tag: North Carolina Land Use Litigator: January 2014

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Friday, January 31, 2014, 9:33 AM

Denver By 6 and $722,000,000.00: Devil Resides In the Methods of Calculation of Promised Economic Impact

It's Super Bowl weekend.  Seattle and Denver, laid back versus buttoned down, offense versus defense, Peyton's businesslike old guard versus Carroll's "wheeee! it's fun!" new way.  Oh, and the game is taking place in New Jers- uh, New York City-ish.  Call it whatever you want, but don't call it boring.

We can talk and talk and talk about the actual game, but what interests us most is the economic impact of "The Game".  This interests us because the means by which the economic impact of anything is measured is always a secret sauce -- a new factory, for example.  Though, critically, North Carolina is known for its transparency on the "front end" of such things.

The NFL promises hundreds of millions of dollars in economic impact to a Super Bowl's host city.  In 1999, in a study published jointly by the NFL and the Sport Management Research Institute -- yes, published by the NFL, itself -- it was stated that Super Bowl XXXIII (Elway's final game, a 34-19 win over former head coach Dan Reeves's Falcons) -- injected $393,000,000.00 into the South Florida economy.

But, are these numbers correct?  Well, more accurately, are these numbers "honest"?  There is no way to measure total economic impact accurately, which makes the final number presented as much marketing as math.  "Mayor, is there any way we can add another $45 million if it's sunny on the day of the game?  I mean, people like it sunny, and someone probably bought sunglasses as a result; you know, multiplied by the 225,000 people we anticipate to descend on Our City."

But what we can do is discern the methods of calculation to determine how comfortable we are with the promised impacts.  For example, the method of measuring impact in Jacksonville needs to differ from that in NYC; we don't have the information handy, but we'd venture that the hotel room vacancy rates in a "non-game" January in Jacksonville are significantly higher than the vacancy rates in a "non-game" NYC, which means the assumptions must differ.  In an accessible and interesting enough study, two academics (Matheson of Williams College and Baade of Lake Forest College) review the methods employed in various studies of economic impact to determine the more realistic, the more economically sound methods for predicting or speaking in hindsight about economic impacts of a Super Bowl.  The conclusion of the paper, generally, is that most studies --  and certainly the NFL -- overstates the economic impact on the host city of The Game.

So, what does this mean for us?  When presenting a development project, where incentives or other promises are "on the line" or otherwise contingent, make sure the methodology employed in communicating with the local government, the business, the public is sound, fair, understood, agreed upon and caveated.  It's difficult to predict outcomes but it is possible to control the means by which those outcomes were promised and a manner in which disagreements can be corralled.  Transparency will continue to be the grease for public and private collaboration in North Carolina.

Enjoy the game.  We'll take the Broncos, and we'll give the Seahawks $722,000,000.00.  Wait, I mean we'll give the Seahawks the 2.5.  
"New York Welcomes You to New Jersey."

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 and "like" us on Facebook here.

Thursday, January 23, 2014, 10:44 AM

Perfect Preparation Is Key for a Quasi-Judicial Land Use Proceeding In North Carolina

There is an adage applicable to an applicant for a special use permit or a conditional use permit before a North Carolina local government: prepare your case, which will be a quasi-judicial proceeding, as though you will lose.  There is good reason for this, as illustrated by a recent decision from the North Carolina Court of Appeals.  In the event the permit applicant loses before the local government, the statutes and applicable standard of review are such that the losing applicant will face a favorable climate on appeal of that decision.

In Blair Investments, LLC v. Roanoke Rapids City Council, COA13-690 (December 17, 2013), the issue involved the construction of a cell tower, which required the issuance of a special use permit by the City Council.  The City Council denied the permit after a quasi-judicial proceeding, which the trial court affirmed.

On appeal, however, the Court noted the burden shift applicable to an appeal of a special use permit decision as well as the applicable standard of review on the "whole record".  Notably, the Court stated (1) if the applicant makes a prima facie case that it is entitled to the special use permit or conditional use permit, based upon "competent, material and substantial evidence", then (2) the local government denying the permit must put forth "competent, material, and substantial evidence" of its own that the permit should not issue.

Here is where building your case as though you'll lose -- even a perceived "slam dunk" case, of which there really is none -- comes into play.  In Blair Investments, for example, the City's planning department recommended in favor of the applicant that the City Council issue the special use permit for the cell tower.  The City Council denied the permit.  The special use permit application submitted exceeded 100 pages of paper and included the sworn affidavit of a radiofrequency engineer, documentation that the cell tower met the requirements of the National Environmental Policy Act, that the cell tower would not impact wildlife, waterways or wetlands, and that the cell tower would not expose humans to harmful levels of radiofrequency radiation.  The City Council denied the permit.  

The only evidence in the "whole record" supporting a denial of the special use permit, however, came from the testimony of local residents, all of which the Court summarizes in its opinion along with the admonition:  "Speculative assertions, mere expression of opinion, and generalized fears 'about the possible effects of granting a permit are insufficient to support the findings of a quasi-judicial body.'"  The City Council denied the permit.

The Court of Appeals reversed the trial court and ordered that the special use permit for the cell tower issue in Blair's favor. 

The Takeaway
With the inclusion of the applicant's information in the "whole record", the applicant positioned itself well before the City Council, the trial court, and the Court of Appeals.  It did take a decision from the Court of Appeals to secure the special use permit, which undoubtedly required time and expense, but preparation for a "loss", even with the support of the local planning department, helped secure the "win".    

Prepare up front, even where success seems certain. 

"Success in a quasi-judicial proceeding, when applying for a special use permit or conditional use permit, my dear friends, is 93% perspiration, 6% electricity, 4% evaporation, and 2% butterscotch ripple."

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 and "like" us on Facebook here.

Wednesday, January 22, 2014, 11:30 AM

N.C. Courts Strict In Application of Statutes Governing Appeals of Quasi-Judicial Land Use Decisions

Earlier this month, in an unpublished decision, the North Carolina Court of Appeals once again highlighted the unforgiving nature of the statutes governing appeals "in the nature of certiorari" of quasi-judicial decisions by a local government.

Philadelphus Presbyterian Foundation, Inc. v. Robeson County Bd. of Adjustment, COA13-777 (January 7, 2014) is decided on the heels of another unpublished decision, to which Philadelphus Presbyterian cites to a significant extent, Whitson v. Camden County Bd. of Commissioners, COA12-1282 (July 16, 2013).

The Philadelphus Presbyterian case involves the appeal of a dismissal by the trial court of an appeal of a conditional use permit issued by Robeson County for the construction of a sand mining and processing facility.  A number of neighbors appealed the County's quasi-judicial decision to issue the conditional use permit to applicant Buie Lakes Plantation, LLC.

The Court of Appeals states the core issue at the opinion's outset:
The Pursuant to N.C. Gen. Stat. §160A-393(e), “[i]f the petitioner is not the applicant before  the decision-making board whose decision is being appealed, the petitioner shall . . . name that applicant as a respondent.” As a result, in order to properly challenge the issuance of the conditional use permit at issue here, Petitioners were required to file their petition in a timely manner, which they appear to have done, and to name Buie Lakes as a party respondent, which they did not do.
The trial court dismissed the petition "for failure of the Petitioners to join a necessary party", which in this case was the permit applicant: Buie Lakes.  The Court's analysis centers on the legal point that naming the conditional use permit applicant in an appeal of a permit, like the filing of an appeal in a timely manner, is a prerequisite to the Court's exercise of subject matter jurisdiction over the quasi-judicial decision.  In short, the Petitioner's failure to name the conditional use permit applicant as a party to its appeal "deprived the reviewing court of any jurisdiction to hear and determine the issues raised in the petition."  The Court reminds the litigants that when hearing a matter "in the nature of certiorari", such as an appeal of a quasi-judicial decision, the trial court's jurisdiction "should be analyzed in the same manner as the extent to which an appellate court obtains jurisdiction over an appeal from the General Court of Justice or an administrative agency."  Perfecting an appeal, the Court warns, is critical.

Ok, but what about the Petitioner's efforts before the trial court to amend orally their petition to add conditional use permit applicant Buie Lakes, which the trial court denied?  Quite simply, the Court concludes that because the trial court lacked subject matter jurisdiction in the first instance, the trial court also "lacked the authority to allow them to amend their petition to cure this defect".  Most notably, the Court is unpersuaded by older precedent referenced by Petitioners and points to the recently-enacted statute -- N.C.G.S. 160A-393 -- which was not in effect at the time of older precedent and which clearly requires that Buie Lakes have been named as a respondent, here: "If the petitioner is not the applicant before the decision-making board whose decision is being appealed, the petitioner shall also name that applicant as a respondent."

Finally, in response to efforts by Petitioners to invoke and benefit from the North Carolina Rules of Civil Procedure, the Court keeps out of the argument that the Rules of Civil Procedure apply in certiorari proceedings conducted pursuant to N.C. Gen. Stat. § 160A-393, "which, as we have already noted, bear a much greater resemblance to appellate proceedings than to ordinary civil actions".  Certain Rules do apply, the Court notes, to certiorari proceedings but the Rule Petitioners seek to apply -- Rule 15(a) -- is not determined to be one such Rule.

Look to the statutes, Elaine, look to the statutes.


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 and "like" us on Facebook here.
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