In re Taft Corners Assocs.

In re Taft Corners Assocs. (99-431); 171 Vt. 135; 758 A.2d 804 

[Filed 11-Aug-2000]


       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. 99-431


In re Appeal of Taft Corners Associates, Inc.	          Supreme Court

                                                          On Appeal from
     	                                                  Environmental Court


                                                          March Term, 2000


Merideth Wright, J.

Stewart H. McConaughy and Norman Williams of Gravel and Shea, Burlington, 
  for Appellant.

Paul S. Gillies of Tarrant, Marks & Gillies, Montpelier, for Appellee.


PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.


       DOOLEY, J.   Taft Corners Associates (TCA) appeals from a decision of
  the environmental  court holding that its subdivision permit from the Town
  of Williston does not give it a vested right to  develop its subdivided
  lots under the provisions of a zoning ordinance in effect when the
  subdivision  permit was issued.  The issue arises because the Town has made
  retail uses conditional uses under  interim zoning rules adopted in 1997,
  and, pursuant to the interim zoning rules, has denied TCA a  permit to
  construct a retail store on one of the lots.  We concur with the
  environmental court that  TCA does not have a vested right to develop the
  lots under the pre-1997 zoning ordinance, and  affirm its grant of partial
  summary judgment to the Town.

       In 1983, TCA purchased two adjoining parcels, comprising 223 acres, in
  the Town of

 

  Williston and, thereafter, applied to the Williston Planning Commission to
  subdivide them into  thirty-seven (now thirty-eight) lots.  When asked what
  uses would be placed on the subdivided lots,  TCA's principal answered that
  they would be mixed uses,"retail and light industrial that would 
  compl[e]ment each other."  The subdivision permit was granted in 1987.  The
  TCA land was in  districts in which mixed uses were permitted at the time. 
  Thereafter, in accordance with the permit,  TCA invested approximately 4.1
  million dollars in infrastructure and impact fees, and over 1.5  million
  dollars more for professional services and related costs.

       By 1991, seven commercial buildings were permitted and built in the
  subdivision.  These had  a total square footage of 250,000 feet, with
  153,756 square feet devoted to industrial uses, 68,163  square feet devoted
  to office uses, and 29,185 square feet devoted to retail uses.  From 1995
  through  1998, the development activity was exclusively for retail uses. 
  Seven more buildings were added,  with a square footage in excess of
  460,000 feet, to house stores for Hannaford (super market), Wal-Mart, Home
  Depot, Toys R Us, PetsMart, Circuit City and an "anchor" store.  Each
  building is  separate and of "box design," that is, with one story and a
  parking lot in front.

       TCA's development plans generated opposition in the Town of Williston,
  and by 1990 the  Town modified its town plan and was considering zoning
  amendments that would restrict retail  development in the districts
  encompassing the TCA subdivision.  In July, 1990, TCA and the Town  entered
  into an agreement, which for five years thereafter allowed TCA to develop
  eleven of its lots,  totaling fewer than forty acres, for retail
  establishments of at least 25,000 square feet per building,  and 10,000
  square feet per tenant.  The agreement was a compromise to accommodate
  TCA's  position that it desired "a vested right to develop the lots in
  Tafts Corner Commercial Park for those  uses which were permitted at the
  time of the subdivision approval" and the Town's position that it 

 

  desired "to have the lots in Taft Corners Commercial Park developed for
  those uses contemplated  under the new plan and proposed new zoning
  regulations."  The agreement expired, and no further  agreement replaced
  it.

       In November 1997, the Town selectboard adopted an interim zoning
  amendment making  retail uses conditional uses in the districts in which
  the TCA subdivision is located.  Under the  amendment, retail uses can be
  permitted only by vote of the Town Selectboard, based on conditional-use
  criteria contained in the amendment.  According to the selectboard, the
  interim zoning  amendment was adopted "to allow breathing room to address
  the enormous impacts the scope and  pace of this retail development was
  having on Williston."

       Although TCA took the position it was not bound by the interim zoning
  regulation because it  had a vested right to develop under the zoning
  regime in place when it received its subdivision  permit, it sought
  conditional-use approval from the selectboard for a 31,940 square foot
  retail  building that would fill in the space between two existing
  buildings on lots 27 and 29, and for a  30,020 square foot retail building
  on lot 26.  The selectboard denied conditional-use approval for  both
  buildings, finding that they "would only exacerbate the very problems
  sought to be addressed  [by the interim zoning amendment]" and were
  inconsistent with the town plan and with the capacity  of town services,
  particularly the police and fire departments.

       TCA appealed to the environmental court which, on the parties'
  cross-motions for partial  summary judgment, ruled that TCA does not have a
  vested right to develop its lots under the zoning  ordinance in effect at
  the time the subdivision permit was granted.  Thus, the court ruled that
  TCA  was properly subject to the conditional-use regulation contained in
  the interim zoning amendment,  and did not have a right to consideration of
  its new retail buildings as permitted uses.  We granted 

 

  interlocutory review of this ruling with respect to lot 26. (FN1)  We have
  before us the single issue  of whether TCA has a vested right to develop
  the lots in its subdivision under the zoning ordinance  as it existed in
  1987, when the subdivision permit was issued.

       We start with the statutory scheme.  The Vermont Planning and
  Development Act authorizes  two major types of bylaws to regulate land
  development within a municipality: zoning regulations  and subdivision
  regulations.  See 24 V.S.A. § 4401(b)(1) & (2).  Subdivision regulations
  set forth the  "procedures, requirements and specifications" for the
  subdivision of land and the filing of plats  displaying the subdivided
  land.  Id. § 4401(b)(2).  In this context, the subdivision of land means
  the  division of a parcel of land into two or more parcels.  See In re
  Lowe, 164 Vt. 168, 169, 666 A.2d 1178, 1179 (1995).  The municipality can
  authorize its planning commission to "approve, modify or  disapprove all
  plats of land." (FN2)  24 V.S.A. § 4401(b)(2).  In addition to procedures
  and  requirements for submission and processing of plats, subdivision
  regulations must provide  "[s]tandards for the design and layout of
  streets, curbs, gutters, street lights, fire hydrants, shade  trees, water,
  sewage and drainage facilities, public utilities and other necessary public 
  improvements."  Id. § 4413(a)(2).  They may also provide "development
  standards to promote the  conservation of energy or to permit the
  utilization of renewable energy resources or both."  Id. §  4413(c).  The
  planning commission has considerable discretion in acting on proposed
  plats.  It can 

 

  waive or vary standards which, in its judgment, are not requisite to the
  public health, safety or  general welfare for a particular plat or plats or
  "are inappropriate because of inadequacy or lack of  connecting
  facilities."  Id. § 4413(b).  The statute also allows the planning
  commission to condition  approval of a plat on any of six conditions.  For
  purposes of this decision only one condition is  significant: "where zoning
  regulations are in effect, the plots shown on said plat will at least
  comply  with the requirements thereof."  Id. § 4417(2).

       The purpose of zoning regulations is to "permit, prohibit, restrict,
  regulate, and determine  land development."  Id. § 4401(b)(1).  Land
  development includes "the division of a parcel into two  or more parcels,
  the construction, reconstruction, conversion, structural alteration,
  relocation or  enlargement of any building or other structure or . . . any
  change in the use of any building or other  structure, or land, or
  extension of use of land."  Id. § 4303(3).  Zoning regulations may
  regulate:  "specific uses of land;" "[d]imensions, location, erection,
  construction, repair, maintenance,  alteration, razing, removal and use of
  structures;" "[a]reas and dimensions of land . . . to be occupied  by uses
  and structures, as well as areas . . . to be left unoccupied by uses and
  structures;" and  "[d]ensity of population and intensity of use."  Id. §
  4401(b)(1).

       There is some overlap between zoning and subdivision regulation
  because the definition of  "land development" for purposes of zoning
  regulation includes the division of parcels, the trigger for  subdivision
  regulation. (FN3)  See In re Lowe, 164 Vt. at 168, 666 A.2d  at 1179;
  Drumheller v.  Shelburne Zoning Bd., 155 Vt. 524, 528-29, 586 A.2d 1150,
  1152 (1990).  A municipality may use 

 

  zoning regulations to perform at least some of the functions of subdivision
  regulations.

       In any case where a landowner is both dividing a parcel into smaller
  ones and developing  those smaller parcels, he or she will need both a
  subdivision permit and a zoning permit.  The  subdivision permit will allow
  the owner to divide the land and create the infrastructure.  The zoning 
  permit will allow the landowner to develop the parcels by placing one or
  more structures on them.  It  is undisputed that TCA needed a subdivision
  permit to create the Tafts Corner Commercial Park.  It  is also undisputed
  that TCA needs a zoning permit for each lot it develops in the park.

       With this background in mind, we look to our jurisprudence on vested
  rights.  Our leading  case is Smith v. Winhall Planning Comm'n, 140 Vt.
  178, 436 A.2d 760 (1981), in which a developer  proposed to subdivide a
  tract of land into nine residential lots, each larger than one acre, but
  smaller  than five acres.  At the time, the town was proposing to adopt an
  amendment to its zoning ordinance  to require that all residential lots be
  at least five acres in size.  In anticipation of the amendment, the 
  planning commission denied the subdivision permit, and the developer
  appealed to the trial court.  In  the meantime, the town adopted the zoning
  amendment and asserted that the new ordinance  prohibited the development. 
  This Court disagreed, adopting the minority rule "vesting rights under  the
  then existing regulations as of the time when proper application is filed." 
  Id. at 181-82, 436 A.2d   at 761.

       TCA argues that this case fits the holding and rationale of Smith. 
  Because the holding of  Smith was that the landowner's subdivision permit
  must be governed by the zoning ordinance in  effect when the subdivision
  application was submitted, TCA argues that it also has a vested right to 
  be governed by the zoning ordinance in effect in 1987, when it received its
  subdivision permit.  Only  this rule, it argues, protects its investment in
  the subdivision and produces the regulatory certainty 

 

  that Smith sought to accomplish.

       This is, however, a very different case than Smith.  In Smith, the
  issue was whether the  landowner could obtain a subdivision permit despite
  an adverse change in the regulatory law  between the date of application
  and the date of decision.  Here, the permit in issue is a zoning permit, 
  not a subdivision permit, and the landowner applied for this permit after
  the adverse regulatory  change.  Although the landowner did receive a
  subdivision permit, no issue of conformance with the  zoning regulation
  arose in that process, and the landowner was never denied the subdivision
  permit  at any stage of the process.

       We have no doubt that a subdivision application creates a vested right
  that the subdivision  permit be evaluated under the regulatory law in
  effect at the time of the application.  That is the  holding of Smith, and
  it is not under debate in this case.  What TCA seeks, however, is a vested
  right  that a separate zoning permit will be evaluated under the regulatory
  law in effect at the time of the  application for the subdivision permit,
  (FN4) and not that in effect at the time of the zoning permit  application. 
  We can understand this position if the legality of the act of dividing the
  parcel of land  necessarily depends upon a specific provision of the zoning
  ordinance, and that zoning ordinance  provision was amended before the
  zoning permit was sought.  Thus, if the developer in Smith had  been
  awarded a subdivision permit despite the fact that his lots were
  undersized, but had been denied  a zoning permit because of the size of the
  lots, he should have had a vested right to the zoning permit  provided he
  met all other zoning requirements.  See Stucker v. Summit County, 870 P.2d 283, 288 

 

  (Utah Ct. App. 1994) ("Some courts have recognized that the filing of a
  subdivision plat gives a  vested right to individual lot owners as to the
  lots' size.").  Beyond this narrow circumstance,  however, we believe TCA's
  position represents an unwarranted and unprecedented expansion of our 
  vested rights jurisprudence.  See L.M. Everhart Constr. Co. v. Jefferson
  County Planning Comm'n, 2 F.3d 48, 52 (4th Cir. 1993) ("no court . . . has
  adopted such a broad conception of vested rights").

       TCA argues that vested rights jurisprudence should extend to the
  zoning permit process  because subdivision review necessarily addressed
  compliance of the subdivision with the zoning  ordinance and TCA disclosed
  how it would use the land during subdivision review.  The latter  assertion
  is, at best, an exaggeration; the former is not an accurate statement of
  Vermont's land use  regulatory process.

       The only evidence during subdivision review of expected uses within
  the TCA subdivision  was the statement of its principal that he would "like
  a mixed use in there with retail and industrial  that would complement each
  other."  Since these uses were allowed by the zoning ordinance, this  was
  little more than a statement that TCA would like to comply with the
  ordinance.  It did not limit  the uses, and no subdivision permit condition
  mentioned the uses to which any lot in the property  would be put.  See In
  re Stowe Club Highlands, 164 Vt. 272, 276, 668 A.2d 1271, 1274-75 (1995) 
  (representations made in subdivision review not legally binding unless
  placed in permit conditions).

       For the proposition that vested-rights jurisprudence should extend to
  the zoning-permit  process, TCA cites the statute authorizing the planning
  commission to require that the plat comply  with zoning requirements.  See
  24 V.S.A. § 4417(2).  Consistent with that argument, TCA submitted  to the
  environmental court an affidavit of the former chair of the Williston
  Planning Commission to  the effect that, during subdivision review, a
  commission must look at compliance with a town plan 

 

  and zoning regulations so that:

     The Planning Commission would not have approved TCA's 
     subdivision application if TCA had proposed uses which were not in 
     conformance with the Comprehensive plan or were not permitted by 
     the zoning regulations in effect at the time.

  We do not have to decide whether a planning commission ever has the power
  to deny a subdivision  permit because the uses proposed for it are not
  authorized by the zoning ordinance.  It is sufficient to  say that
  subdivision review is not intended to police prospective uses of the
  subdivided lots.  No  subdivider is required to specify what uses will be
  placed on the subdivided lots, and the act of  subdivision does not
  restrict those uses.  Indeed, there is no requirement that the subdivider
  know  what uses will be placed on those lots.  Consistent with the proper
  role of subdivision review, TCA's  principal spoke only of what he would
  "like" for uses, and then only in the broadest and vaguest  terms.

       By describing a limited role for subdivision review, we do not render
  nugatory the power of  the planning commission to require compliance with
  the zoning ordinance.  For example, a planning  commission might deny a
  subdivision permit because the subdivided lots would be too small to be 
  lawfully developed within the zoning district in which they lie. 
  Similarly, it might decide that no  realistic development could comply with
  setback requirements or lot coverage limits in the zoning  ordinance.  In
  rendering these rulings, it would rely on its power to ensure compliance
  with the  zoning ordinance as set out in § 4417(2).

       TCA also argues that we decided vesting can extend to other permits in
  In re Molgano, 163  Vt. 25, 653 A.2d 772 (1994), an Act 250 state land-use
  permit case.  In Molgano, we decided that  conformance with a town plan, an
  Act 250 requirement, should be measured as of the start of the 
 


  development process in the town for consistency of local zoning or
  subdivision review with Act 250  review.  Id. at 33, 653 A.2d at 776-77;
  see also In re Tafts Corners Assocs., 160 Vt. 583, 593-94, 632 A.2d 649,
  654 (1993) (once developer obtains umbrella Act 250 permit, Environmental
  Board may  not deny amendments on basis that development does not comply
  with town plan at time amendment  sought, as long as it complied with town
  plan when umbrella permit was issued).  Molgano was  decided as a matter of
  construction of Act 250 with respect to conformance with the town plan.  We 
  reasoned that since on this criteria Act 250 was reviewing conformance with
  local requirements, it  should be in sync with local regulatory review by
  using the same version of the plan under which  such local review was
  conducted.  Molgano, 163 Vt. at 32, 653 A.2d  at 776.  We do not believe
  that  the policy that must apply to parallel state (Act 250) and local
  (subdivision) review should  necessarily govern the distinct and separate
  local review processes of subdivision permitting and  zoning permitting.

       Indeed, if there is an analogous situation in Act 250 review, it is
  shown by In re Ross, 151 Vt.  54, 557 A.2d 490 (1989), in which the
  landowner submitted a general and sketchy Act 250  application solely to
  protect itself against an amendment to the town plan that would set limits
  on the  density of development below those acceptable to the landowner. 
  When the original application was  denied as incomplete and the town
  amended its plan to reduce the allowable development density,  the
  landowner submitted a complete application at a higher density claiming a
  vested right because  of the earlier application.  We upheld the
  Environmental Board's denial of the application holding  that no rights
  vested under a proposal to develop with "inadequate specificity."  Id. at
  56, 557 A.2d  at  491.

       Here, TCA seeks a vested right to develop under the zoning ordinance
  in force when it began 

 

  subdivision review, based only on a general statement that it wanted to
  have mixed retail and light  industrial uses.  As we noted earlier, this
  lack of specificity was sufficient for subdivision review  because that
  step in the development process is not intended to look at proposed uses. 
  We do not  believe it can or should be sufficient to control the regulatory
  process when it does reach the stage of  evaluating the uses proposed by
  the landowner.

       Finally, TCA argues that it should have a vested right created by the
  subdivision permit  because it invested millions of dollars in the
  infrastructure required by the subdivision and in  professional services. 
  We expressly adopted the "minority rule" in Smith to create a bright line, 
  allowing identification of when rights vest without having to consider the
  extent to which the  landowner has made investments and taken actions in
  reliance on the permit.  See Smith, 140 Vt. at  181-82, 436 A.2d  at 761. 
  For this reason, we find irrelevant to our decision the extent to which TCA 
  has invested in its subdivision relying on its right to develop its lots
  for retail uses.  Even if we were  to consider such evidence, we do not
  believe we have a sufficient showing of it here.  TCA has  offered evidence
  of its expenses, but no evidence of the profits that it has made from the
  existing  developed lots or a comparison of its ability to earn profits if
  the remaining lots are developed with  industrial uses.  

       In the absence of specific legislative direction, our vested rights
  principles must be based on a  balance of the competing interests.  The
  landowner's interests are not so strong that they mandate a  vesting rule
  allowing a subdivision application or permit to vest rights with respect to
  a separate  zoning permit.  On the other hand, we find interests of the
  municipality and its citizens weigh heavily  against such a vesting rule.

 

       TCA's subdivision application began in 1984, the year in which its
  principal made the  statement about intended uses in the subdivision.  It
  applied for the zoning permit at issue here in  1998, some fourteen years
  later.  At that time, less than half of the subdivided lots had been 
  developed.  Its legal theory would give it the right to develop the
  remainder of those lots at any time  in the future, but under 1984 zoning
  rules suited to the Town's land-use goals and realities at that  time.  To
  adopt TCA's vested rights theory would strip the Town of the ability to
  modify its land-use  policies in response to population growth and
  urbanization.

       We agree with the analysis of the California Supreme Court in Avco
  Community Developers,  Inc. v. South Coast Reg'l Comm'n, 553 P.2d 546, 554
  (Cal. 1976):

    If we were to accept the premise that the construction of
    subdivision  improvements or the zoning of the land for a planned
    community are  sufficient to afford a developer a vested right to
    construct buildings  on the land in accordance with the laws in
    effect at the time the  improvements are made or the zoning
    enacted, there could be serious  impairment of the government's
    right to control land use policy. . . .  Thus tracts or lots in
    tracts which had been subdivided decades ago . .  . could be free
    of all zoning laws enacted subsequent to the time of  the
    subdivision improvement.

  We believe that the situation created by the rule TCA seeks would be
  unworkable.  As Vermont has  gone from a rural state, with large tracts of
  land devoted to farming, forestry or like uses, to a more  urbanized state,
  much of its land has been subdivided to accommodate residential, commercial
  and  industrial development.  Under TCA's theory, every subdivision is
  subject only to the zoning laws  applicable when the subdivision was
  sought, and not to any subsequent amendment or modification  of those laws. 
  The result would be an uncontrollable patchwork of land use rules that
  would defy  rational policy-making or implementation.

 

       Thus, even in the absence of Smith's bright-line rule, the balance of
  competing policy  interests would be against giving holders of subdivision
  permits vested rights to zoning permits  under the zoning ordinance
  applicable when the subdivision permit was sought or obtained.

       Affirmed.

                                       FOR THE COURT:


                                       _______________________________________
                                       Associate Justice



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                                  Footnotes


FN1.  TCA also appealed the ruling with respect to lots 27 and 29, but
  settled their dispute over  these lots with the Town and obtained a remand
  for entry of an order implementing the settlement in  the environmental
  court.

FN2.  By a 1995 amendment to the Vermont Planning and Development Act, a
  municipality may  merge its zoning and planning functions into one
  development review board.  See 24 V.S.A. § 4461.  In the text, we have
  described the functions of the more familiar planning commissions and
  zoning  boards of adjustment, which continue to exist in most communities. 

FN3.  There is greater overlap in planned residential and planned unit
  developments, in which the  planning commission may vary requirements of
  the zoning ordinance.  See 24 V.S.A. §§ 4407(3),  (12).  We do not consider
  the application of vested rights in such developments.

FN4.  TCA has framed its argument claiming the issuance of, and not the
  application for, the  subdivision permit creates the vested rights.  Under
  Smith, the point of vesting for purposes of the  subdivision permit is the
  date of application.  We see no reason why a different point in the process 
  would be adopted for purposes of the zoning permit.