The ordinance for the City of Greensboro provided: "If it shall be made to appear to the tax collector and the tax collector shall determine that any licensee or applicant for a [privilege] license is conducting or desires to conduct a business activity pursuant to his privilege license which activity would be in violation of any provision of [the City’s zoning ordinance] with respect to permitted and prohibited uses . . . he shall (1) Refuse to issue a license to such applicant and so notify him in writing." The tax collector visited Fantasy World and determined that the business was a sexually oriented business as defined by the City’s ordinance. He also ordered that the business was in violation of the City’s zoning requirement that sexually oriented businesses be at least 1200 feet apart since their was another sexually oriented business under the same roof with the doors only 90 feet apart. Accordingly, the tax collector denied Fantasy World’s request for a privilege license.

Fantasy World appealed to the Board of Adjustment, in accordance with the ordinance and the Board of Adjustment upheld the tax collector’s determination that the business was in violation of the City’s zoning and affirmed the denial of the business privilege license. Fantasy World appealed to superior court pursuant to a writ of certiorari and the Superior Court affirmed. Fantasy World then appealed to the Court of Appeals.

Affirming the lower court, the Court of Appeals rejected Fantasy World’s argument that the City lacked authority to deny it a privilege license based on zoning determinations made by the tax collector. As the court explained, it is appropriate for a municipal taxing authority to require one applying for a privilege license to show that they are in compliance with city law. It found that as a part of the administration of the privilege license tax, a city may require an applicant to submit documentation from the city zoning department, permit the taxing authority to refer questions to zoning officials, or to provide that the taxing authority can make inquiries itself regarding zoning compliance.

In Greensboro, the City’s charter provided that zoning compliance assessment could be designated to the tax collector and the Court held that there was no problem with consolidating the privileges license tax administration and zoning administration. The Court rejected Fantasy World’s claims that denial of a privilege license was not a valid remedy for enforcing local zoning ordinances explaining, "the denial of a privilege license is, at best, an indirect method of zoning ordinance enforcement and is, therefore, to be distinguished from the remedies set forth is N.C. Gen. Stat. 160A-175, which provide for direct enforcement of city regulatory ordinances."

Patrick Molamphy sought to build a convenience store in Southern Pines. The Town Council proposed a zoning amendment to prohibit the proposed convenience store and published notice of a "Request to amend Section 146, Use 2.111." The Town then held a public hearing and enacted an ordinance, which effectively disallowed Molamphy’s proposed convenience store.

Even though Molamphy did receive notice of the hearing and, in fact, attended and spoke in opposition to the ordinance, Magistrate Judge Eliason held that because the Town published the two notices of the meeting in one week rather than consecutive weeks as required in N.C. Gen. Stat. 160A-364 (notice must be published "once a week for two consecutive calendar weeks"), the amendment was void.

Furthermore, he held that the vague description in the notice was not sufficient to provide notice of the public hearing. Judge Eliason described the wording in the newspaper notice as "nothing less than cryptic shorthand that the meeting may take up the topic of zoning with respect to convenience stores." He emphasized that notice must "be descriptive and informative beyond some vague, cryptic notation" and that the failure to be sufficiently descriptive invalidated the notice, and consequently, the ordinance.

Rutherford County noticed a public hearing to consider an ordinance to prohibit heavy industry within 2000 feet of schools and churches. Although N.C. Gen. Stat. § 160A-364 requires notice by publication "once a week for two consecutive calendar weeks," the County published the legal advertisement only one time. After the public hearing, the Board of Commissioners voted to impose a building moratorium prohibiting heavy industry in school zones while the Planning Commission considered a zoning plan to deal with the same. Eventually, a zoning amendment was noticed, a public hearing was held and the County enacted an ordinance, which effectively disallowed the plaintiff’s quarry, which was planned but not operating.

During the moratorium period, the plaintiff applied for a building permit to operate a crushed stone quarry and had been denied. The plaintiff sued alleging, among other things, that the moratorium had been invalid because the County did not publish notice once a week for two successive weeks in a newspaper of general circulation as is required before a land use ordinance is enacted.

The Court of Appeals rejected the County’s argument that the moratorium was enacted under its general police power, and accordingly, was not subject to the notice requirements related to land use ordinances. The Court held that because the County was partially zoned, the moratorium had the effect of making areas of the county that were not zoned, subject to zoning prior to the adoption of a zoning ordinance. Accordingly, the moratorium was a sort of temporary land use plan while the County’s planning commission considered a permanent land use plan and the notice provisions should have been followed. Failure to publish once a week for two successive weeks caused the moratorium to have been void and therefore, the plaintiff’s building permit should have been issued.

Knight v. Knightdale; 596 S.E.2d 881, 2004 N.C. App. LEXIS 1137 (June 15, 2004)

The Knights wished to construct a modular home. The Town staff had initially determined that the Knights’ home was "manufactured" and so, pursuant to the Town’s Unified Development Ordinance ("UDO"), a zoning compliance permit was issued by the staff. However, after the issue was raised by neighboring property owners, it was determined that the Knights’ home was actually "modular" rather than "manufactured" and according to the UDO would require a zoning compliance permit with site plan approval by the Town Council. The pertinent portions of the Town’s Unified Development Ordinance state:

The Town Council shall approve, approve with conditions, or deny, or take any other action consistent with its usual rules of procedure on the site plan. Actions shall be based on conformity with this chapter, the Comprehensive Plan, and other adopted plans and standards; however, no site plan shall be approved unless the Town Council first finds that the plan meets all the following: . . . The plan contains adequate measures to protect other properties, including public corridors, from adverse effects expected from the development, including without limitation, stormwater, noise, odor, on and off-street parking, dust, light, smoke and vibration.

The Town Council considered the request, took public comment, and referred the matter to the Town’s Planning and Appearance Board. The Planning and Appearance Board voted to recommend the Council approve the Knights’ site plan subject to certain changes such as adding a porch, constructing a driveway and sidewalk, and redesigning the chimney to more closely resemble a traditional chimney. Upon reconsideration, the Council took further public comment and then denied the permit application. Although the Council made no written findings, the minutes of the meeting indicate that the Council based the denial on the likelihood of diminution in the property values of surrounding property.

On appeal, the Court of Appeals noted that the North Carolina Supreme Court has directed that "[since] zoning ordinances are in derogation of common-law property rights, limitations and restrictions not clearly within the scope of the language employed in such ordinances should be excluded from the operation thereof." (quoting Capricorn Equity Corp. v. Town of Chapel Hill Bd. of Adjust., 334 N.C. 132 (1993)) It then considered the plain language of the Town’s UDO and concluded that diminution in neighboring property values was excluded from the scope and intent of the relevant standard set forth in the UDO and that the Town had erroneously denied the Knights’ application. Because the decision was based on an inappropriate consideration, not denoted in the UDO, the Court reversed the Council’s denial and ordered the Town to issue the permit.

The defendants own roughly forth-one acres of land in Surry County. The plaintiffs are neighboring property owners. The defendants submitted an application for a manufactured home park as required by the Manufactured Home Park Ordinance but then took no further steps to proceed with that application. Shortly thereafter, they submitted a preliminary subdivision plat for twenty acres and then a second plat for the remaining acres. Both plats were eventually approved and the defendants began leasing the individual lots to third parties who brought in mobile homes.

At the time, Surry County had a Manufactured Home and Manufactured Home Park Ordinance in effect. However, those ordinances expressly applied only to unsubdivided parcels. There was no zoning ordinance in place at the time. The plaintiffs assert that the definition of "subdivision" does not include the rental of spaces to third parties for placements of mobile homes and that, because the property was not subdivided, the Manufactured Home Park Ordinance should apply.

In a divided opinion, the Court of Appeals affirmed the Superior Court’s rejection of the plaintiffs’ arguments. The majority explained that the subdivision ordinance defines subdivision as "all divisions of a tract or parcel of land into two or more lots, building sites, or other divisions for the purpose of sale or building development (whether immediate or future)." It also flatly rejected the plaintiffs’ assertion that the subdivision ordinance regulates use.

In a dissenting opinion, Judge Wynn held that rental of lots for mobile homes does not fit within the definition of subdivision and thus, the Manufactured Home Park Ordinance should apply. He noted that the terms "sale" and "building development," which are used in the definition of subdivision, are not defined in the ordinance. However, the defendants mere renting of lots without any involvement with the placement of the mobile homes onto the lots and where the lessees had no contract to purchase the lots, did not qualify within the ordinary meanings of either "sale" or "building development."

This case is being appealed to the North Carolina Supreme Court.

Sanco had applied for approval of its subdivision plat to build a condominium complex and received preliminary approval from the Technical Review Committee of the New Hanover Planning Board (the "TRC") in accordance with the New Hanover County Ordinance. After approval, a group calling itself "Concerned Citizens for Neighborhood Preservation" submitted a petition signed by thirteen individuals to the Planning Department. The petition requested a public hearing and despite Sanco’s objections, the Board of Commissioners held a hearing on the matter. At the hearing it was properly stated that the proceeding was "an administrative action, not a quasi-judicial action." However, after hearing from those present, the Board voted to "amend" the approval of the TRC to reduce the number of approved condominium units from 427 units to 213 units.

Sanco filed a Petition for a Writ of Certiorari with the Superior Court seeking a declaration that the approval of the project was a ministerial decision in which policy considerations were not proper and that according to the New Hanover Subdivision Ordinance, only the subdivider had a right to appeal the decision of the TRC to the Board. The Court held that the Board’s actions were not proper and reinstated the original approval of Sanco’s subdivision plat. The County appealed and the North Carolina Court of Appeals affirmed the Superior Court’s reversal of the Board’s action.

First, the Court noted, the County’s Ordinance plainly afforded only the applicant the right to appeal beyond the Planning Board to the Board of Commissioners. Such a limited right of appeal was consistent with the remainder of the ordinance, which did not require that there be public hearings or public comment on preliminary subdivision reviews.

Additionally, the Court held that New Hanover County, like many counties and municipalities, had a ministerial or administrative review of subdivision plats. While the County could have chosen to employ a quasi-judicial process, which would require that certain due process standards, including notice and an opportunity to be heard, be met, it did not. The fact that the subdivision approval was ministerial was significant as explained by the Court:

When designed as a ministerial process the plat approval is unlike the zoning process because issues ‘such as density and character of the neighborhood and streets’ are not addressed by the local governmental authority. Nazziola v. Landcraft Props., Inc., 143 N.C. App. 564, 566-67, 545 S.E.2d 801, 803 (2001). As such, under a ministerial scheme, an applicant’s compliance with the established procedures and requirements of the plat approval process renders the applicant entitled to the permit as a matter of law. Quadrant Corp. v. City of Kinston, 22 N.C. App. 31, 32, 205 S.E.2d 324, 325 (1974).

Therefore, the Board did not have the discretion to have amended the TRC’s approval.

The New Hanover County Subdivision Regulations provide that where certain standards are met, subdivision approval should be automatic. The Regulations do not provide for participation in the process by adjacent property owners. However, after the Carolina Green Preliminary Site Plan and the Updated Beau Rivage Plantation Preliminary Site Plan were approved, neighboring property owner, Beau Rivage HOA appealed. The Superior Court dismissed the appeal finding that the petitioners had no right to appeal.

Based on Nazziola v. Landcraft Props., Inc., 143 N.C. App. 564, 545 S.E.2d 801 (2001) and Sanco of Wilmington Service v. New Hanover County, supra, the Court of Appeals affirmed the trial court explaining, "Absent an express provision granting an aggrieved party the right to appeal a decision approving an applicant’s subdivision plan, a ministerial scheme such as the one here simply does not allow for a third party appeal to the governmental board."

Holding: In order for a court to have subject matter jurisdiction over a federal takings claim, the plaintiff must first have attempted to obtain compensation.

In cases where constitutional claims are truly zoning disputes, federal courts should abstain.

Fourth Quarter owned 43 acres adjacent to the Concord Airport, which was owned by the City, and had an option to purchase an additional 1.71 acres. It planned to build a shopping center on the property. The property was zoned to allow a shopping center but was subject to building restrictions due to its proximity to the airport. Some time after the property was purchased, the City enacted a zoning amendment which added a height restriction on Fourth Quarter’s property. Later, an additional amendment created a conditional use buffer zone on Fourth Quarter’s property.

Fourth Quarter attempted to purchase the additional acreage and to proceed to obtain a zoning permit for its project. According to the City’s ordinance, the zoning permit "shall be granted" if the request met all of the regulations set forth in the ordinance, including that it does not create an airport hazard. Through other negotiations Fourth Quarter was having with the City, the Aviation Director reviewed Fourth Quarter’s plans and, though the zoning permit was not executed, informally approved the project.

In the meantime, the City was contemplating changing runway approaches, which would require a larger runway protection zone ("RPZ"). Under Federal Aviation Administration policy, the airport owner, here the City, is responsible for acquiring the RPZ. If someone other than the airport owner owns land in the RPZ, building restrictions in that area are only recommendations as to those owners.

There is a dispute as to whether the RPZ was implemented or merely contemplated but the City did not acquire Fourth Quarter’s land. Attempts to swap land with the City failed and eventually, Fourth Quarter’s zoning clearance permit was formally denied as to some of the property.

Fourth Quarter brought suit against the City based on delayed approval of a portion of the property and the refusal by the City to approve other construction. Its claims included breach of contract, inverse condemnation, unfair trade practices, negligent and/or willful misrepresentation, and tortious interference with actual and prospective leases, as well as two claims under 42 U.S.C. § 1983, including one taking claim and another for violation of substantive due process. The City moved to dismiss the claims or in the alternative to stay the complaint pending the resolution of the state law claims.

The federal district court for the Middle District of North Carolina considered the motions and granted, in part, the City’s motions. As for the takings claim, the Court explained that before a claim that governmental policies have unconstitutionally deprived a plaintiff of property rights is ripe, the governmental entity in charge of the implementing the regulations must have made a final decision with respect to the question at issue and the property owner must have utilized procedures for obtaining compensation and been denied. Because Fourth Quarter conceded that they have not sought compensation from the state, the Court dismissed its takings claim. It rejected Fourth Quarter’s argument that since it was bringing a state law inverse condemnation claim in the diversity action before the court, the federal takings claim would "ripen" when the Court resolved the state law condemnation claim. The Court explained, "the test for subject matter jurisdiction is whether a case is ripe for adjudication, not whether the case may eventually ripen."

Additionally, the Court ordered the remaining claims stayed so that they could be reviewed by the state courts. The Court rejected Fourth Quarter’s arguments that it had genuine and independent federal claims beyond a zoning dispute. It explained, "The Fourth Circuit has singled out local land use and zoning laws as quintessential matters of state concern, emphasizing that local zoning and land use law ‘is particularly the province of the State and that federal courts should be wary on intervening in that area.’" It continued by recognizing, "where ‘plaintiffs’ federal claims stem solely from construction of state or local land use or zoning law, not involving the constitutional validity of the same and absent exceptional circumstances; such as independent federal claims," federal courts should abstain. (quoting Burford v. Sun Oil Co., 319 U.S. 315 (1943)) Because Fourth Quarter was seeking monetary damages, the claims were stayed, rather than dismissed, pending resolution of the zoning issues by the state courts.

Caudill owns a gas station on property that is zoned "Commercial Business" ("CB"). Downtown Greensboro Renaissance, LLC plans to build a stadium for a professional baseball team to play on nearby property, also in the CB zoning district. Caudill requested an interpretation from the Zoning Administrator as follows: "[a] review of table 30-405-1 Permitted Uses indicates that professional baseball clubs may only be permitted to operate in the zoning classification Public and Institutional. I am asking that you confirm this or give a reason why this is not correct." The Zoning Administrator responded that Caudill’s interpretation was not correct and explained why. Caudill appealed to the Greensboro Board of Adjustment. The BOA voted to uphold the Zoning Administrator s interpretation and Caudill filed a Petition for a Writ of Certiorari. The Greensboro BOA and DGR, who was allowed to intervene, moved to dismiss based on the assertion that Caudill lacked standing to pursue the litigation.

Reversing the Superior Court, the Court of Appeals held that Caudill did not have standing. The Court of Appeals noted that under N.C. Gen. Stat. 160A-388(b), a "person aggrieved" may review the determination of a zoning officer to the BOA and then to Superior Court. "An aggrieved party is one who either shows a legal interest in the property affected or, in the case of a ‘nearby property owner, [shows] some special damage, distinct from the rest of the community, amounting to a reduction in the value of [that owner’s] property."

The Court found that Caudill did not attend the BOA meeting but that his attorney spoke on his behalf. The attorney asserted that Caudill had standing because he owned property in the zoning district where DGR plans to build the stadium and that traffic congestion due to the new use would cause a devaluation of Caudill’s property because of the difficulty of customers wanting to access Caudill’s business. The Court explained that ownership of property within the zoning district was not sufficient to confer standing. Furthermore, assertions of potential traffic congestion and/or diversion due to the closure of the nearby street were also insufficient.

Rowan County approved a conditional use permit for a quarter midget race track. Neighboring property owners appealed the CUP via a Petition for a Writ of Certiorari in Superior Court, alleging that the Board of County Commissioners had erroneously interpreted the zoning ordinance, considered and weighed incompetent evidence, and had an irreconcilable conflict of interest because the Board was an interested party. The Superior Court affirmed the grant of the CUP and the neighbors appealed claiming, among other things, that the Court had erroneously determined that competent evidence supported the Board’s decision.

The Court of Appeals remanded the case for additional consideration on the standard of review used by the trial court. It noted that when a superior court reviews a quasi-judicial decision in which the petitioner challenges the decision on the basis that it was not supported by the evidence or that it was arbitrary or capricious, the reviewing court must apply the "whole record" test. However, when the petitioner contends the decision was incorrect because it was based on an error of law, "de novo" review is required. The Court explained that "the trial court, when sitting, as an appellate court, to review a [decision of a quasi-judicial body], must set forth sufficient information in its order to reveal the scope of review utilized and the application of that review." In this case the Court should have conducted "de novo" review to address the challenges to the interpretations and the "whole record" test to resolve issues relating to the evidence. Because the Superior Court’s order did not show what standard was applied in the rendering of the decision, the case was remanded.

Hanson Aggregates Southeast, Inc. v. Raleigh, 2004 N.C. App. LEXIS 1576 (August 3, 2004)

Hanson Aggregates has operated a quarry since 1973, prior to the property being within Raleigh’s zoning jurisdiction. At some point this property was zoned for residential use. In 2002, a zoning inspector from the city issued a written "Order for Compliance" ordering Hanson to immediately cease mining activity on a portion of its property. Hanson insists that it was not required to appeal this order but did appeal it to the City’s Zoning Board of Adjustment.

While the matter was before the BOA, Hanson also filed a lawsuit, claiming vested rights against the zoning ordinance and constitutional violations from the interference therewith and praying for a declaration as to its rights, as well as injunctive and monetary relief. The City moved to dismiss and the Superior Court granted the motion for lack of subject matter jurisdiction because Hanson had not yet exhausted its administrative zoning remedies and its claims, therefore, were not ripe.

On appeal, the Court of Appeals affirmed the Superior Court’s dismissal. The Court noted that where the statutes provide for an administrative remedy, that remedy must be pursued prior to going to court. It held that N.C. Gen. Stat. § 160A-388(b) provided for an appeal from a zoning inspector’s order of compliance or notice of violation. ("The board of adjustment shall hear and decide appeals from and review any order, requirement, decision, or determination made by an administrative official charged with the enforcement of any ordinance adopted pursuant to this part.") Although the BOA did not have authority to address the constitutional challenges to the ordinance, they could only be adjudicated in a separate civil action after the appeal was pursued with the BOA because the courts of this state do not address conditional questions where a case may be resolved on other grounds.

Northfield Development Company applied for a special use permit for a cemetery in Burlington’s extraterritorial jurisdiction. The request was denied by the City Council without a public hearing. Northfield filed a complaint challenging the denial but voluntarily dismissed without prejudice. A year later, it refiled the action claiming that the Cemetery Act was a complete regulatory scheme and that the City could not request additional information relating to the request for the special use permit. It demanded that the SUP be issued and that it be granted monetary damages. The Superior Court granted the City’s motions to dismiss and motions for summary judgment as to all claims. Northfield appealed.

The Court of Appeals affirmed holding that because Northfield had failed to file a petition for a writ of certiorari when the Council denied its request for the SUP, both the Superior Court and the Court of Appeals lacked jurisdiction to hear the case. It characterized Northfield’s claim for the SUP as a mandamus claim and that a writ of mandamus should only be issued where there is no other legal remedy. It held that Northfield could not "create jurisdiction by couching its claim in the guise of a mandamus proceeding."

Holding: The plaintiff’s challenge to Lake Lure’s regulations relating to buildings on the lake did not violate the plaintiff’s constitutional rights.

After she was granted a Lake Structure Permit, in compliance with the Town’s ordinance, Patricia Hyatt built a seawall and boathouse. The Lake Structures Regulations ("LSRs") required that seawalls be built at 990 mean sea level. A neighbor reported that Hyatt’s seawall encroached on his property and after an inspection, it was revealed that it also was built below the shoreline and that the boathouse was larger than was permitted by the LSRs. The Town informed her of her infractions and fined her.

She sued in federal and state court. In federal court she argued that the LSRs violate her substantive due process rights, procedural due process rights and equal protection rights. The Fourth Circuit affirmed the district court below in rejecting all of Hyatt’s claims. It pointed out that "[l]and use enactments are particularly resistant to facial vagueness challenges, because zoning law is often given specific content through the very planning and permitting process that Hyatt sought to circumvent." Additionally, it emphasized that zoning has been recognized "simply not the business of the federal courts." The Court noted that her decision to stay her state action "shows an unfortunate failure to grasp the import of circuit precedent."

BB&T applied for a special use permit to operate a bank branch office with drive thru lanes. The Henderson Board of Adjustment considered evidence presented by BB&T as well as that of neighboring property owners who opposed the SUP. The hearing was held open for two months while BB&T awaited approval of the drive-thru by DOT. When DOT granted its approval, BOA voted four-to-one to issue the SUP. The neighbors appealed and because the BOA had not made findings of fact, the Superior Court remanded the matter to the BOA for it to do so. After the issue was sent back to the BOA, there was not notice of the meeting at which the findings of fact were discussed. However, BB&T did not present any more evidence.

The neighbors again appealed the SUP, this time citing the BOA’s failure to provide them with notice of the meeting in which the findings of fact were made as a violation of their due process rights. The Court of Appeals noted that in a quasi-judicial proceeding, the "essential elements" of a fair trial must be respected. However, the Court agreed with the Superior Court that these elements had been met, despite the fact that the BOA did not give specific notice to the neighboring property owners of the meeting at which they adopted the findings of fact related to the SUP. Because no additional evidence was considered and the property owners had general notice of the meeting, their due process rights had not been violated. The granting of the SUP was otherwise affirmed.

Robertson v. Charlotte Zoning Board of Adjustment, No. COA04-166, 2004 N.C. App. LEXIS 2322 (December 21, 2004)

After an argument with their neighbors, the Robertsons built a fence, which extended through the required twenty-foot setback from the front to the back setback line. It ranged in height from four and a half feet to over eight feet. Section 12.406(1) of the Charlotte Zoning Ordinance requires : "Any fence or wall located in the required setback shall not be built to a height greater than 5 feet above grade, unless it is part of a zero lot line subdivision, then it maybe [sic] 6 feet in height." The Robertsons’ neighbors reported the fence to the zoning inspector and a notice of violation was issued, ordering the Robertsons to reduce the fence to five feet.

The Robertsons sought a three-foot variance from the Zoning Board of Adjustment. The BOA granted them a three-foot variance for the portion of the fence located from the opening of the driveway to the end of the fence but denied the variance for the portion of the fence from the road to the driveway opening.

The Robertsons appealed the BOA’s decision to the Superior Court. The Superior Court held that the BOA had failed to make sufficient findings of fact from which it could make a determination and remanded the matter to the BOA.

The BOA considered the whole record of the hearing and made additional findings of fact upholding its decision to deny the Robertson’s request for a variance for the portion of fence adjacent to the road. On remand the BOA’s additional findings of fact included the following: (1) the Robertsons created their own hardship by not applying for a variance before construction of the fence, (2) the Robertsons’ hardship was "personal in nature" because an argument with their neighbors inspired the fence, (3) a portion of the Robertsons’ fence would require as much as a sixty percent variance, (4) the slope nearest to the road is not proportionate to and does not justify the large variance request, (5) the portion of the fence in the front setback and side yard has more of an impact on adjoining property owners, and (6) the severe curve in the road makes the existing fence unsafe. In short, the BOA concluded that the variance requests "would not promote the public safety and welfare of individuals traveling Signer Road."

After remand, the Superior Court concluded that the BOA’s decision was based on "competent, material and substantial evidence in the whole record" and is not arbitrary and capricious. Furthermore, there was no violation of the Robertsons’ due process rights. The Court of Appeals affirmed the Superior Court’s decision, noting that Robertsons "b[ore] the burden of proving their case . . . [and that] [t]he Board is prohibited from authorizing a structure that conflicts with the general purposes of the ordinance, ‘for to do so would be an amendment of the law and not a variance of its regulations.’" (quoting Lee v. Board of Adjustment, 226 N.C. 107, 37 S.E.2d 128 (1946).

Pursuant to N.C. Gen. Stat. § 160A-48(c), part or all of an area being involuntarily annexed "must be developed for urban purposes at the time of approval of the [Service Plan] report," required by the Statutes. An area that is developed for urban purposes is any which meets several standards set forth in the Statutes, including "[i]s so developed that at least sixty percent (60%) of the total number of lots and tracts in the area at the time of annexation are used for residential, commercial, industrial, institutional or governmental purposes. . ." N.C. Gen. Stat. 160A-48(c)(3).

The City of Asheville passed an ordinance annexing an area owned by, among others, Ridgefield Properties. Ridgefield and others challenged the annexation, asserting that the annexation was invalid because, among other reasons, the area did not meet the "use test" set forth in N.C. Gen. Stat. 160A-48(c). During the annexation process, Asheville’s Service Plan reflected that 68.75% of the lots in the area to be annexed were in use for one of the qualifying purposes. Ridgefield asserted that six lots within the Ridgefield that were designated in the Services Plan as being in commercial use were not in use at the time of the adoption of that plan. Instead, the lots were under construction.

The Superior Court rejected Ridgefield’s argument but a majority of the Court of Appeals agreed and found that the plain language of the statute required that the area "must be developed for urban purposes at the time" of the annexation Service Plan. See N.C. Gen. Stat. 160A-48(c)(3) (emphasis added). Because the lots were under construction, they were not being used for residential, commercial, industrial, institutional or governmental purposes "at the time." According the annexation was invalid and void. Judge McCullough dissented asserting that "[w]hen a developer hires a construction company to erect shopping centers and/or offices, such would certainly seem to qualify as a ‘commercial’ use of the property."

The matter was appealed and the Supreme Court affirmed the decision of the majority without a written opinion.

Asheville passed an ordinance purportedly annexing approximately 1,500 acres. The property targeted for annexation was being used in a variety of ways, the largest single property and use being a steam-generated electrical power play owned and operated by CP&L. In its annexation Services Plan, the City classified a little over 288 acres of this property as non-urban. This non-urban property was comprised of five non-contiguous tracts. Non-Urban Areas 1 and 4 were not adjacent to the City’s existing municipal boundary line.

CP&L challenged the City’s adoption of the annexation ordinance, contending that the City incorrectly characterized Non-Urban Areas 1 and 4 because those areas were not adjacent to the municipal boundary line, as required by N.C. Gen. Stat. § 160A-48(d)(2). The Superior Court and a majority of the Court of Appeals affirmed the City’s annexation of Areas 1 and 4. However, the Supreme Court reversed, applying a strict and literal construction of § 160A-48(d)(2).

Areas that do not meet the requirements for urban property set forth in § 160A-48(c) are, by implication non-urban areas. Such non-urban areas may be annexed if they meet the requirements of subsection (d) of this statute, which provides:

In addition to areas developed for urban purposes, a governing board may include in the area to be annexed any area which does not meet the requirements of subsection (c) if such area either:

1. Lies between the municipal boundary and an area developed for urban purposes so that the area developed for urban purposes is either not adjacent to the municipal boundary or cannot be served by the municipality without extending services and/or water and/or sewer lines through such sparsely developed area; or

2. Is adjacent on at least sixty percent (60%) of its external boundary, to any combination of the municipal boundary and the boundary of an area or areas developed for urban purposes as defined in subsection (c).

N.C. Gen. Stat. § 160A-48(d) (emphasis added).

The Supreme Court rejected the Court of Appeals reasoning that "any combination" could include a situation where a parcel abuts an area developed for urban purposes but not a municipal boundary. The Supreme Court reasoned that the language "combination" connotes two or more things and is consistent with conjunctive "and," which joins the two components of (d)(2). The Court explained that non-intervening, non-urban areas are not necessary to accomplish the legislative purpose of subsection (d), to allow cities to extend their services to reach urban core areas; and therefore, there is no basis for annexing such areas if they do not meet the requirements of (d)(2). To further bolster its decision, the Court pointed to recent statutory amendments that further limited a city’s annexation power, which the Court construed as evidence that the General Assembly desired to restrict annexation, not facilitate it.

The Court proclaimed:

Involuntary annexation is by its nature a harsh exercise of governmental power affecting private property and so is properly restrained and balanced by legislative policy and mandated standards and procedure. . . . The declaration of state policy for annexation by municipalities having a population of 5,000 or more . . . specifies that annexation should be done in accordance with uniform legislative standards to provide "governmental services essential for sound urban development and for the protection of health, safety and welfare in areas being intensively used for residential, commercial, industrial, institutional and governmental purposes or in areas undergoing such development." N.C. Gen. Stat. § 160A-45(2) (emphasis added).

 

Over the opposition of the Moore’s Ferry Owner’s Association, the City of Hickory lifted a moratorium on the extension of the city street, 42^nd Avenue Drive, N.W. The moratorium had originally been put in place to prevent extending the road to provide a connection between the neighborhoods of Old Moore’s Ferry and New Moore’s Ferry, which the Association felt were dissimilar. Although the moratorium was lifted, in response to concerns, the City executed a license to the Association authorizing the construction of a visitor’s information center on 42^nd Avenue Drive, N.W. The agreement was drafted as a revocable license agreement and purportedly permitted the Association to "lay out, construct and maintain a Visitor’s Information Center." The developer of Old Moore’s Ferry filed suit seeking to have the license revoked and the structure removed. The Superior Court ordered summary judgment for the City and the developer appealed.

On appeal, the Court of Appeals examined the enabling statutes and the agreement. The Court found that "[t]he town authorities hold the streets in trust for the purposes of public traffic and cannot, in the absence of statutory power, grant to anyone the right to obstruct the street to the inconvenience of the public even for public purposes, and for private purposes not at all." It cited the General Statutes that provide:

"A City shall have general authority and control over all public streets, sidewalks, alleys, bridges and other ways of public passage within its corporate limits except to the extent that authority and control over certain streets and bridges is vested in the Board of Transportation. General authority and control includes but is not limited to: . . . (6) [t]he power to regulate, license, and prohibit digging in the streets, sidewalks, or alleys, or placing therein or thereon any pipes, poles, wires, fixtures, or appliances of any kind either on, above, or below the surface. . . [and] (8) [t]he power to grant easements in street rights-of-way as permitted by G.S. 160A-273."

N.C. Gen. Stat. § 160A-296(a).

The Court concluded that the structure was neither an appliance nor a fixture and so N.C. Gen. Stat. 160A-296(a)(6) did not provide the City with the statutory authority to permit the license. Additionally, the agreement was clearly a license, rather than an easement, and so N.C. Gen. Stat. 160A-296(a)(8) did not provide the City with the authority to allow the structure. As there was no statutory authority, the Court held that the City was without authority to permit the structure.

In New London, Connecticut, the City planned to purchase all property in a section of the Fort Trumbull neighborhood and to lease the property to Corcoran Jennison, a private developer, for 99 years at the rent of $1.00 per year, for redevelopment. Redevelopment is expected to include upscale homes, hotels and office buildings. The City undertook to condemn the property of some property owners who did not agree to sell and the property owners sued.

By a 4-to-3 decision, the Connecticut Supreme Court held that the redevelopment plan constituted a valid public purpose by creating new jobs, increasing tax and other revenues, and otherwise revitalizing distressed urban areas, and that, therefore, the City could use its condemnation power. This holding is on appeal to the United States Supreme Court and the Court has granted certiorari to determine whether the government can condemn property to transfer it to another private party where the "public purpose" is economic development.

The United States Supreme Court has granted certiorari and at least twenty-five amicus curiae briefs were filed in December, in addition to those of the parties.

After much dispute, this summer the General Assembly passed a bill which prevents local governments from amortizing the elimination of billboards. Where a local government had a billboard amortization ordinance already in effect, that ordinance is grandfathered but cannot be amended to reduce the amortization period.

Rather than amortization, a local government may either offer relocation to another site or compensate the billboard owner monetarily. If a local government selects the former, it can offer comparable location and agree to pay reasonable costs of relocation and reconstruction. If the parties disagree as to a relocation site, the matter can be resolved in binding arbitration. If the arbitration results in a finding that the site is not reasonable comparable but the city opts to remove the sign, the parties must determine appropriate monetary compensation with recourse to superior court.