In re 232511 Investments, Ltd.

In re 232511 Investments, Ltd. (2005-183); 179 Vt. 409; 898 A.2d 109

2006 VT 27

[Filed 07-Apr-2006]


       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.


                                 2006 VT 27

                                No. 2005-183


  In re Appeal of 232511 Investments, Ltd. 
  d/b/a Stowe Highlands                          SupremeCourt

                                                 On Appeal from
                                                 Environmental Court

                                                 January Term, 2006

                                                 Thomas S. Durkin, J.


  Harold B. Stevens of Stevens Law Office, Stowe, for
    Appellant/Cross-Appellee.

  Leighton C. Detora, Pro Se, Barre, Appellant. 

  Amanda S. E. Lafferty of Stitzel, Page & Fletcher, P.C., Burlington, for
    Appellee.


  PRESENT:  Reiber, C.J., Johnson, Skoglund and Burgess, JJ., and 
            Allen, C.J. (Ret.),  Specially Assigned

        
       ¶  1.  JOHNSON, J.  Appellant 232511 Investments, Ltd., doing business
  as Stowe Highlands (Stowe Highlands), appeals the Environmental Court's
  grant of summary judgment, which upheld a decision of the Town of Stowe's
  Development Review Board (FN1) denying Stowe Highlands' application to
  amend its permit for a Resort Planned Unit Development (Resort PUD).  Stowe
  Highlands argues that both the Board and the Environmental Court erred in
  refusing to allow construction of fourteen clustered houses in place of a
  hotel.  Cross-appellant Leighton Detora appeals from the Environmental
  Court's reversal of a decision of the Board that required all owners of
  property within the Stowe Club to be included as co-applicants for a permit
  to convert the Resort PUD to a Planned Residential Development (PRD).  We
  affirm in part.

       ¶  2.  Stowe Highlands owns a portion of a 236-acre planned
  development in the Town of Stowe, known as the Stowe Club.  The Stowe Club
  is located in an area zoned Agricultural and Rural Residential 3 (RR3),
  which allows for Resort PUDs as conditional uses.  In 1985, the Town
  granted then-owner Nolex Corporation a Resort PUD permit for the Stowe
  Club, allowing it to construct a planned development consisting of
  seventy-eight residential units and a 100-unit hotel.  Since 1985,
  ownership of the Stowe Club has changed hands many times, and plans for
  development have undergone numerous revisions.  Stowe Highlands and its
  predecessors have received permits for and built a number of residential
  housing units, many of which were sold to individual homeowners.  Although
  Parcel 1 of the Stowe Club has been specifically permitted and reserved for
  a hotel and other associated commercial uses, it remains undeveloped.
   
       ¶  3.  In 2003, Stowe Highlands applied for an amendment to its
  Resort PUD permit to allow it to abandon plans to build a hotel and,
  instead, to construct eighteen clustered houses on the 24.3-acre parcel of
  land comprised of Parcel 1 and Lots 21-23 (hereinafter Parcel 1).  After a
  public hearing, Stowe Highlands amended its proposal to include only
  fourteen clustered houses.  Public hearings were held on the new proposal,
  and in May 2004, the Board issued a decision denying Stowe Highlands'
  application to amend its Resort PUD permit.  The Board emphasized that the
  permit for the Resort PUD was issued, amended, and developed with the
  understanding that the Stowe Club would include some kind of resort.  It
  concluded that if Stowe Highlands wished to abandon the resort, it would
  need to either change the entire 236-acre property from a Resort PUD to a
  PRD, or, in the alternative, develop the property as a residential
  development subject to RR3 district requirements.  The Board then stated
  that if Stowe Highlands were to pursue a PRD designation, it would need to
  include all other property owners within the Stowe Club as co-applicants
  for the permit. 

       ¶  4.  Stowe Highlands appealed the Board's decision to the
  Environmental Court and moved for summary judgment.  The Town opposed the
  motion and filed its own cross-motion for summary judgment.  On April 26,
  2005, the Environmental Court granted summary judgment in favor of the
  Town.  It held that the regulatory scheme for a Resort PUD required some
  kind of inn or hotel as a "necessary component" of the development.  The
  court further held that recorded plans showing a hotel on Parcel 1 made the
  hotel a condition of the Resort PUD permit.  It also held that if Stowe
  Highlands wanted to build clustered residential units in place of the
  hotel, it would need to apply for a conditional-use permit to develop the
  entire 236-acre property as a PRD.  Finally, the court held that other
  property owners within the Resort PUD need not be co-applicants in the
  event that Stowe Highlands applies to amend its permit from a Resort PUD to
  a PRD.
        
       ¶  5.  As a preliminary matter, Stowe Highlands contends that the Town
  does not have standing in this appeal.  This argument is without merit. 
  Vermont's municipal planning statute allows an "interested person" to
  appeal the Board's decision to the Environmental Court.  24 V.S.A. § 4471. 
  The definition of an "interested person" includes "[t]he municipality in
  which the plan or a bylaw of which is at issue in an appeal brought under
  this chapter."  24 V.S.A. § 4464(b)(2). (FN2)  We have previously held that
  "[m]unicipalities in Vermont have a limited right to appeal the decisions
  of their zoning boards; the town plan or a municipal bylaw must be at issue
  in the case."  Sabourin v. Town of Essex, 146 Vt. 419, 420, 505 A.2d 669,
  670 (1985).  Although a town is not allowed to challenge the wisdom of a
  zoning decision, it may challenge a board decision that interprets one of
  the town's bylaws.  Rossetti v. Chittenden County Transp. Auth., 165 Vt.
  61, 66, 674 A.2d 1284, 1287 (1996) (citing Sabourin, 146 Vt. at 420-21, 505
  A.2d at 670).  The Board based its denial of Stowe Highlands' application
  on an interpretation of the Town's zoning regulations relating to Resort
  PUDs.  Stowe Highlands challenged that interpretation, thereby placing the
  meaning of the regulation at issue.  The Town has not addressed the wisdom
  of the Board's decision, only its interpretation of the regulations. 
  Therefore, if the Town were appealing the Board's decision, it would have
  standing, and it certainly has standing to defend the decision on appeal.
                     
        ¶  6.  Stowe Highlands raises three issues on the merits.  First, it
  argues that the Environmental Court erred in holding that the Town's zoning
  regulations require a Resort PUD to include a lodging facility.  Second, it
  argues that the court erred in concluding that a permit condition or
  approved site plan required the Resort PUD to include a hotel.  Finally,
  Stowe Highlands argues that the court erred in concluding that it had to
  amend the Resort PUD to a PRD to replace the hotel with clustered housing. 
  Cross-appellant Detora argues that for Stowe Highlands to convert the
  Resort PUD to a PRD, all other landowners within the Stowe Club must be
  included as co-applicants.  Because this latter issue was not properly
  before the Board or the Environmental Court, we do not reach it on appeal. 

       ¶  7.  Stowe Highlands first argues that the Town's zoning regulations
  do not require a Resort PUD to include a lodging facility.  It argues that
  the regulations are merely permissive, and as such, allow Stowe Highlands
  to build a hotel in the Resort PUD, but do not require it to do so.  We
  review of zoning ordinances according to the general rules of statutory
  construction.  In re Casella Waste Mgmt., Inc., 2003 VT 49, ¶ 6, 175 Vt.
  335, 830 A.2d 60.  "We first construe words according to their plain and
  ordinary meaning, giving effect to the whole and every part of the
  ordinance."  In re Stowe Club Highlands, 164 Vt. 272, 279, 668 A.2d 1271,
  1276 (1995).  We will affirm the Environmental Court's interpretation of a
  zoning ordinance unless it is clearly erroneous, arbitrary or capricious. 
  In re Weeks, 167 Vt. 551, 554, 712 A.2d 907, 909 (1998).  "[T]he paramount
  function of the court is to give effect to the legislative intent." 
  Lubinsky v. Fair Haven Zoning Bd., 148 Vt. 47, 49, 527 A.2d 227, 228
  (1986). 
   
       ¶  8.  The Town's zoning regulations describe the purpose of a
  Resort PUD as follows: "To allow a large resort, being a self-contained
  complex insulated from and not intruding on surrounding areas, to be
  developed for the purpose of providing housing, recreation and services for
  its transient guests and other allowed uses."  Town of Stowe, Zoning
  Regulations § 18.3 (2002) [hereinafter Stowe Zoning Regulations].  If read
  in isolation, § 18.3 could support the position advanced by Stowe
  Highlands, in which the use of the word "allow" at the beginning of the
  sentence could be understood as permissive.  This line of reasoning fails,
  however, when the regulation is examined in context.  Stowe Highlands
  places undue emphasis on the first part of § 18.3 while ignoring the last. 
  It would have us stop reading at the word "resort," ignoring the fact that
  a Resort PUD is intended to provide "housing, recreation and services for
  its transient guests and other allowed uses."  Id.  Without a resort, the
  Stowe Club could not provide recreation opportunities or services, nor
  could it accommodate transient guests.  Thus, § 18.3, on its own, is
  ambiguous as to whether a resort is a necessary component of a Resort PUD. 

       ¶  9.  That ambiguity is alleviated, however, when § 18.3 is read
  together with the rest of the Town's zoning regulations.  Section 18 deals
  generally with Planned Unit Development (PUD), and sets forth the purposes,
  requirements, and types of PUDs authorized in Stowe.  Among other things,
  PUDs are intended "[t]o integrate productive uses related to tourism and
  recreation," and "[t]o add to business and employment opportunities and the
  economic base of the community."  Stowe Zoning Regulations § 18(3)-(4). 
  This language demonstrates the intent of the drafters that PUDs include a
  mix of uses.  Residential development plays an integral role as part of a
  PUD.  Permitting residential development to the exclusion of other uses,
  however, defeats the combined purposes of providing business opportunities
  and integrating them with other uses within the PUD. 
   
       ¶  10.  The Town's zoning regulations expressly contemplate the type
  of residential development proposed by Stowe Highlands.  Section 17
  provides for clustered housing in PRDs to "integrate housing of various
  types into a harmonious grouping and to facilitate adequate and economical
  provision for streets and utilities."  Stowe Zoning Regulations § 17. 
  Stowe Highlands argues that PRDs are simply a subset of uses allowed within
  the more stringent requirements of a Resort PUD.  This argument, however,
  focuses exclusively on the quantitative differences between the two types
  of development without taking into consideration the qualitative
  differences.  Although clustered houses may have a lesser overall impact on
  the area than a hotel, restricting the inquiry to the issue of impact
  oversimplifies the nature of the Board's planning and review functions.  

       ¶  11.  Planned unit development is intended, in part, "to merge
  zoning and subdivision requirements."  In re Stowe Club Highlands, 164 Vt.
  at 276, 668 A.2d  at 1275.  When reviewing an application for a
  conditional-use permit, the Board must consider not only the capacity of
  the existing infrastructure, but also the "character of the area affected." 
  Stowe Zoning Regulations § 4.7(2)(A).  When reviewing an application for a
  subdivision permit, the Planning Commission must be satisfied that the
  character of the land is suitable for its intended purposes.  Town of
  Stowe, Subdivision Regulations § 5.1(1) (2002).  "In addition, subdivision
  plats should be in general accordance with Stowe's Municipal Plan."  Id. 
  When viewed as a whole, the Town's zoning and subdivision regulations
  require the Board to look beyond the level of impact a project will have on
  the land and infrastructure.  The regulations require the Board to examine
  the proposed development in terms of its compatibility with the character
  of the land and its consistency with the municipal plan.  Thus, the Board
  must look at the qualitative aspects of the proposal. 

       ¶  12.  When reviewing the merits of a proposal, the Board may decide
  that a certain area is suited to mixed-use development and another is not. 
  Considering the project in light of the municipal plan and the character of
  the area, the Board may have legitimate reasons to approve a mixed-use
  Resort PUD in an area of Stowe where it would deny a single-use PRD.  With
  respect to their eventual uses, the two forms of development are
  fundamentally different, carrying with them different implications for the
  specific area and for the town as a whole.  Failing to require a resort as
  part of a Resort PUD would strip the Resort PUD designation of its value as
  a tool for land-use planning.  Accordingly, we affirm the Environmental
  Court's ruling upholding the Board's decision.
   
       ¶  13.  This conclusion disposes of Stowe Highlands' next argument,
  which is that the Environmental Court erred in concluding that a hotel was
  required by a permit condition or approved site plan.  We have recognized
  the distinction between discretionary permit conditions, which must be
  expressly stated, and minimum legal requirements of a specific land use
  designation, which need not be expressly stated.  See In re Stowe Club
  Highlands, 164 Vt. at 276, 668 A.2d  at 1274 ("[T]here is no requirement
  that the zoning board explicitly state that the landowner must comply with
  the law or detail all the applicable legal requirements.").  Because a
  resort is a minimum legal requirement of a Resort PUD, the Board did not
  need to identify the resort as a condition of the initial permit.

       ¶  14.  Stowe Highlands' third argument is that even if its original
  permit required a resort, it should be allowed to construct fourteen
  clustered houses instead of a hotel without seeking a new permit.  It
  argues that because clustered residential development is a conditional use
  allowed in a PUD, its current plans are permissible under a Resort PUD
  permit.  In deciding this issue, we consider not just the 24.3-acre Parcel
  1, but the entire 236-acre parcel. (FN3)  Stowe Highlands' most recent
  proposal forecloses the possibility that the development will include a
  resort.  We have held above that without the resort, the development would
  no longer meet the requirements of a Resort PUD.  We thus conclude that
  Stowe Highlands may not proceed with its proposed development under its
  current permit.                                   
   
       ¶  15.  Inevitably, conditions will change over the course of a
  long-term development project like the Stowe Club.  This does not mean,
  however, that the developer may respond by unilaterally changing the nature
  of the project.  Towns could not achieve any of the goals of planned
  development if not for continued oversight of long-term projects.  See
  Frankland v. City of Lake Oswego, 517 P.2d 1042, 1047 (Or. 1973) ("[W]hile
  the primary benefits of a PUD ordinance are flexibility in design and
  improved development and use of land areas, these objectives can be secured
  only if the planning authority retains its control by, at a minimum,
  overseeing and approving general development plans of a developer.").  A
  Resort PUD permit does not carry with it implied authorization for a
  developer to alter its plans to construct what amounts to a single-use PRD
  where its permit contemplates a mixed-use Resort PUD.  Such a broad and
  indefinite conception of the land-use permitting process places too much
  discretion in the hands of developers and could undercut the Board's
  ability to perform its planning functions.

       ¶  16.  A Minnesota court came to a similar conclusion in Yeh v.
  County of Cass, 696 N.W.2d 115 (Minn. Ct. App. 2005).  In Yeh, a developer
  sought to expand a "commercial PUD" by constructing numerous residences,
  while retaining the minimum number of rental units to qualify as a
  "resort," and therefore commercial, under the relevant ordinance.  Id. at
  127.  The court held that "[b]ecause [the development] was previously a
  commercial resort, and appellant's PUD is residential, appellant is not
  entitled to proceed over-the-counter and without public oversight."  Id. at
  129.  Much like the developer in Yeh, Stowe Highlands seeks to avoid public
  oversight and proceed "over-the-counter" with its new and fundamentally
  different proposal.  We agree with the Environmental Court's decision not
  to allow Stowe Highlands to proceed without first receiving the Board's
  approval.
   
       ¶  17.  Finally, both the Board and the Environmental Court noted
  that one means by which Stowe Highlands could proceed with its proposed
  development would be to amend the entire Resort PUD to a PRD. 
  Cross-Appellant Detora argues that for Stowe Highlands to change its permit
  from Resort PUD to PRD, it needs all other landowners within the Stowe Club
  to appear as co-applicants.  We decline to address this issue because it is
  not properly before us. 

       ¶  18.  The Board concluded that for Stowe Highlands to abandon
  development of the Stowe Club as a Resort PUD, it would have to remove the
  property from the classification of planned development or, in the
  alternative, seek approval from the Board to convert it to a PRD.  The
  Board then stated that if Stowe Highlands were to abandon the Resort PUD
  designation, it would need all property owners within the Stowe Club to be
  co-applicants to the change.  While this statement may have been helpful in
  alerting Stowe Highlands and Detora to issues likely to arise if Stowe
  Highlands applied to amend the designation of the Stowe Club from a Resort
  PUD to a PRD, Stowe Highlands did not actually file such an application. 
  As a result, the Board's statement with respect to co-applicants lacked the
  support of a properly developed factual record and had no effect on the
  application before it. (FN4)  The Environmental Court's ruling disagreeing
  with the Board's statement was thus premature, and the issue presented on
  appeal is not ripe for review.       
   
       ¶  19.  We must have an actual case or controversy before us to
  render a decision.  Parker v. Town of Milton, 169 Vt. 74, 77, 726 A.2d 477,
  480 (1998).  Until Stowe Highlands seeks to amend its permit from a Resort
  PUD to a PRD, the question of whether it must include co-applicants is
  hypothetical, and any conclusion we might reach would be advisory.  See In
  re Bennington Sch., Inc., 2004 VT 6, ¶¶ 18-19, 176 Vt. 584, 845 A.2d 332 (mem.) (refusing to render an opinion as to whether a hypothetical
  student housing proposal, which had not actually been presented to the
  zoning board, would require a conditional use permit).  "Such purely
  advisory opinions are outside our jurisdictional power."  Id. ¶ 19.
  Affirmed in part.  The Environmental Court's ruling that Stowe Highlands
  need not include co-applicants in an application to amend its permit is
  vacated.




                                       FOR THE COURT:



                                       _______________________________________
                                       Associate Justice



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                                  Footnotes


FN1.  Over the course of the Stowe Club project, the development review
  functions of the Planning Commission and the Zoning Board of Adjustment
  have been consolidated in the Development Review Board.  Throughout this
  decision, "Board" refers collectively to the Zoning Board of Adjustment and
  the Development Review Board.

FN2.  Effective July 1, 2004, 24 V.S.A. § 4464(b)(2) was amended so that the
  relevant language of § 4464(b)(2) now falls under § 4465(b)(2), in nearly
  identical form. 2004, No. 115, § 106. We will refer to the statute in
  effect at the time of the Board's decision.

FN3.  The Resort PUD regulations require residential dwelling units to meet
  the minimum lot size requirements of the zone in which it is located. 
  Stowe Zoning Regulations § 18.3(1)(E).  In the RR3 zone, that minimum lot
  requirement is three acres per unit.  Id. § 6.5(2).  Thus, taking into
  account only the 24.3-acre Parcel 1, Stowe Highlands would be allowed to
  build only eight residential units.  In its plan to build fourteen
  residential units, Stowe Highlands relies on available density units from
  the rest of the Resort PUD.  Thus, the density of proposed clustered
  housing on Parcel 1 is inextricably linked to that of the entire 236-acre
  Stowe Club.

FN4.  Stowe Highlands rests its challenge to the Board's requirement of
  co-applicants on the effect of documents not presented to the Board, not
  considered by the Environmental Court, and not available to us now.  These
  documents appear to be the subject of separate litigation.  Stowe Highlands
  v. Stowe Club Owners Assoc., Inc., 248-11-04 Lecv.  We decline to speculate
  as to how these documents might affect a hypothetical permit application.