For
the first time since 1988, the North Carolina Supreme Court has
addressed the issue of spot zoning. The case is Good
Neighbors of South Davidson v. Town of Denton.
Although the case is somewhat fact specific, it could have further
reaching implications. In particular, as a result of the decision,
municipalities will need to take a closer look when zoning property
located at and outside their borders.
The facts of the case
are as follows: Piedmont Chemical Industries, Inc. had
owned a fifty-acre parcel of property in Davidson County since 1978. In
1990, the County zoned the area for rural agricultural purposes (RA2)
and Piedmont’s chemical-storage facility was no longer a
permitted use; however, it was allowed to continue as a nonconforming
use. Presumably, because it wished to expand or alter its facility, in
1991, Piedmont attempted to rezone its property for industrial use. The
County rejected the proposal, as it did again in 1994.
In 1998, Piedmont
tried a different approach and petitioned the neighboring Town of Denton
for voluntary satellite annexation of its property. The annexation was
"satellite" because the property’s borders were not
contiguous to the Town’s limits with its closest border two miles
away. This request was granted by the
Town’s Board of Commissioners on April 20, 1998 and then, six
weeks later, the Board granted Piedmont’s rezoning request, zoning ten
acres as light industrial (LI) and the remaining forty acres as heavy
industrial (HI).
Residents of the
County and owners of the property surrounding Piedmont’s property
challenged the Town’s action as an improper form of spot zoning and
filed suit. The Supreme Court ruled in favor of the County and property
owners and declared the rezoning invalid.
Spot zoning has been
defined as a zoning ordinance or amendment which "singles out and
reclassifies a relatively small tract owned by a single person and
surrounded by a much larger area uniformly zoned, so as to…relieve the
small tract from restrictions to which the rest of the area is
subjected." Blades v. City of Raleigh, 280 N.C. 531, 549,
187 S.E.2d 35, 45 (1972. Unlike many other jurisdictions, in North
Carolina, spot zoning is not per se invalid. See Chrismon
v. Guilford County, 322 N.C. 611, 370 S.E.2d 579 (1988). To show
that it is valid, the zoning authority must establish that the ordinance
had a reasonable basis. The reasonableness inquiry includes
consideration of the size of the tract in question, the compatibility of
the zoning amendment with the existing zoning plan, the benefits and
detriments to the property owner, his neighbors, and the community that
result from the zoning, and the relationship between the uses
permissible under the new zoning and the current uses in the adjacent
tracts. See Chrismon; see also Good Neighbors.
In the Good
Neighbors case, the Supreme Court clarified that the reasonableness
inquiry should consider the neighboring property and the surrounding
community, whether that property is governed by the zoning authority or
not. In rejecting the Town’s list of benefits that it received from
the zoning amendment as insufficient to show reasonableness, the Court
explained as follows:
[F]or purposes of
spot zoning, a ‘reasonable basis’ is established when a zoning
authority ‘clearly shows’ that the potential benefits to the
property owner, his neighbors and/or the surrounding community
outweigh the potential detriments to those neighbors and/or the
surrounding community as a whole. In the context of this case, we note
that an assessment of the zoning’s impact on neighbors and the
surrounding community must include an evaluation of areas that are:
(1) beyond the control of the entity making the zoning decision, and
(2) under the control of a different zoning authority.
The Court noted that
because the rezoning was preceded by a satellite zoning, Piedmont’s
surrounding property owners were particularly adversely affected. As
they had no representation at the Town level, they had no political
voice in their fight against the zoning change. The Court concluded that
because the Town could act without fear of retaliation from the
neighbors, the effect to the surrounding community was uniquely
detrimental. Referring to the "cavalier unreasonableness" of
the Town, the Court struck down the zoning as invalid spot zoning.
Good Neighbors
obviously involved a landowner who was attempting to abuse the system to
obtain favorable zoning. Also, satellite annexations are somewhat
unique, so at first blush, the case appears to be somewhat limited to
its facts. However, it is not unusual for municipalities to voluntarily
annex small pieces of property at their borders. To avoid illegal spot
zoning, Good Neighbors suggests that any time a municipality
zones at the borders, it should consider compatibility with and the
effect on property beyond its territory. For example, in considering the
appropriateness of a new zoning designation, a town zoning at its limits
would arguably need to consider the zoning of surrounding property
beyond its borders, including property zoned by the county or
neighboring town.
Also of interest, is
the Court’s emphasis on the adverse effect of zoning being imposed on
surrounding property owners who do not have political representation
with the zoning authority. This is a common occurrence for cities and
towns zoning in their ETJs (extraterritorial jurisdictions). Because
property owners in the ETJ do not have representation, according to Good
Neighbors, they would be especially adversely affected by
inappropriate zoning. Based on this decision, one could infer that ETJ
zoning, spot or not spot, may be subject to more rigorous review than
that within a municipality’s borders.
In sum, Good
Neighbors makes the standard for zoning satellite parcels clear.
However, it may have implications for other zoning decisions, as well.
If you have any
questions regarding Spot Zoning or other Zoning and Land Use issues,
please contact
Robin Morris
or Kacey Sewell at
919.783.6400, rtmorris@poynerspruill.com
or ksewell@poynerspruill.com.
