Plan Local Approvals Carefully!

Plan Local Approvals Carefully!

Variance from Use Restrictions Can Be Tricky

By Jon A. Schmaltz, Partner; and Maggie Miran, Law Clerk; Burke Costanza & Carberry LLP

Real estate owners and developers often rely quite heavily on “governmental approval” contingencies prior to acquiring land or proceeding with development plans. Commonly, such approvals pertain to zoning and land use. Few of those are as important – and sometimes unpredictable – as variances from use restrictions or development standards.

One recent case in Rush County illustrates the need to carefully consider the risks and opportunities presented in seeking relief from local ordinances in obtaining these approvals. The facts surrounding this case are complex, but they stem from a developer’s intention of obtaining zoning approvals for a wind energy conversion system to include 65 wind turbines. The developer sought a special exception from the use requirements of the local zoning ordinance. Some landowners agreed to allow the developer’s use of their land, while others were reluctant or objected. The special exception was sought to be issued by the county’s board of zoning appeals, or BZA.

A BZA has authority to determine whether a special exception should be granted and under what conditions. Typically, those conditions pertain to the safety and welfare of other owners or members of the community. In this particular situation, many landowners opposing the development expressed concern over harmful effects of living near wind turbines. These opponents advocated for larger distances between their homes and the wind turbines than those proposed by the developer.

During the BZA’s public hearings on the developer’s request, each side presented evidence about what constituted a safe distance between the wind turbines and the residences of non-participating landowners. The local ordinance required a 1,000-foot setback from residential dwellings, but the opposing landowners proposed a setback distance of 2,640 feet. The developer proposed a setback of 1,400 feet.

The BZA approved the special exception subject to a setback of 2,300 feet, citing the health and safety of nearby owners as a motivating factor. Dissatisfied with this ruling, the developer sought a trial court’s review of this determination; however, the trial court upheld the BZA’s approval and conditions. The developer then appealed that court’s ruling to the Indiana Court of Appeals, claiming, first, that the trial court should not have allowed the group of non-participating landowners to intervene in the suit and, second, that the court erred by allowing the BZA’s determination of a setback that was larger than, and measured differently than, the setback provided in the ordinance.

The Court of Appeals upheld the trial court’s ruling. Because the opposing landowners claimed their property values and personal health would be significantly and directly affected by the outcome of the court’s review, they were properly allowed to intervene and participate in the court action. With respect to the BZA’s determination and conditions to the special exception approval, the Court found that, because a BZA is an agency with expertise in zoning matters, its determinations are presumed to be correct and will only be reversed if the BZA’s decisions are arbitrary, capricious, or constitute an abuse of its broad discretion. The Court also interpreted the zoning ordinance’s setback requirement as a minimum distance, not one that a developer was entitled to rely on and use in its development plan.

For each real estate owner, developer, and project planner out there, the lesson is this: When seeking local zoning approvals, be sensitive to the concerns of neighboring owners and residents and enter into the due diligence process knowing that Boards of Zoning Appeals have broad authority and discretion in granting approvals and imposing conditions. There are no absolute property rights to which these processes must yield. Be careful, listen to neighbors, and plan ahead!