tag: North Carolina Land Use Litigator: March 2013

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Tuesday, March 26, 2013, 4:42 PM

Update: North Carolina Senate Votes In Favor of Legislation "Condemning" Land Lease with City of Raleigh

We blogged yesterday about Senate Bill 334, the proposed legislation to "condemn" the lease between the State of North Carolina (as lessor) and the City of Raleigh (as lessee) for the Dorothea Dix Campus, 300-plus acres in downtown Raleigh which the City planned to turn into a "destination park".

This afternoon, after debate, the North Carolina Senate passed Senate Bill 334 with 29 yeas against 21 nays.  The Bill now heads to the North Carolina House for a vote of its own.

From what we at the Land Use Litigator can gather, the issue is divided between, at least: (1) those who feel a park in downtown Raleigh is a wonderful use of the land, (2) those who feel that the State gave the City a sweetheart deal in these tough, economic times wherein the State should revisit the lease at fair market value, (3) those who feel that turning the Campus into a park, and displacing the remaining mental health services and patients, heeds the voice of the elite and further dampens the whispers of those so easily  forgotten by society, (4) those who worry that absent the City's use of the land as a park, the interests of private developers will prevail on the land, (5) those who worry that the State's willingness to void a contract sets an insidious and ultimately damaging commercial precedent, (6) those who feel this is simply the latest effort -- legislatively, executively or judicially -- to curb the legal powers of local governments in North Carolina.

Said another way, are we talking about the lease or the park, here?  If it's the lease we're talking about, is it the State's money or the benefit to the City about which we have a problem?  If it's the park, is it the displacement or simply the use of downtown real estate as a non-developable park about which we have a problem?

Finally, a word about the land itself and its spirit.  We would commend readers to the tale of Dr. Albert Barnes, his foundation and what some consider the world's most important single collection of post-impressionist art.  Dr. Barnes had a will, but others had a will even craftier than his.

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.  Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw.

Monday, March 25, 2013, 6:25 PM

Nixing Dix: North Carolina Legislature Proposes Law to "Condemn" Its Own Land Lease With Municipality

The Dorothea Dix Hospital Campus in Raleigh, North Carolina used to house the State's oldest mental health hospital.  The Hospital closed in 2012, at which point the State and the City of Raleigh entered into a lease for the 325-acre property a rate to the City of $500,000 per year, plus a compounded 1.5 percent increase each year to account for inflation.  The lease is to be valid for the next 75 years, with a one-time 24-year extension possible.  Just on the lease, alone, the deal is worth $68 million to the State over the 75-year life of the lease.  This does not account for the value to the State of a significant park in its Capital City, including economic impact.

City leaders referred to a planned "destination park" on the Campus, hailing the approval and execution of the lease as "an historic step that clears the way for Raleigh to begin planning its own version of Central Park on the leafy, rolling grounds of the former psychiatric hospital."


Do you think Sondheim would write a musical about Dix Park?

Not so fast.  

The State Senate has introduced a Bill, Senate Bill 334, with the express and sole purpose of voiding the lease between the State and the City of Raleigh.  According to reports, the main arguments against the lease--and in favor of Senate Bill 334--are that (1) the lease doesn't provide the state with a fair return on the fair market value of the property and (2) the lease would end up costing taxpayers money because state Department of Health and Human Services offices at the site would have to be moved.  

It's not that the State Senate is opposed to a park.  Of course not.  Rather, the proposed legislation calls for the lease to be renegotiated at a fair-market price, with the proceeds designated for mental health programs. Also, DHHS would be allowed to maintain its offices on part of the site.

Ok, but what about the fact that the State legislature both has the power to and appears perfectly willing to undo a contract into which the State entered at arm's length?  Also, the legislation is properly entitled "An Act to Condemn the Leasehold Interest ...".  Is this a proper use of the State's eminent domain powers?  If so, is just compensation required and what is the measure just compensation?  Are constitutional prohibitions against the impairment of contracts involved?   

We'll anticipate and cover the imminent lawsuit.

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.  Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw.

Read more here: http://www.newsobserver.com/2012/12/04/2523911/state-leaders-approve-dix-park.html#storylink=cpy

Thursday, March 21, 2013, 3:34 PM

Hous[ing] or Hous[ton]: North Carolina House Passes Legislation "Clarifying" Limits to Municipal Zoning Powers

We blogged last week here about North Carolina House Bill 150, entitled "An Act to Clarify When a County or Municipality May Enact Zoning Ordinances Related to Design and Aesthetic Controls".  The purpose of the Act is to "clarify" that local governments in North Carolina do not have the power under zoning enabling legislation to regulate the look of homes.  

The Act provides that a local government -- whether county or municipality -- is unable to control the following with respect to residences: exterior building color; type or style of exterior cladding material; style or materials of roof structures or porches; exterior nonstructural architectural ornamentation; location or architectural styling of windows and doors, including garage doors; the number and types of rooms; and the interior layout of rooms.  Under the Act, local governments in North Carolina would not be able to regulate these things through the zoning power.  Wait.  Maybe we mean to say that local governments in North Carolina are not now able to regulate these things through the zoning power, and the Act is the belt to the suspenders that is the zoning law as it already exists.


The Act excludes from the prohibition (i) the height, bulk, orientation, or location of a structure on a zoning lot; and (ii) the use of buffering or screening to minimize visual impacts, to mitigate the impacts of light and noise, or to protect the privacy of neighbors.  Under the Act, it appears that local governments in North Carolina would still have the ability to regulate these aspects of land use pursuant to the zoning power.  


The House of the North Carolina General Assembly has passed a version of House Bill 150, which will now go to vote in the Senate chamber of the General Assembly.  The "passed" version of the Bill can be found here.

We will continue to monitor this proposed legislation, which has been generally panned by local governments and supported by homebuilders, both with some fury.

Wait until you see our exterior nonstructural architectural ornamentation.

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.  Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw.

Wednesday, March 13, 2013, 4:23 PM

Proposed Law to "Clarify" Reach of Zoning Power: If Proposed Law Is Not Adopted, Is Existing Law Ambiguous?

This afternoon, the North Carolina General Assembly sent to the "House Floor" a proposed law entitled "An Act to Clarify When a County or Municipality May Enact Zoning Ordinances Related to Design and Aesthetic Controls".  The apparent purpose of the Act, technically called House Bill 150, is to make it clear that local governments in North Carolina do not have the power under zoning enabling legislation to regulate the look of homes.

In English?  The Act "clears up" that a local government -- whether county or municipality -- is unable to control the following with respect to residences:  exterior building color; type or style of exterior cladding material; style or materials of roof structures or porches; exterior nonstructural architectural ornamentation; location or architectural styling of windows and doors, including garage doors; the number and types of rooms; and the interior layout of rooms.

To drive the point home that the local governments do not have this zoning power, the Act is intended to amend N.C.G.S. 160A-381 and N.C.G.S. 153A-340, which is the zoning law entitled "Grant of Power".

What's curious to us is that the law is captioned as one to "Clarify" zoning powers under N.C.G.S. 160A-381 and N.C.G.S. 153A-340.  This of course implies that N.C.G.S. 160A-381 and N.C.G.S. 153A-340, as they currently exist, are not clear and, thus, cannot be interpreted through the Court's "plain meaning rule", at least with respect to aesthetic regulation of homes.  

The Act is not yet law, it must be clear.  Well, maybe it is law, because it is simply "Clarify[ing]" what is already within the law.  Right?  Isn't that what the General Assembly is saying?  Hell, it's just not clear.  It needs to be clarified.  Maybe we can clarify what the current enabling law says in light of this clarifying Act, by the adoption of another clarifying act.  Who knows?  But what is clear, according to some Legislators, is that "local zoning authority is clearly spelled out in state law and ... some cities are trying to stretch the rules".  News outlet WRAL has some interesting views from your elected officials, including the Act's sponsor, Representative Nelson Dollar, R-Wake.  

The Act excludes certain categories from its "clarified" prohibition -- local historic districts, national registry of historic places, designated historic landmarks, "manufactured or modular housing", insurance regulations.  And, lest we forget, the Act does not prevent private individuals from agreeing to restrictive covenants over design.  As to this latter point, People always agree, right?

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.  Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw.
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