in favor of defendant in this action involving plaintiffs’ attempt to develop
property through the construction of an apartment complex. Defendant township refused to
rezone the property, seventy-two acres of vacant farmland, from residential-agricultural (RA) to
multi-family residential (R-3), which would have resulted in the property being zoned in a
manner consistent with the construction of an apartment complex. Plaintiff1 filed suit,
challenging the constitutionality of the township’s RA zoning classification under its ordinance,
as applied to plaintiff’s property, on taking, due process, and equal protection grounds. Plaintiff
also sought monetary damages for the alleged constitutional violations. The case proceeded to
trial before a jury, with the trial court to determine whether there was a constitutional violation
1
Plaintiff TG Development originally executed a sales agreement in December 1997 to purchase
the property at issue from CPC, Inc.; however, the sale was contingent on TG obtaining
governmental approval of its proposed site plan. In May 1998, TG and CPC filed suit after a
rezoning request was denied. In June 1999, plaintiff Tobin Group purchased the property
outright and closed on the transaction, after TG had assigned to Tobin its interest in the purchase
agreement. The Tobin Group joined in the litigation. TG Development and the Tobin Group are
comprised of five siblings who play various roles in both companies. The companies are
involved in real estate development. Pursuant to a motion for involuntary dismissal during trial,
TG’s action was dismissed for lack of standing, and the ruling is not challenged on appeal. In
light of these circumstances, and because there is only one actual owner, the Tobin Group, we
shall make reference to a singular “plaintiff” for purposes of this opinion.
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and the jury to determine the amount of damages if the court indeed found a constitutional
violation. The trial court directed a verdict in the township’s favor after finding that plaintiff
failed to establish a violation of its constitutional rights, failed to show that the township’s
actions were not supported by competent, material, and substantial evidence, and failed to
establish that the action was ripe. We affirm.
I. BASIC FACTS and PROCEDURAL HISTORY
A. Rezoning Request – Planning Commission
In January 1998, TG Development submitted a request to the township planning
commission to rezone the seventy-two acre parcel from RA to R-3. The stated reason for the
rezoning request was “to develop apt. development.” And the application indicated that TG
hoped to commence construction in September of 1998. Minutes from a February 2, 1998,
planning commission meeting reflect that Michael Tobin, on behalf of TG, spoke to the
commission with respect to the rezoning request. Mr. Tobin informed the commission that TG
sought to develop the subject property by having apartments with one-car garages constructed.
The apartments were to be designed in a manner consistent with the appearance of
condominiums. Tobin further informed the commission that rent would be approximately $700 a
month, and the apartment complex would not be low-income housing. He also submitted
photographs of other TG apartment projects. The matter was scheduled for a public hearing.
On March 2, 1998, a public hearing was held on the rezoning request. Review of the
minutes indicates that Mr. Tobin was once again present and divulged additional information
about the proposed apartment complex. Tobin stated that the apartments would be similar to
condominiums to the north and east of the site, and that each building on the site would have
twelve apartment units with eight of the units having two bedrooms and measuring 1,100 square
feet. Two of the twelve units would have three bedrooms.2 Tobin insisted that the apartments
would not be subsidized and that the rental cost would be between $700 and $750 per month.
Tobin further indicated that outside lights would be controlled by an electrical eye, that each unit
would be front-to-back, that some units would have a second story, that there would be
streetlights and sidewalks, that there would be three parking spaces for each unit, that the
complex would have a pool and clubhouse, and that possibly a lake would be placed in the
middle of the development to serve as a detention pond. Tobin was currently unsure how many
total units would be constructed because engineering studies were yet to be completed in regard
to topography and wetlands.3 Tobin stated that TG owned and managed numerous apartment
developments and wished to own and manage this proposed development. When questioned
about roadway access for the property, Tobin indicated that Eastman Drive would provide
2
Tobin’s testimony at trial indicated that the other two units in the building would be onebedroom apartments.
3
The evidence presented at trial established that the complex, under the R-3 classification, could
contain a maximum of 898 total units.
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ingress and egress for the property. He submitted floor plans of the units to be constructed and
photographs of other development projects.
A number of individuals spoke out against the proposed development, including several
persons from an adjacent retirement community (Innisbrook Subdivision), which was accessed
solely by Eastman Drive.4 The protesters asserted that the development would not be compatible
with the retirement community, property values would drop, and there would be added traffic
that would be detrimental to the community. A spokesperson for the retirement community,
who submitted a petition from community residents requesting denial of the rezoning
application, told the commission that Eastman Drive would not be able to handle the increased
traffic flow, thereby creating a dangerous situation especially where many of the elderly
residents of the subdivision walked regularly. There were also concerns about interruptions in
the quiet nature of the retirement community. A resident of Eastman Drive indicated that the
subdivision consisted of eighty-two townhouses with a majority of the homes having two cars.
The planning commission formally recommended denial of the rezoning request on the
following bases: poor traffic pattern; one egress for all traffic; objections and concerns from the
residents; and poor pattern for emergency vehicles.
B. Rezoning Request – Township Board
On March 9, 1998, a regular hearing of the township board was held, and the board
considered the rezoning request. The township board, referencing the reasons given by the
planning commission for recommending denial of the request, concurred with the
recommendation of the commission and rejected the rezoning application.
C. Matters Presented to the Zoning Board of Appeals
TG Development proceeded to take the matter to the township zoning board of appeals
(ZBA) for hearing on May 6, 1998. The minutes of the ZBA public meeting on the rezoning
issue indicate that TG sought to overturn the actions of the township planning commission and
board and sought a use variance. Counsel for the township opined that the ZBA did not have the
authority under the zoning enabling act to grant the requested use variance. Counsel further
stated that, as to the appeal facet of TG’s argument, no additional evidence would be taken, but
evidence could at least be received regarding a variance. The minutes additionally reflect:
Mr. Sumnick [counsel for TG] stated his client’s proposal is reasonable
and it fits within the uses already designated for property in the particular area.
His client has done nothing to make the property unique in that there is only one
means of access to the property.
4
Pierson Road was the main road in the area and Eastman Drive extended south off of Pierson
and provided the sole ingress and egress to the retirement community subdivision. Plaintiff
sought to have Eastman Drive extended to also provide ingress and egress to the proposed
development.
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Mr. Sumnick stated they are prepared to show that the use proposed for
the property is reasonable and it complies with the master plan usage for the
property that is high density residential. Also, it would be an addition to the
community and that it would not have a negative impact.
TG submitted some photographs, floor plans, and a development plan, and Mr. Tobin
again discussed features of the proposed development. When Tobin and Sumnick were asked
whether the property could be developed within the RA classification, Sumnick responded “that
a limited development could occur, but they would have to access the project through the single
means of egress and ingress, and it would still be faced with the same flaw.”
The ZBA denied the request for a use variance on the basis of the township attorney’s
opinion that the ZBA was not vested with the authority to grant a use variance, and, even if the
authority existed, the ZBA concluded that a variance should not be granted. With respect to the
rezoning challenge, the ZBA noted that its review must be based on the record created before the
planning commission and township board. The ZBA affirmed the decisions of the planning
commission and township board “for the reasons stated in the minutes of those meetings[.]”
D. Circuit Court Complaint
On May 29, 1998, TG and CPC filed suit against the township, alleging that the property
is vacant, unimproved land that had been for sale for twenty years without results. It was further
alleged that the current status of the property had no economically feasible potential for
development because of the property’s location and configuration, that the township adopted a
master plan which sought to promote the systematic growth and development of township land,
and that some township representatives had previously informed TG that the property was
suitable for development as an R-3 zoned property. TG and CPC additionally alleged that the
development was consistent with the township’s master plan, and that the proposed use “is
located in a high density area designated to accommodate approximately 13 units per acre.”
Moreover, the township had no evidence of the existence of any market demand for the property
under the RA classification, nor was there any evidence that there would be a market demand for
the property in the future as an RA zoned parcel.
Count I of the complaint asserted that the township acted in an arbitrary and capricious
manner in restricting the zoning to RA, and that the classification did not advance or promote
any legitimate, reasonable governmental interest, nor would a rezoning of the property to R-3
detrimentally affect the public health, safety, and welfare. The count alleged that an R-3 zoning
classification was the only reasonable classification for the property, and that the township
committed substantive due process and equal protection violations in regard to the zoning of the
property.
Count II of the complaint alleged that the RA zoning classification was so
burdensome as to amount to a taking without just compensation. Count III sought declaratory
relief in the form of a ruling that the township’s actions were unconstitutional. Count IV
requested a judgment enjoining the township from interfering with TG’s reasonable use and
development of the property. The prayer for relief included a request for monetary damages.
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E. Pretrial Proceedings
The lower court record contains myriad pleadings, motions, and various documents
pertaining to pretrial proceedings. We deem it relevant only to mention that the trial court
denied both parties’ motions for summary disposition.
F. Trial
Michael Tobin was the first witness to take the stand on behalf of plaintiff. Tobin, a
licensed builder, testified that he was a member of TG Development and a partner with the Tobin
Group, and that he had a long history in construction, managing apartment complexes, and real
estate development, as did other members of the Tobin family. Tobin’s two brothers and two
sisters were also members of TG Development and partners in the Tobin Group. The Tobin
family was currently involved in developing apartment complexes and subdivisions. Tobin
testified in regard to the initial conditional purchase agreement (subject to zoning approval) with
CPC in December of 1997, and he indicated that a closing on the seventy-two acre parcel located
in Mt. Morris Township occurred on June 25, 1999, between CPC and the Tobin Group for a
purchase price of $216,000.
Tobin stated that about a month prior to the execution of the purchase agreement, he first
visited the site and noticed corn growing on the land, and that it was a nice piece of flat property.
He was interested in the property as a location to develop an apartment complex. In January of
1998, Tobin viewed the township’s master plan (a/k/a general development plan), obtained
copies of the township’s zoning ordinance, and reviewed records regarding the location of water
and sewer leads in relation to the property, which were suitable for purposes of the proposed
development. Subsequently, on January 12, 1998, Tobin discussed the property with township
supervisor Larry Foster, and he advised Foster that he wished to build apartments on the
property. Tobin indicated in his testimony that he was surprised to learn that Eastman Drive was
a county road, and he asked Foster whether there would be any resistance by the township to an
apartment development; Tobin asserted that he was not looking for a fight. He informed Foster
of the type of apartment units that were planned and assured him that they would not be
subsidized housing. According to Tobin, Foster responded in a positive manner to Tobin’s
proposal, stating that the township would be glad to have the apartments and there should be no
problem. Foster informed Tobin that the property “was master planned for . . . multi-family,”
and it was coded, for purposes of the master plan, as high-density residential. A township
official accompanying Foster assisted Tobin in filling out the rezoning application.
Tobin next testified in regard to the township’s rezoning application process, which was
discussed by us above in the context of the planning commission, township board, and ZBA
proceedings. His testimony was consistent with the minutes of those meetings. Tobin testified
that, with respect to the February 2, 1998, initial planning commission meeting, he was not told
to submit any additional materials for purposes of the March 2 public hearing. He further
testified that the planning commission made no contact with him between the February and
March meetings. Tobin’s testimony went into significant detail in regard to the specifics of the
proposed apartment units. Tobin stated that he admitted to the planning commission that there
was only one road that could access the proposed development site, i.e., Eastman Drive. Tobin
described Eastman Drive as a county road constructed from asphalt with a concrete curb and
gutter, which ended at the Tobin property line. He testified that in all of the numerous
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developments he had been a part of in the past, there was never a denial of the use of a public
road that ended abruptly at the development’s property line.
Tobin then testified, through reference to an area map, that some of the property adjacent
to the site is zoned R-3, including Innisbrook. Other surrounding property is zoned RA, RU-1A
(single family residential), C1 (local business district), C2 (general commercial district), and O
(office district). Tobin testified in detail, based on past experience, concerning the process of
developing properties for construction of apartment complexes, including financial, construction,
environmental, and governmental permit aspects and the financial impact of delays in the
development process.
Tobin testified that the property was still being farmed and that plaintiff was receiving
one-third of either the crops themselves or the proceeds obtained by the farmer. Tobin indicated
that plaintiff only derived a few thousand dollars annually out of the contract with the farmer,
and some years only few hundred dollars were received. After paying the property taxes, there
was little if any gain, or a loss, for plaintiff.
Tobin was questioned with respect to how the property could be developed under the RA
classification, and he stated that it was not worth pursuing. The property could only be
developed into five-acre lots, and Tobin testified:
The costs for land development are normally two hundred and seventyfive dollars a front foot. That’s for the part of the lot that’s on the road. And the
average lot will be about three hundred front feet. And the market wouldn’t – that
would be high – way high-end lots, which make me have to have high-end homes,
and it wouldn’t make sense.
Tobin testified that he did not submit a site plan when going through the process of
seeking rezoning because the only issue was rezoning and “[s]ite-plan approvals, layout of
buildings, and everything else, was really immaterial at that point.”
On cross-examination, Tobin acknowledged that simply because the township supervisor
thought favorably of the project, it did not necessarily mean that approval was forthcoming and
other individuals were involved in the decision-making process. Tobin also acknowledged that
simply because a future land use plan indicated a desire to utilize the property as high-density
residential, it did not mean that rezoning was automatic or a given; the master or future plan was
a guide. The master plan covered the years 1990-2010, and Tobin agreed that the plan is subject
to change over time. He testified that while he often heard concerns of traffic congestion,
reduction of property values, and negative environmental impact in regard to other
developments, Tobin insisted that those issues were a matter of site plan approval not rezoning.
He realized from the beginning of this matter that traffic was going to be a big issue because of
the single ingress and egress point over Eastman Drive. Tobin noted that besides the mere
opinions by local residents regarding possible traffic congestion, there was no hard evidence,
such as a traffic study, relied on by the planning commission and township board.
With respect to the conditional purchase agreement, Tobin stated that counsel mistakenly
placed it in the name of TG Development when it was supposed to be the Tobin Group. Tobin
acknowledged that a risk was taken in subsequently closing on the property outright where
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rezoning had not been accomplished and the lawsuit was proceeding. Tobin was questioned
about Eastman Drive, and a photograph of the road was admitted into evidence. He conceded
that the road did not have sidewalks, and he also conceded that, in the face of concerns about
traffic congestion voiced by residents of the retirement community at the planning commission
meeting, he offered no solutions and did not ask for additional time to address the concerns.
Tobin reiterated, however, that those concerns are typically dealt with during site plan approval.
He further stated that he could not recall whether a planned unit development (PUD) was an
available option.
James Barnwell, a civil engineer with a focus on site plan developments for commercial,
residential, and industrial sites, testified that his company had worked with plaintiff on numerous
projects in the past. According to Barnwell, one of the first questions presented when analyzing
intended development of a parcel of property is whether it meets the zoning classification, and if
not, whether an intent is reflected in the master plan suggesting that the intended use might be
allowed. Barnwell opined that plaintiff’s intended development of the property was consistent
with the township’s master plan for the area. Barnwell completed a few different site plans for
the property, and he testified extensively about the specifics of the planned development. He
stated that he was not asked to address any potential problems concerning the single access over
Eastman Drive. Barnwell also testified regarding the increased construction costs, including
newly adopted governmental fees, that were resulting from the delay in building the apartment
complex. He further testified in regard to the process of site plan approval, which process
generally takes between nine and fifteen months. Barnwell indicated that, at the site plan
approval stage, issues such as traffic and safety are addressed. Regarding a hearing merely on
rezoning, site plans are generally not submitted and the focus is on how an intended project
would fit into a particular classification.
Michael Mansfield, director of traffic engineering and permits for the Genesee County
Road Commission, testified with respect to the characteristics of Eastman Drive. Mansfield
stated that the road consisted of two lanes with the front portion of the road built as a commercial
road and the back portion built as a residential street. The difference being that a commercial
road is built with a thicker pavement to handle truck traffic. A flashing beacon is located where
Eastman and Pierson meet. Mansfield testified that he never received any communications from
township officials regarding concerns about Eastman Drive. Mansfield had dealt with Michael
Tobin on several other development projects, and he found Tobin to be easy to work with and it
was not difficult to resolve matters with him.
Francis Trigger, a member of the township planning commission for approximately forty
years and the township fire chief, testified that, according to the master plan, the township
wanted plaintiff’s property to be developed for high-density residential.
Trigger had
recommended that the rezoning request be denied, but he admitted that he had no idea how much
traffic would be generated if the apartment complex were built.
Charles Sanders, chairman of the planning commission and a member of the commission
for twenty-nine years, testified that, while its acceptable to request rezoning simply by way of
filling out the application form, most developers normally submit some form of site plan along
with the application. Sanders also indicated, however, that not much attention should be paid to
the site plan because the focus is solely on rezoning the property; site plan review and rezoning
review are two separate issues. According to Sanders, site plan review is when the township
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looks into the details of a proposed development such as traffic patterns and impact and reviews
topographical maps, not during review of a rezoning request. Site plan review is guided by
criteria in the zoning ordinance. But Sanders maintained that the same considerations taken into
account during site plan review can also impact the decision-making process on a rezoning
request.
Sanders conceded that the proposed apartment complex was consistent with the
township’s master plan, which is used as a tool in reviewing rezoning applications, and that the
township did not obtain any traffic studies prior to rejecting the rezoning request. He stated that
the township did not do anything to assess the accuracy of the comments made by protesters at
the hearings, and that the township did not know how much traffic would be generated by the
project because there was not a site plan showing exactly what was going to be constructed on
the property. Sanders testified that the township did not request that plaintiff submit any
documentation regarding possible concerns related to the project, nor did the township inform
plaintiff that it should or could seek more time.
Sanders further testified that the general safety, health, and welfare of the people living in
the township is the main focus on any rezoning requests presented to the planning commission.
He called Eastman Drive a glorified driveway and while the commission had no exact numbers
on the amount of traffic that might be generated by the proposed development, if the only access
was Eastman Drive, traffic problems would be an issue. Plaintiff never requested any additional
time to address potential traffic and access issues. Sanders indicated that a traffic study was not
necessarily needed, where common sense and experience suggested that traffic and safety would
be a problem. He stated that when considering whether to rezone property, the commission
keeps in mind all the possible uses that might have to be allowed once rezoning takes place
because once a property is rezoned, a property owner could attempt to build anything consistent
with the zoning classification even if the construction is different than suggested earlier. Under
the RA classification, five-acre lots for a home would be allowed.
Robert Johnson, a member of the township’s board of trustees for a little over seventeen
years, testified in a manner fairly consistent with the testimony of Charles Sanders. Johnson did
indicate that the township’s master plan “has a big impact” on a rezoning request.
John Evers, a certified community planner testifying as an expert, when questioned about
the factors that a township considers where a request for rezoning is made, opined:
Some of the major factors – or the – the first factor is whether or not that
particular request is in conformance with the Master Plan. Because the Master
Plan is to function as the basis for zoning. It also is – is based upon – your review
would be based upon what the surrounding land uses essentially are, at the time[,]
the proximity to different types of land uses that are compatible, or not compatible
with what those land use[s] [are]. Traffic patterns within the community. The
population – proposed population growth within the community, would it warrant
that type of additional land use. Those are the major things that we would look at.
Evers stated that traffic volumes and impact on surrounding sites should be considered
before property is rezoned. Evers indicated that he would expect a planning commission to
provide a list of things for the developer to submit regarding such matters as traffic and
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environmental impact, but this was not done in the present case. Typically, according to Evers, a
planning commission would seek an impact study for purposes of determining whether to rezone
property, or do some type of investigation. Greater details would be addressed during site plan
review. Under the R-3 designation, up to 898 units could be placed on the property, and Evers
testified that if the planning commission rather have less than that for reasons of health, safety,
and welfare, the applicant would not be required to adhere to that where the R-3 classification
was already in place.
Evers maintained that the focus should be on the master plan, and it would be prudent for
a developer to rely on the master plan. Here, Evers review of the minutes of the township
meetings indicated that the township made no reference to the master plan. Evers was of the
opinion that, considering all of the circumstances, the site at issue lent itself to the development
of an apartment complex. With respect to the RA classification, Evers testified that singlefamily homes could be built, plus ancillary uses such as stables. Taking into consideration the
space needed for streets, about twelve five-acre lots could be formed out of the seventy-two acre
parcel. Evers thought that a state-licensed residential care facility could also be built on the
property. In conclusion, Evers opined:
[T]he decision by the Planning Commission was really not based upon any
– to my determination, any factual analysis of conditions. They didn’t refer to the
Master Plan. There’s no – were no studies undertaken, on behalf of the – the
Planning Commission to, basically, make a rational decision as to whether or not
this was a good development and what the impact would – would be. There was a
lot of conjecture, but there were no facts or data associated with it.
On cross-examination, Evers acknowledged that a master plan is a guide and not the sole
determining factor in making a rezoning decision, and that master plans change and evolve over
time. Evers again stated that traffic concerns and the lack of sidewalks constitute legitimate and
important factors in considering a rezoning application. Evers concluded that if 744 apartment
units were constructed on the site, the traffic generated would be 4,500 to 4,600 vehicle trips per
day, and obviously the number would be higher if 898 units were constructed.
Evers also
conceded that a planning commission, in evaluating whether to grant or deny a rezoning
application, can rely on experience and common sense. He also acknowledged that it varies
from community to community in regard to planning commissions notifying developers of the
need to submit supporting materials along with the rezoning application and in regard to the
commissions’ investigation of various impact concerns depending on the staff and funding level
available to the particular commission. Evers further conceded that if a developer is confronted
with traffic and safety concerns, he or she should respond to the concerns, or ask for more time
to do so, which time extension a commission should grant.
Larry Foster testified that in the nine years as township supervisor, he was not aware of
any time that the township tried to restrict access to a county road such as Eastman Drive. He
further testified that he voted to deny the request because of health, safety, and welfare concerns
predicated on the traffic issue, which was a matter of common sense without the need of a traffic
study.
Barry Simon, Executive Vice-President of the Builders Association of Metropolitan Flint,
testified, as an expert, about the marketability of housing locations. He stated that the demand
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for single-family dwellings in the township was very low, but there had been an increase for
apartment permits in the township. According to Simon, the township is not a highly marketable
community and has low real estate values. If plaintiff were to build on the property consistent
with the RA zoning classification, and taking into consideration a cost of $78,000 to $80,000 to
develop each lot as extracted from Mr. Tobin’s testimony, Simon opined that typically the house
constructed on the lot would go for around $400,000, which would not be viable for that area.
Kenneth Blondell, plaintiff’s final witness and a real estate appraiser, testified that he
was requested by plaintiff to prepare a feasibility analysis of the property under an RA zoning
classification and to prepare a damage analysis to determine damages due to the delay in the
construction of an apartment complex. Because the issue of damages is not before us on appeal,
we shall focus on Blondell’s testimony related to the feasibility analysis. We do note, however,
that Blondell arrived at an amount of $14,415,670 in losses because of a delay period running
from October 1998 and October 2001. These were the damages sought by plaintiff.
Blondell opined that to develop the site into twelve five-acre lots, the total development
cost would be approximately $990,000, or $82,500 per lot. Blondell then looked at comparable
lot sales in the area of which he found twelve minimally suitable for comparison. The sales
range was between $23,500 and $65,000. The three best comparables were all located in the
township, and the one lot most suitable for comparison sold for $23,900. The highest priced
comparable lot in the township was $48,000, and even that price should be reduced for
comparison purposes because a pole barn was located on the property. Blondell concluded that
the price that could be obtained for the five-acre lots was $25,000. In light of the comparisons,
Blondell stated that it would not be feasible or sensible to spend $82,500 preparing the lots.
Additionally, there were other costs to the developer, including the purchase price of the land,
which would raise plaintiff’s actual costs to an amount beyond the $82,500 if the lots were
prepared for sale. Overall, plaintiff would suffer a loss if it developed the property under the
RA classification. Blondell opined that it would not be feasible to develop a twelve-unit, singlefamily subdivision on the seventy-two acre property. On cross-examination, Blondell stated that
he did not do a feasibility study of a residential care facility.
G. Trial Court’s Ruling – Involuntary Dismissal
Following the conclusion of plaintiff’s proofs, defendant moved for directed verdict,
more appropriately coined a motion for involuntary dismissal being that the court was to decide
the issue of liability and the jury to determine only damages. The trial court first dismissed any
claims presented by TG Development for lack of standing in light of the fact that it no longer
held any interest in the property. In regard to the claims of the Tobin Group, the trial court,
speaking from the bench, indicated that it was going to grant the motion to dismiss on the basis
of subject matter ripeness because plaintiff failed to thoroughly pursue the matter at the township
level where other options were possibly available. The trial court also opined that plaintiff failed
to satisfy the burden of proof to show wrongful action on the part of the township, and that there
was insufficient evidence to show a taking, arbitrary decision-making, or to show that the
township’s decision was not supported by competent evidence. The trial court, however,
indicated that it was going to issue a written ruling in support of the dismissal.
Subsequently, the trial court issued a written opinion in which it ruled that plaintiff’s
action was not ripe as it failed to meet the rule of finality set forth in Paragon Properties Co v
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City of Novi, 452 Mich 568; 550 NW2d 772 (1996). The trial court explained that plaintiff failed
to explore several options with the township, including a PUD and development of a residential
care facility. The court also stated that plaintiff failed to research the township’s reasons for
denial and reapply or appeal with more and better information, and the court found that there was
no proof that the township would reject other options. The trial court further ruled that the
township’s decision to deny rezoning was supported by competent, material, and substantial
evidence, and that plaintiff had the burden, which it failed to meet, to show that the township’s
concerns about traffic, safety, and emergency access were not valid. In conclusion, the trial
court stated:
Plaintiffs have not shown that they were treated differently than similarly
situated property holders. They have not shown that the zoning ordinance is not
rationally related to a legitimate governmental interest. They have not eliminated
all uses of the land rendering it useless. They cannot claim interference with a
reasonable investment-backed expectation because the zoning change was already
denied when they bought the property. They were merely gambling on this
lawsuit.
Plaintiffs may have a good and valid development plan, but they ran to the
courthouse too soon. The mere fact that the ordinance decision at issue deprives
Plaintiffs of their most profitable use of the land does not satisfy Plaintiffs’
burden of proof or make any constitutional claims ripe for review. [Citation
omitted.]
II. ANALYSIS
A. Standard of Review
In a civil action, this Court treats a motion for a directed verdict as a motion for
involuntary dismissal brought pursuant to MCR 2.504(B)(2), where the trial court is sitting as the
trier of fact. Samuel D Begola Services, Inc v Wild Bros, 210 Mich App 636, 639; 534 NW2d
217 (1995). The trial court may dismiss a plaintiff’s cause of action after the close of the
plaintiff’s case if the court determines that the plaintiff has not shown a right to recovery under
the facts and the law. Id., citing MCR 2.504(B)(2). Contrary to the standard utilized by a trial
court in addressing a motion for directed verdict, i.e., viewing the evidence in a light most
favorable to the nonmoving party, the court judges credibility, weighs the evidence, and decides
the case on the merits. Warren v June’s Mobile Home Village & Sales, Inc, 66 Mich App 386,
389; 239 NW2d 380 (1976). A trial court’s findings of fact on a motion for involuntary
dismissal are reviewed to determine if the findings are clearly erroneous. Begola, supra at 639.
A trial court’s findings of fact are clearly erroneous only where we are left with a definite and
firm conviction that a mistake has been made. Id.
A trial court’s ruling on a constitutional challenge to a zoning ordinance is reviewed de
novo. Scots Ventures, Inc v Hayes Twp, 212 Mich App 530, 532; 537 NW2d 610 (1995). The
trial court’s underlying factual findings, however, are accorded great deference. English v
Augusta Twp, 204 Mich App 33, 37; 514 NW2d 172 (1994).
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B. Ripeness – Finality
Plaintiff argues that the trial court erred in ruling that the case was not ripe for
presentation in the circuit court and failed to satisfy the rule of finality. Plaintiff asserts that
there is no requirement that a party must establish that it cannot develop its property under any
and all zoning classifications, or that it could develop the property with a use other than its
proposed use. Plaintiff further argues that regulating agencies cannot burden property by
imposition of repetitive or unfair land use procedures in order to avoid a final decision. In other
words, according to plaintiff, a “regulating agency cannot play a game of 20 questions that
requires the claimant to guess what the agency can and is willing to do regarding the
development of the property.” Plaintiff maintains that the trial court erred by ruling that the
plaintiff needed to resubmit another rezoning request accompanied by a less alleged grandiose
plan to ripen its claims. The trial court mistakenly believed that plaintiff was required to
essentially keep trying with the township until no avenue was left to explore.
In Paragon, supra, our Supreme Court addressed the doctrine of finality, where the
plaintiff property owner purchased a seventy-five acre parcel zoned for large-lot, single-family
residential use and sought the city’s approval to rezone the property to a mobile home district.
The planning board recommended denial of the rezoning request, and the city subsequently
denied the request. The plaintiff filed suit in the circuit court, and the court denied the city’s
motion for summary disposition, which motion was predicated on the plaintiff’s failure to seek a
use variance from the city’s ZBA.
On appeal, the Supreme Court held that the plaintiff’s
constitutional challenge to the zoning ordinance, as applied, was not ripe for review. Id. at 571.
The Michigan Supreme Court held:
A challenge to the validity of a zoning ordinance “as applied,” whether
analyzed under 42 USC 1983 as a denial of equal protection, as a deprivation of
due process under the Fourteenth Amendment, or as a taking under the Just
Compensation Clause of the Fifth Amendment, is subject to the rule of finality.
“[T]he finality requirement is concerned with whether the initial
decisionmaker has arrived at a definitive position on the issue that inflicts an
actual, concrete injury . . . .” [Id. at 576-577 (citations omitted; alteration and
omission in original).]
Citing favorably Electro-Tech, Inc v H F Campbell Co, 433 Mich 57, 85; 445 NW2d 61
(1989), the Paragon Court stated that until a municipalities’ objections to a project are addressed
and finally resolved, it is impossible to accurately determine the extent to which the plaintiff’s
land retained any reasonable beneficial use or the extent to which the plaintiff’s expectation
interest has been destroyed. Paragon, supra at 578.
The Court noted that the finality
requirement aids in determining whether a taking has occurred by addressing the actual
economic effect of a regulation on the property owner’s investment expectation, which cannot be
evaluated until the administrative agency has arrived at a final, definitive position regarding how
it will apply the regulations at issue to the particular property. Id. at 578-579. The Paragon
Court rejected the plaintiff’s argument that the city’s denial of the rezoning request was a final
decision because the city council was the initial decisionmaker concerning rezoning requests. Id.
at 579-580. The Court ruled:
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The City of Novi’s denial of Paragon’s rezoning request is not a final
decision because, absent a request for a variance, there is no information
regarding the potential uses of the property that might have been permitted, nor,
therefore, is there information regarding the extent of the injury Paragon may
have suffered as a result of the ordinance. While, the city council’s denial of
rezoning is certainly a decision, it is not a final decision under Electro-Tech
because had Paragon petitioned for a land use variance, Paragon might have been
eligible for alternative relief from the provisions of the ordinance. [Paragon,
supra at 580.]5
A broad reading of Paragon suggests that here, plaintiff did not satisfy the rule of
finality. True, a rezoning request was made and clearly rejected, and while a use variance was
similarly rejected as opposed to the circumstances found in Paragon, there was no review by the
township of other potential uses of the property because there were no further requests by
plaintiff. The trial court stated that plaintiff failed to explore a PUD option and the development
of a residential care facility,6 along with failing to research the township’s reasons for denial and
reapply. With respect to the PUD option, plaintiff argues that there was no evidence that any
such development option existed or that the development under a PUD would somehow negate
the township’s objection to an R-3 type development on the property. Article IX of the
ordinance addresses PUDs, stating, in part:
The intent of this section is to provide a degree of flexibility in regard to
the use, area, height, bulk, and placement regulations for large scale developments
which qualify as [PUDs]. These may include, but are not limited to, housing
developments, shopping centers, industrial districts, office districts, and medical
and educational campuses.
One of the factors that is required to be considered in a PUD application is whether “the
proposal [is] compatible with objectives of the General Development Plan or specific elements
thereof that have been officially adopted by the Planning Commission.” Art IX, § 9.03. The
ordinance, however, also refers to PUDs covering “incidental uses not normally permitted in the
5
In MacDonald, Sommer & Frates v Yolo Co, 477 US 340, 351; 106 S Ct 2561; 91 L Ed 2d 285
(1986), the United States Supreme Court stated that “[o]ur cases uniformly reflect an insistence
on knowing the nature and extent of permitted development before adjudicating the
constitutionality of the regulations that purport to limit it.” A final decision by the relevant
agency informs the constitutional determination whether a regulation has deprived a landowner
of all economically beneficial use of the property, or defeated the reasonable investment- backed
expectations of the landowner to the extent a taking has occurred. Palazzolo v Rhode Island, 533
US 606, 618; 121 S Ct 2448; 150 L Ed 2d 592 (2001). These matters cannot be resolved in
definitive terms until a court knows the extent of permitted development on the land at issue. Id.
6
It appears that a residential care facility was not an option under the zoning ordinance. Plaintiff
states on appeal that it was an offhanded, inaccurate remark by a witness that possibly a
residential care facility could be operated under the RA classification. Defendant does not
challenge this contention, and the zoning ordinance does not reflect the availability of such a use.
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zone district.”7 Art IX, 9.01. Our review reveals no language that directly precludes plaintiff
from seeking a PUD, but it is questionable whether a PUD was actually an option given some of
the language in the ordinance.
We opine that Paragon creates a quagmire that we find unnecessary to extricate
ourselves from in the case at bar. A broad reading of Paragon can literally lead to the necessity
of endless requests on the part of a property owner to satisfy the rule of finality. Arguably, the
case can be read to require plaintiff to keep resubmitting R-3 rezoning requests or ask for
reconsideration with variations on the original proposal until every infinitesimal variation has
been rejected.8 Even then, it could be argued that plaintiff was not only required to apply for a
PUD, but to also apply for rezoning to every other zoning classification available in the
township, which might lead to use of the property such that it would not effectuate a taking.
Plaintiff would have to make requests inconsistent with its desired use of the property. The
quagmire is created because without such extensive exploration, it cannot truly be determined
whether there was an actual concrete injury; speculation to some degree would be necessary. A
more narrow or limited interpretation of Paragon would support the proposition that when a
property owner seeks and is denied rezoning and denied a use variance through the ZBA to do
what the owner sought to accomplish through rezoning, the rule of finality is satisfied. Under
this interpretation, plaintiff’s action in the circuit court was ripe. We are left with the question,
does finality equate to a final decision on a specific request and necessarily related requests, e.g.,
a rezoning request to build an apartment complex and a use variance request to build the same
apartment complex, or does it equate to a final decision on, additionally, any request that could
possibly be made to the township that impacted the use of the property, e.g., a PUD. As noted
above, we find it unnecessary to answer this question today because the trial court did not limit
support for its decision to the rule of finality, and we conclude that the additional support for the
court’s grant of an involuntary dismissal was not in error.
C. Circuit Court Decisionmaking Standards
Aside from ruling that plaintiff’s action was not ripe, the trial court found that the
township’s rejection of the rezoning application was supported by competent, material, and
substantial evidence. We agree with plaintiff that this language correlates to an appellate review
standard applied by the trial court in reviewing the township’s decision, and it is not the
7
We acknowledge plaintiff’s claim that the zoning ordinance was not admitted at trial and find it
to be disingenuous. The record suggests that it may not have been formally admitted at trial;
however, the trial court, defendant, and plaintiff, continually referenced and relied on the
ordinance throughout the proceedings, and moreover, plaintiff stipulated to the ordinance being
entered as an exhibit. Plaintiff’s claim is predicated on the ordinance. For all intents and
purposes, it was evidence, and we shall treat it as evidence.
8
The same can be said for any use variance request. We recognize that variations of the
rezoning request, e.g., a request to rezone to build only a 100 unit complex, as opposed to the
same proposal in a variance request, would most likely be rejected because once the rezoning
occurred, plaintiff could, according to trial witnesses, decide to build an 898 unit complex
because it was consistent with the R-3 classification, and the township could do nothing.
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appropriate standard because the court was sitting as a court of original jurisdiction where
plaintiff challenged a rezoning denial.
MCL 125.293a(1) provides for judicial review by the circuit court of a ZBA decision for
a determination whether the decision complied with the constitution and laws of the state, was
based upon proper procedure, was supported by competent, material, and substantial evidence,
and represented the reasonable exercise of discretion. The function of the circuit court when
reviewing a ZBA variance decision is to determine whether it was supported by competent,
material, and substantial evidence. Schadewald v Brule, 225 Mich App 26, 33; 570 NW2d 788
(1997). Here, the trial court was not reviewing a variance denial, or another administrative
decision, because the issue was not raised in plaintiff’s complaint, but rather the court was
presented with a challenge to a rezoning denial.9
In Arthur Land Co, LLC v Otsego Co, 249 Mich App 650; 645 NW2d 50 (2002), the
plaintiff petitioned to rezone property from a residential district to a zone that would permit
construction of a convenience store and gas station. The rezoning request was denied, and the
plaintiff pursued the matter by filing a complaint in the circuit court, alleging a violation of
substantive due process and a confiscatory taking. The circuit court granted the county’s motion
for summary disposition, enunciating its belief that the action was essentially an appeal subject
to an appellate standard of review and finding that the plaintiff failed to establish a genuine issue
of material fact because the board’s decision was aptly supported by competent, material, and
substantial evidence.
The Arthur Land panel stated that it is well-settled law that the zoning and rezoning of
property are legislative functions. Id. at 662. The Court held:
Because in denying plaintiff’s request to rezone, the county board of
commissioners acted as a legislative, as opposed to administrative, body, the trial
court’s decision in this regard was error. Were this an appeal from an
administrative body, the trial court would have been limited to a determination
whether the decision was authorized by law and supported by competent,
material, and substantial evidence on the record. However, “ ‘[b]ecause rezoning
is a legislative act, its validity and the validity of a refusal to rezone are governed
by the tests which we ordinarily apply to legislation.’”
Moreover, plaintiff’s complaint was filed as an original action in the
circuit court, wherein plaintiff challenged the constitutionality of the zoning
9
We note that, despite the fact that plaintiff sought review by the ZBA of the rezoning denial
and that the ZBA actually reviewed the issue, the ZBA did not have the authority to entertain the
matter in the first place. “The township board of appeals shall hear and decide questions that
arise in the administration of the zoning ordinance . . . .” MCL 125.290. Plaintiff’s claim did
not arise out of the administration of a zoning ordinance but rather sought a legislative change in
the zoning classification itself. See Arthur Land Co, LLC v Otsego Co, 249 Mich App 650, 664;
645 NW2d 50 (2002).
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ordinance as applied to plaintiff’s property and requested declaratory and
injunctive relief. These were matters within the trial court’s original, rather than
appellate, jurisdiction. Accordingly, plaintiff was entitled to a hearing de novo on
the issues raised and the trial court therefore erred in limiting plaintiff’s proofs to
those presented before the township and county commissions and boards. [Id. at
664-665 (citations omitted; alteration in original).]
Here, because plaintiff also initiated an original action alleging constitutional violations
arising out of the township’s refusal to rezone the property, the trial court was sitting as a court
of original, not appellate, jurisdiction. Accordingly, the trial court erred in utilizing an appellate
standard of review that is reserved for review of administrative decisions. That being said, the
trial court’s statements from the bench in support of involuntary dismissal and its written opinion
clearly indicate that the court also found that plaintiff failed to submit sufficient evidence at trial
to show a taking, to show that it was treated differently than similarly situated property owners,
and to show that the ordinance was not rationally related to a legitimate governmental interest.
In other words, the trial court ruled that plaintiff failed to establish a taking, a due process
violation, and an equal protection violation. Therefore, we next review these causes of action to
determine if the trial court erred in its ruling, except as to equal protection which is not raised on
appeal.
D. Substantive Due Process
Plaintiff argues that the trial court erred by dismissing its substantive due process claim.
The state and federal constitutions guarantee that no person shall be deprived of life, liberty, or
property without due process of law. US Const, Am XIV; Const 1963, art 1, § 17. In order to
afford a property owner substantive due process, an ordinance must be rationally related to a
legitimate governmental interest. Landon Holdings, Inc v Grattan Twp, 257 Mich App 154, 173174; 667 NW2d 93 (2003). A substantive due process violation occurs if the zoning ordinance
and classification does not advance a legitimate governmental interest. Hecht v Nile Twp, 173
Mich App 453, 461; 434 NW2d 156 (1988). A zoning ordinance must be reasonable to comply
with due process. Landon, supra at 173. The reasonable basis for an ordinance must be
grounded in the police power and includes protection of the safety, health, morals, prosperity,
comfort, convenience, and welfare of the public. Hecht, supra at 460. A zoning ordinance is
presumed to be valid, and the party challenging the ordinance has the burden of showing that it
has no real or substantial relation to public health, morals, safety, or general welfare. Bevan v
Brandon Twp, 438 Mich 385, 398; 475 NW2d 37 (1991), amended on other grounds 439 Mich
1202 (1991). A zoning ordinance also violates due process where it constitutes an unreasonable
means of advancing a legitimate governmental interest. Hecht, supra at 461.
Thus, an
ordinance may not unreasonably, arbitrarily, or capriciously exclude other types of legitimate
land use from the area in question. Kropf v City of Sterling Heights, 391 Mich 139, 158; 215
NW2d 179 (1974). In order to establish a substantive due process violation, it must appear that
the ordinance is an arbitrary fiat, a whimsical ipse dixit, and that there is no room for a legitimate
difference of opinion concerning its reasonableness. Id. at 162. The argument that a property
has a higher use if zoned differently does not rebut the showing of reasonableness of the existing
zoning classification, nor does it satisfy the burden to show that the exclusion of other uses was
arbitrary and capricious. Id. at 160. A court does not sit as a superzoing commission. Id. at 161.
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We find that there was sufficient evidence presented to the trial court to support the
conclusion that there was no substantive due process violation. The RA zoning classification
under which plaintiff’s property fell advanced the legitimate governmental interest of protecting
the safety, convenience, and welfare of the public, most notably that of the elderly living in the
adjacent Innisbrook retirement community. The evidence reflected that the only access to
plaintiff’s property was a two-lane county road without sidewalks, that R-3 zoning would have
allowed up to 898 apartment units on plaintiff’s property which by common sense would have
the potential of greatly intensifying the traffic congestion through the retirement community, that
Eastman Drive would have to handle an additional 4,500 to 4,600 vehicle trips per day, and that,
on the other hand, RA zoning is completely compatible with, considering safety, convenience,
and welfare purposes, the single road access, the R-3 zoned retirement community, and with the
other zoning designations of surrounding property. Of course, our focus is on the constitutional
validity of the RA zoning classification, not on the reasonableness of the R-3 request, because
the substantive due process challenge attacks the validity of the existing ordinance. The
evidence of the lone access, two-lane, sidewalk free roadway and the adjacent retirement
community, along with a mix of other RA and R-3 zoned property nearby, when considered with
the requirement that the ordinance be given a presumption of validity, leads us to conclusion that
the RA zoning classification advances a legitimate governmental interest. The RA designation
allowing low-density residential development and agricultural development is compatible with a
lone access road, which was described as a glorified driveway, and a retirement community.
Moreover, we find that the placement of an RA classification on the property in question
constituted a reasonable means to advance the legitimate interest of the township. The RA
classification does not unreasonably, arbitrarily, or capriciously exclude other types of legitimate
land use; it is indeed reasonable, practical, and wise to zone the property RA under the
circumstances. Higher density usage, such as sought by plaintiff, is not arbitrarily excluded but
instead not permitted because of incompatibility with the surrounding environment.
Plaintiff relies on MCL 125.273 which provides, in part, that “[t]he zoning ordinance
shall be made with reasonable consideration, among other things, to the character of each
district; its peculiar suitability for particular uses; the conservation of property values and natural
resources; and the general and appropriate trend and character of land, building, and population
development.” We opine that this provision supports, rather than negates, the township’s
decision to leave intact the RA classification; the township clearly considered the peculiar
suitability of R-3 and RA zoning designations on the basis of the particular property involved,
and it did so in a reasonable fashion. Plaintiff’s argument that the RA zoning classification is
inconsistent with the surrounding classifications, which are allegedly more urban than rural,
suggests that the township should urbanize every parcel regardless of its compatibility with
surrounding urbanized developments and regardless of access points. This is illogical and
contrary to the township’s mandate to zone in a manner that protects the safety, health, and
general welfare of the public. Moreover, there remain large tracts of RA zoned property in the
general area of plaintiff’s property.
Plaintiff asserts that MCL 125.273 requires a township to zone according to a basic plan.
“The zoning ordinance shall be based upon a plan designated to promote the public health,
safety, and general welfare[.]” MCL 125.273. This cannot be read to require that the numerous
zoning classifications under the township ordinance and the application of those classifications to
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the many tracts of township property are subject to a permanent set plan without change or
consideration of new and evolving circumstances. A master plan is just that, a plan, a plan for
the future. Even plaintiff’s witnesses admitted that the master plan did not solely govern and
conclusively determine how a particular parcel would be zoned. To read the statute as
interpreted by plaintiff, a township would not have the discretion to make individual deviations
from a plan based on ever changing circumstances to do just what it is bound to do, i.e., protect
the general welfare. Plaintiff maintains that, because of the statutory language, the trial court
should have presumed that the R-3 classification was reasonable absent evidence to the contrary.
Even accepting this principle as valid, there was in fact evidence to the contrary as previously
discussed.10 Furthermore, this Court in Troy Campus v City of Troy, 132 Mich App 441, 457;
349 NW2d 177 (1984), stated that a “master plan is a factor in determining reasonableness. It is,
however, only one factor; it does not replace the balancing of interests required under an
assertion of the police power.”
We reject plaintiff’s argument that the township’s purported concern with traffic
congestion and safety merely masked its true concern, which was allegedly fear that plaintiff
would allow subsidized housing despite assurances to the contrary. It cannot be ascertained
from the record that this reflected the true concern of the township, nor was it argued, and
regardless, traffic congestion and the safety and convenience of the Innisbrook residents were the
concern presented, and this concern can be viewed as grounded in legitimacy considering the
circumstances of the case.11
10
Plaintiff presents an additional argument that the township’s past actions highlight that it acted
arbitrarily and unfairly with respect to the RA zoning classification. This is because that, when
the township approved the Innisbrook Subdivision in 1987, it allowed the project to go forth with
a single means of ingress and egress set at a sixty-six foot width without requiring a more
adequate road that could some day also serve a development on plaintiff’s property. This
argument, besides lacking merit, is illogical. It somehow assumes that in 1987, the township
should have known that one day a developer wishing to build an enormous apartment complex
would purchase adjacent land zoned RA and seek to rezone the land to R-3 such that,
considering the higher density concentration of R-3, a more suitable means of ingress and egress
to Innisbrook should have been required to allow the road to fully serve all residents and future
residents of the area. At the time, and still today, the property was zoned RA which would not
suggest the need for an expansive means of ingress and egress to serve Innisbrook. And the
relevant master plan was not yet in place. To assert that this reflects arbitrariness on the part of
the township is unfounded. The fact that a couple years after Innisbrook was approved, the
township’s master plan reflected a design to some day utilize plaintiff’s property as high-density
residential cannot in hindsight show arbitrariness. Plaintiff’s reliance on Troy Campus v City of
Troy, 132 Mich App 441; 349 NW2d 177 (1984), is misplaced and distinguishable because there
this Court found arbitrariness where the city claimed worries of traffic congestion supported the
continuing viability of a single-family zoning classification, but where the city also had plans to
improve the pertinent roadway, a major thoroughfare, and two other office developments had
just been approved without accompanying approval of the plaintiff’s similar office development.
Id. at 455-456.
11
We respectfully reject the contention in George v Harrison Twp, 44 Mich App 357, 364-365;
(continued…)
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E. Taking
Plaintiff argues that the trial court erred in dismissing its claim of a taking. Both the Fifth
Amendment of the United States Constitution and art X, § 2 of the Michigan Constitution of
1963 prohibit the governmental taking of property without just compensation. A taking may
occur where a governmental entity exercises its police power through regulation restricting the
use of property. Electro-Tech, supra at 68. If zoning laws go too far in impairing a property
owner’s use of his or her land, the regulation may amount to a taking. Bevan, supra at 390. The
diminution of property value by application of ordinance regulations, without more, does not
amount to an unconstitutional taking. Paragon, supra at 579 n 13. The Taking Clause does not
guarantee property owners an economic profit from the use of their land. Id. In K&K
Construction, Inc v Dep’t of Natural Resources, 456 Mich 570, 576-577; 575 NW2d 531 (1998),
our Supreme Court noted the parameters of a taking claim:
[C]ourts have found that land use regulations effectuate a taking in two
general situations: (1) where the regulation does not substantially advance a
legitimate state interest,[12] or (2) where the regulation denies an owner
economically viable use of his land.
The second type of taking, where the regulation denies an owner of
economically viable use of land, is further subdivided into two situations: (a) a
“categorical” taking, where the owner is deprived of “all economically beneficial
or productive use of land,” or (b) a taking recognized on the basis of the
application of the traditional “balancing test[.]”
[A] person may recover for . . . [a categorical] taking in the case of a
physical invasion of his property by the government . . ., or where a regulation
forces an owner to “sacrifice all economically beneficial uses . . . in the name of
the common good[.]” In the latter situation, the balancing test, a reviewing court
must engage in an “ad hoc, factual inquir[y],” centering on three factors: (1) the
character of the government’s action, (2) the economic effect of the regulation on
the property, and (3) the extent by which the regulation has interfered with
distinct, investment-backed expectations. [Citations omitted; emphasis in
original.]
Here, we first find that there was no evidence of a “categorical” taking, which leaves us
with the application of the balancing test to determine if the evidence showed that plaintiff was
denied economically viable use of its land. The character of the township’s action was simply
the application of a zoning classification affecting plaintiff’s property, which we find was
reasonable and appropriate. The economic effect of the zoning classification is guided by the
(…continued)
205 NW2d 254 (1973), unsupported by any authority, suggesting that road and emergency
responder access are irrelevant in determining the reasonableness of a challenged zoning
ordinance. The case is not binding on this Court pursuant to MCR 7.215(J)(1).
12
We again note that there is no merit in the claim that the zoning ordinance did not advance a
legitimate state interest.
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requirements and permitted uses of the ordinance regarding RA zoned property. Plaintiff did
produce evidence showing that developing five-acre lots for sale would result in a financial loss
and that continued leasing to a local farmer was not profitable after consideration of property
taxes. We point out, however, that the evidence did not show that plaintiff could not sell the
property for consideration or that plaintiff could not continue leasing to the farmer, only that no
profit could be made, which Paragon indicates is insufficient.
Further, there was no exploration of other uses for development allowed under the RA
designation, including various types of farming operations (livestock, poultry, dairying, etc.), and
numerous potential uses, on special approval, including halls of worship, hospitals, roadside
stands, horse stables, riding academies, private parks, gun clubs, golf courses, kennels, and other
similar uses. But this Court’s decision in Troy, supra at 451, states that the burden to show that a
classification precludes use of the land for any use to which it is reasonably adapted does not
impose a “burden on plaintiff to positively show that the land could not be reasonably adapted to
each and every permitted use[.]” Though we find those statements somewhat inconsistent, we
believe that the farming operation alternative here, as a definitive permitted use, should have
minimally been recognized and addressed by plaintiff at trial. Regardless, our ruling hinges on
the third factor of the balancing test. With respect to investment-backed expectations, we opine
that this factor supports the conclusion that plaintiff had no viable taking claim given that
plaintiff purchased and closed on the property with full knowledge of the RA classification and
full knowledge of the rezoning request denial. It was not reasonable for plaintiff to expect, in
the context of its investment, to make a profit developing an apartment complex when, at the
time of the closing on the property, the rezoning request had been denied. Plaintiff took a
chance or a risk that it might not be able to develop an apartment complex, and it cannot
thereafter come running to the courthouse claiming that the township effectively took its
property.
In Adams Outdoor Advertising v City of East Lansing (After Remand), 463 Mich 17, 27;
614 NW2d 634 (2000), the Supreme Court, addressing and rejecting Adams’ claim that East
Lansing’s sign code effectuated a taking with respect to rooftop signs, stated in partial support of
its ruling:
Further, Adams acquired the rooftop signs and leases at issue in 1983 and
renewed the leases as recently as 1993 and 1996. In 1983, 1993, and 1996,
Adams was aware of the 1975 sign code and could have had no reasonable
expectation that it could maintain the signs at the rooftop locations after the date
designated in the code. Under these circumstances, Adams’ property interests in
the leases clearly did not include a right to display signs on a rooftop after May 1,
1987.
We find additionally compelling and relevant Justice Kelly’s concurring opinion, which is a
consistent expansion on the preceding quote, wherein she stated:
Here, plaintiff never had a legitimate expectation that its leaseholds or
billboards would continue to produce income in perpetuity. The fact that plaintiff
continued to invest in new leaseholds after defendant enacted its sign ordinance
does not compel this Court to find a taking. Plaintiff was well aware that the
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enforcement of defendant’s sign code could, at any time, render its leasehold
interests worthless. [Id. at 38.]
Here, likewise, it was not reasonable for plaintiff to expect a return on its investment in
the form of revenue generated by operating an apartment complex, where the township’s zoning
ordinance did not allow apartment complexes to be built on the property and a rezoning request
had been denied.13 While there was a possibility that the trial court would rule in its favor thus
allowing development, it was just that a possibility, and considering the factual circumstances
and law, an outside possibility at best. When that possibility did not occur and plaintiff’s hopes
did not come to fruition, plaintiff could not avail itself of the constitutional protections against
takings without just compensation. The evidence supported the trial court’s finding that plaintiff
failed to establish a cause of action for a taking.14
III. CONCLUSION
The trial court erred by applying an appellate standard of review with regard to a portion
of its ruling, instead of a de novo, independent standard, where plaintiff filed an original circuit
court action challenging the denial of a rezoning request, which is legislative in nature as
opposed to administrative. Regardless, the trial court also found that plaintiff failed to submit
sufficient evidence at trial to support the claims of an unconstitutional taking and violations of
substantive due process and equal protection. The evidentiary record supports the trial court’s
rulings as to the appealed claims. Finally, in light of our holding affirming the trial court on the
substance of plaintiff’s causes of action, we deem it unnecessary to determine whether the court
erred in the application of the rule of finality or ripeness.
Affirmed.
/s/ Kirsten Frank Kelly
/s/ William B. Murphy
/s/ Janet T. Neff
13
We note that plaintiff fails to address this issue in its appellate brief despite the fact that the
trial court used it as a basis for its opinion and specifically cited Adams. Plaintiff further fails to
address the issue in its reply brief despite defendant’s reliance on the principle in its appellee
brief.
14
Considering that plaintiff’s due process claim is grounded in the alleged deprivation of a
property interest, we see no reason not to similarly apply the principle in Adams to the
substantive due process claim.
-21-
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