MEMORANDUM
DATE:
July 11, 2002
FROM:
Melissa Ashburn, Legal Consultant
RE:
Zoning inquiry
You have advised me of a situation which has arisen in your City concerning an area which had
previously been zoned for multi-family housing. It is my understanding that the owners of the
approximately 16 acre tract obtained preliminary plat approval for a multi-family housing
development in 1997, or earlier, and received two or three continuances on the requirement that
they apply for final plat approval. Construction was not commenced and the property was
subsequently rezoned in 1998, pursuant to a comprehensive zoning plan. The subject property
is currently zoned R1, which does not permit multi-family housing. The owners are now ready to
develop the property. The City Planner applied to the Planning Commission for the rezoning of
the property, back to R3, so that the development could proceed. The Planning Commission
rejected the request to rezone, at which time the Commission chair commented that the city had
made a mistake in 1998 when adopting the zoning plan which changed the zoning to R1.
You have asked whether or not the developers of the property have “grandfather rights”, due to
the approval of the plat prior to the rezoning. The answer is no.
Although the case Toles v. Dyersburg, 39 S.W.3d 138 (Tenn. App. 2000), concerns the
issuance of a beer permit, it is applicable to the current situation in your City as facts of the case
are similar. In Toles, the owner and operator of a tavern surrendered their beer permit on July 1,
1998, after the expiration of their business license on March 31, 1998. The owner began
making improvements to the property, in expectation of renting the tavern to a new business.
On July 21, 1998, the renter, Ms. Toles applied for a beer permit and was advised that repair
work was needed on the building prior to issuance of the permit. She complied with the building
instructor’s direction, made the necessary repairs, and again applied for a beer permit.
Unfortunately for Ms. Toles, during her renovations, the area which included the tavern was
rezoned to R3, which does not permit the operation of a business selling alcoholic beverages.
Her application for a beer permit was denied, and she sought relief through the Court. The
plaintiff argued that she was “grandfathered,” due to her earlier application and her actions to
comply with requirements. The Court of Appeals disagreed, stating
It is clear that at the time the area was rezoned, no valid business license
existed for the property, nor was there a valid beer permit.
Tole at p.140. The Court is clear in the Toles opinion that in order to claim “grandfather” status
for relief from zoning regulations, the activity which the property owner wishes to continue must
actually be taking place on the property at the time the zoning change occurs.
You have raised the issue of the developers’ reliance on the city’s approval of the plat,
consisting of a $40,000.00 investment in the property. The argument did not work for Ms. Toles
in the above case, and was recently rejected by the Court in the case Parks Properties v. Maury
County, 70 S.W.3d 735 (Tenn. App. 2002). In the Parks case, developers of a commercial
warehouse project purchased two large warehouses based on assurances received from
officials with the planning commission that the Southern Standard Building Code requirement
that the warehouses be equipped with sprinklers would be waived for the project. After the
Director of Community Development refused to issue a building permit because the plans lacked
a sprinkler system, the developers sued for the issuance of a permit. The developers argued
that they had a property interest in the building permit, because they had invested a large
amount of money based on representations that the permit would be issued. The Court rejected
the developers’ claim, stating:
A property interest...exists if the local authority has no discretion to
decline to issue a permit, license, or other authorization to an
applicant who demonstrates compliance with all pre-existing
requirements.
Parks at 746. As the developers’ plans did not conform with the requirements of the building
code adopted by the county, they had no protectable property interest in the issuance of the
permit.
In the current situation in your City, since the developers took no action to start construction, by
applying for final approval of the plat and obtaining the numerous permits required for such
projects, their failure to act before the property was rezoned has caused them to lose the right to
develop the land for multi-family use. The City has no obligation to issue permits for the
development, and no obligation to rezone the property to the former classification.
You have also asked if the property must be rezoned before any construction can begin, and the
response is “yes.” The City has an affirmative obligation to enforce its ordinances, including the
zoning ordinance, and must take enforcement measures against the developers if construction
is commenced. Failure to enforce the zoning restrictions in this situation will set a precedent
which will limit the City’s ability to apply, and defend the application of, the ordinance when later
controversies arise.
I have consulted with Sid Hemsley concerning this situation, and he is in agreement with my
conclusions. Please let me know if you have any questions or need further information.