In re Molgano

IN_RE_MOLGANO.93-017; 163 Vt 25; 653 A.2d 772

[Filed 10-Nov-1994]

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P.
40 as well as formal revision before publication in the Vermont Reports. 
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
order that corrections may be made before this opinion goes to press. 


                                    No. 93-017


In re Frank A. Molgano, Jr.               Supreme Court

                                          On Appeal from
                                          Environmental Board

                                          March Term, 1994



Elizabeth Courtney, Chair

John M. Ruggiero of McClallen Ruggiero P.C., Rutland, for appellant

Seth B. Bongartz of Witten, Saltonstall & Woolmington, P.C., Bennington, for
appellee 


PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.



  MORSE, J.   Frank A. Molgano, Jr. appeals a decision of the Environmental
Board denying his application for an Act 250 land use permit for the
construction of two professional office buildings on Route 7 North in the
Town of Manchester.  We hold that conformance with a town plan under 10
V.S.A.  6086(a)(10) is to be measured with regard to the zoning bylaws in
effect at the time of application for local zoning permits, and we reverse. 

  Molgano's journey toward obtaining permission to construct two office
buildings took many steps and has involved, so far, seven years of delay.  In
June 1987, he applied to the Manchester Zoning Board of Adjustment (ZBA) for
a zoning permit to build three office 

 

buildings.  Molgano's property was located on Route 7 North in the "Transient
Commercial Overlay" (TCO) section of the "Farming and Rural Residential"
(FRR) district of Manchester. The erection of professional office buildings
was specifically permitted on Molgano's property under Manchester Zoning
Ordinance 6.34 in effect at that time.   Molgano's project, however, was also
subject to Manchester Zoning Ordinance 6.36, the town's interim growth
management bylaw, because of its size and potential impact on the area.  The
ZBA denied Molgano's permit application under the interim zoning bylaw,
concluding that Molgano had failed to demonstrate that (1) the project
satisfied local and state regulations concerning water supply and sanitary
waste disposal, (2) the project would not result in water pollution or cause
an undue impact on air quality, and (3) the project had an adverse effect on
the scenic and natural beauty of the area because the site was over-maximized. 

  In 1988, after receiving a statement of conditions from the Agency of
Natural Resources allowing him to develop wetlands on the site, Molgano
appealed to the Bennington Superior Court.  That court concluded that Molgano
satisfied his burden of proof under the interim zoning bylaw and Zoning
Ordinance 6.32 that water pollution and adverse effects on the scenic and
natural beauty of the area would not occur, but it denied the permit without
prejudice because Molgano had failed to obtain a water and sanitary waste
disposal permit from the proper state authority.  Molgano applied for and
received the water supply and wastewater disposal permit from the Department
of Environmental Conservation in November 1989. 

  In 1990, after Molgano had complied with all applicable town zoning bylaws,
the Manchester Board of Selectmen issued him a permit, subject to conditions,
to erect two, rather than three, professional office buildings.  One of the
conditions was that the permit would expire 

 

two years from its date of issuance, if Molgano had not demonstrated an
intention to proceed with the project.  Molgano was content with the
two-building permit and began negotiation with the Vermont Department of
Environmental Conservation for a permit under Vermont Wetland Rules.  That
permit was obtained on August 21, 1991. 

  In October 1991, after redesigning his project based on the conditions in
his zoning permit and obtaining amended approvals from various agencies to
reflect these changes, Molgano applied to the District #8 Environmental
Commission for an Act 250 permit.  Shortly before Molgano entered the Act 250
process, however, the Town amended Manchester Zoning Ordinance 6.34 to
prohibit the erection of new professional office buildings in the immediate
area of Molgano's property.  Molgano and the Town requested the commission to
limit its review to  6086(a)(10), which requires the proposed development
to conform to any duly adopted local or regional plan.  The commission
concluded that the construction of two professional office buildings in
Manchester did not conform to either the Manchester Town Plan or the Regional
Plan of Bennington County.  Accordingly, the commission denied the permit.
Molgano appealed the commission's decision to the Environmental Board, which
also determined that the proposed project did not conform with either the
Town or Regional plan. 

  Molgano now appeals from the Board's decision, essentially claiming that it
erred by concluding that the zoning bylaws were irrelevant to its
interpretation of the Town Plan and that, had the Board given proper
consideration to those bylaws, the Board would have found that his project
was in conformance with the Town and Regional plans.  We review the issues
raised in the appeal, keeping in mind that the Board's interpretations of Act
250 are treated with a high level of deference and, absent compelling
indication of error, will be sustained on appeal.  In 

 

re Killington, Ltd., 159 Vt. 206, 210, 616 A.2d 241, 244 (1992). 

                                        I.

  In In re Green Peak Estates, 154 Vt. 363, 368-70, 577 A.2d 676, 679 (1990),
we affirmed the denial of an Act 250 permit for failure to conform to a
regional plan because the proposed development violated a specific policy
prohibiting residential development on slopes greater than twenty percent. 
In that case, we specifically avoided decision on whether the Board's
conclusions could be upheld on the basis of "more general, abstract policies
in the plan."  Id. at 370, 577 A.2d  at 679-80. 

  Unlike the regional plan in In re Green Peak Estates, the Manchester Town
Plan contains no specific policy that would prohibit the proposed
development. Section 4.2(2) of the Manchester Town Plan, which refers to the
TCO provides: 

A significant portion of Manchester's economy is based on the tourism
industry. The Transient Commercial zones accommodate certain uses related to
the tourism industry (e.g. motels, inns, restaurants), but care must be taken
to prevent such problems as traffic congestion and the loss of scenic open
space which could occur if an excessive number of these businesses are
permitted.  Consideration should be given to increasing restrictions on
pe[r]mitted uses in the TC zone on Route 7 (north) and to provide for a
restricted TC zone from the Sunderland Town line to the Manchester Village
line.  Consideration should also be given to providing mechanisms for
minimizing any negative impacts of commercial 

 

development in the TC zones and to providing innovative zoning techniques to
facilitate efficient site utilization.  Zoning dimensional requirements
should encourage a relatively low density of development while promoting open
space preservation along the highways. 

Based on this broad, non-regulatory language, the Board determined that the
only permitted transient commercial uses in the district were tourist-related
and that all other uses were prohibited.  We think the Board's conclusion
goes too far.  The plan espouses no specific policy of encouraging tourist
businesses nor any specific policy against other types of commercial
buildings.  The plan only notes existing accommodation of tourist businesses
while advising that care must be taken to preserve open spaces and avoid
traffic congestion in the future.  The only clear intent of the Town Plan is
to limit the effects of excessive numbers of tourist-related businesses, not
limiting business to tourism.  Section 4.2(2) of the Town Plan is, at best,
ambiguous regarding what types of transient commercial uses are included in
the plan. 

  Zoning bylaws are more than strong indications of legislative intent in
determining the meaning of an ambiguous town plan; they are the specific
implementation of the plan.  The Board concluded, however, that zoning bylaws
were irrelevant because the Board was required by statute to determine
whether a project conforms with a town plan, not with zoning bylaws that may
or may not implement a town plan.  Bylaws, however, must conform to the plan
that guides their creation.  A town may not adopt zoning regulations unless
it has adopted a town plan. 24 V.S.A.  4401(a).  The law specifically
requires that zoning bylaws "have the purpose of implementing the [Town]
plan, and shall be in accord with the policies set forth therein." Id.; see
Kalakowski v. John A. Russell Corp., 137 Vt. 219, 225, 401 A.2d 906, 910
(1979) (zoning regulations must reflect town plan).  The plan and zoning
bylaws are drafted and adopted by the same bodies within the town.  See 24
V.S.A.  4384-4385 (plan), and 24 V.S.A.  4403-4404 (zoning bylaws). 

  We have previously defined the relationship between plans and zoning bylaws
that conflict with or only partially implement a plan.  In Smith v. Winhall
Planning Comm'n, 140 Vt. 178, 436 A.2d 760 (1981), a plan provided for
development at a density no greater than one unit per five acres for a
particular area.  The zoning bylaws generally implemented this policy but
allowed one unit per acre in a specific part of the area involved.  In
response to the 

 

argument that the zoning bylaws were invalid for nonconformance with the
plan, this Court stated: 

The regulations as adopted may indeed be inconsistent with the Town Plan, but
the total consistency upon which this argument is predicated is not a legal
requirement.  The plan is a general guideline to the legislative body, an
overall guide to community development.  Partial implementation is not
unusual; the specific implementation is the part adopted in the zoning
regulations.  The regulations control the plan. 

Id. at 183, 436 A.2d  at 762 (citations omitted) (emphasis added).  Further,
we have stated that "[a]lthough the [Town] plan may recommend many desirable
approaches to municipal development, only those provisions incorporated in
the bylaws are legally enforceable." Kalakowski, 137 Vt. at 225-26, 401 A.2d 
at 910.  Because the Board's interpretation would effectively give
non-regulatory abstractions in the Town Plan the legal force of zoning laws,
we agree with Molgano that the Board erred as a matter of law in concluding
that the Town's zoning bylaws were not germane to the meaning of the Town
Plan. 

  The Board also found that Molgano's development was not in conformance with
the Regional Plan.  The Regional Plan is similarly broad and vague and
contains no prohibition on office uses in the area involved.  The Regional
Plan does not contain a specific policy against this type of development as
we found in Green Peak Estates.  In addition, the Board's conclusion that the
project is not a low density use is clearly erroneous given the superior
court's June 2, 1989 conclusions that, even with three buildings,
ninety-three percent of the parcel would have remained open, sixty-three
percent of the parcel would have remained open green space, and that the
project therefore satisfied the interim zoning bylaw's protection of open
land and visual approaches to the town.  The Town Selectmen further
eliminated one building and reduced building coverage of the lot to 4.8% as a
condition of the permit.  Accordingly, we also disagree 

 

with this part of the Board's rationale. 

                                        II.

  The Board went on to note that Manchester Zoning Ordinance 6.34 would
prohibit Molgano's development, if that bylaw were relevant to its
determination of conformance with the Town Plan.  The Board, however, made
this determination based on an amendment to the bylaw that was adopted after
the Town granted Molgano a permit for his project.  Molgano argues that the
Board's reasoning was incorrect because he had a vested right in the earlier
version of the bylaw and in the zoning permit issued under it, and we agree. 
 In In re Preseault, 132 Vt. 471, 474, 321 A.2d 65, 66 (1974), this Court
held that a project's nonconformance with a town plan adopted after a
developer had applied for an Act 250 permit could not be the basis of a
permit denial under 10 V.S.A.  6086(a)(10), the same Act 250 criterion
considered here. We derived that rule from the policy expressed in 1 V.S.A.
 213 which states that "[a]cts of the general assembly, except acts
regulating practice in court, relating to the competency of witnesses or to
amendments of process or pleadings, shall not affect a suit begun or pending
at the time of their passage," and concluded:  "[t]hus the intervening
adoption of a master plan is, by itself, ineffective to derail proceedings
validly brought and pursued in good faith to implement rights available under
previous law."  In re Preseault, 132 Vt. at 474, 321 A.2d  at 66; see also In
re Taft Corners Assocs., 160 Vt. ___, ___, 632 A.2d 649, 655 (1993) (vested
right in town plan in effect at time of original Act 250 umbrella permit);
cf. In re Ross, 151 Vt. 54, 57-58, 557 A.2d 490, 492 (1989) (where no zoning
regulations, and amendment to Town Plan pending, Act 250 application must be
complete for rights under old plan to vest; new applications must comply with
new plans).

 

  This case demonstrates clearly that the Preseault reasoning can be
effectuated only if we go back to the beginning of the development process at
the town level.  Section 6086(a)(10) is silent on when conformance is
measured.  Since the purpose of that section is to ensure consistency with
local planning and zoning, the logical interpretation is to measure
conformance at the time of the local processes. 

  Our zoning decisions support this view.  In Kalakowski, 137 Vt. at 224-25,
401 A.2d  at 910, we stated that people have the right to rely on the "measure
of stability afforded by . . . duly advertised and formally enacted zoning
regulations."  In Smith, 140 Vt. at 181-82, 436 A.2d  at 761, we adopted the
rule that rights vest under regulations existing at the time of filing of a
proper application.  We did so because such a rule: 

is . . . the practical one to administer.  It serves to avoid a great deal,
at least, of extended litigation.  It makes for greater certainty in the law
and its administration.  It avoids much of the protracted maneuvering which
too often characterizes zoning controversies in our communities.  It is, we
feel, the more equitable rule in long run application, especially where no
amendment is pending at the time of the application, as here. 

Id. 

  The Board's analysis in this case would essentially nullify our holding in
Smith v. Windhall Planning Comm'n and allow towns to do in the Act 250
process what they could not do otherwise, i.e., apply changes in zoning laws
retroactively.  Therefore, we hold that where, as here, a developer
diligently pursues a proposal through the local and state permitting
processes before seeking an Act 250 permit, conformance under  6086(a)(10)
is to be measured with regard to zoning laws in effect at the time of a
proper zoning permit application. 

  The object of the zoning law in effect at the time of Molgano's application
was "to provide appropriate locations for limited types of business primarily
serving the motoring 

 

public."  The types of business uses permitted under that purpose were not
limited to tourist uses, as found by the Board.  In fact, hotels, motels, and
lodging houses were only one of ten permitted or conditional uses, not all of
which were tourist-related.  The construction of professional office
buildings was specifically permitted under Manchester Zoning Ordinance 6.34
in effect at the time Molgano applied for a zoning permit. 

  We need not address Molgano's other claims, given our disposition of this
case.   
  
  Reversed. 

                                    FOR THE COURT:

                                    _______________________________
                                    Associate Justice