Explaining Burden Shifting When Seeking a Special/Conditional Use Permit

Under North Carolina law, municipalities and counties have the power to issue conditional use permits ("CUP"). See N.C. Gen. Stat. § 160A-381(c). These are sometimes called "special use permits'' depending on how the local ordinance is worded. A conditional (or special) use is one that is allowed by the relevant zoning ordinance, but that, per the ordinance, must satisfy certain facts and/or conditions listed in the ordinance. An example might be a church in an area zoned primarily for residential housing. Requiring a CUP for a church might be justified because of the additional building size, the need for parking and the potential impacts on local street traffic and congestion.

Most North Carolina municipalities and counties use the standard four general conditions approved in Kenan v. Board of Adjustment, 187 S.E.2d 496 (NC Court of Appeals 1972). The local ordinance may vary the words, but the conditions are:

• The use does not materially endanger the public health or safety
• The use meets all required conditions and specifications (like set-backs, height, square footage, etc.)
• The use would not substantially injure the value of adjoining property or, if it does, then the use is a public necessity and
• The must be in harmony with the area in which it is located and be in general conformity with the comprehensive plan

Some ordinances will add other conditions. For example, the City of Asheville 2016 ordinance expanded the fourth condition as follows:

• That the proposed use or development of the land will be in harmony with the scale, bulk, coverage, density, and character of the area or neighborhood in which it is located
• That the proposed use or development of the land will generally conform with the comprehensive plan, smart growth policies, sustainable economic development strategic plan, and other official plans adopted by the city

And added two more:

• That the proposed use is appropriately located with respect to transportation facilities, water supply, fire and police protection, waste disposal, and similar facilities and
• That the proposed use will not cause undue traffic congestion or create a traffic hazard

See PHG Asheville, LLC v. City of Asheville, 822 SE 2d 79 (NC Court of Appeals 2018).

Decisions with respect to granting or denying a CUP application are generally rendered by a Zoning Board, a Board of Adjustment or something similar. Sometimes, decisions are rendered by the relevant City Council.

By North Carolina statute, the decision-making process involves two-steps and burden-shifting. In the first step, the applicant has the burden of producing "competent, material, and substantial evidence" tending to establish that the use meets the conditions which the ordinance requires for the issuance of the CUP. In the second step, after the applicant has established its prima facie case, the burden then shifts to those opposing the CUP application. Essentially, those opposing must rebut the prima facie case with their own "competent, material, and substantial evidence."

If the applicant has established its prima facie case, and if there is no rebuttal, then that the applicant is entitled to the issuance of the CUP. As the Court of Appeals said in the Asheville case linked above, once the applicant has “... satisfied its burden of production, … in the absence of competent, material, and substantial evidence to the contrary, [the applicant] is entitled to issuance of the CUP as a matter of law.”

North Carolina courts have defined "substantial evidence" as evidence that is relevant to the issue and is such that "a reasonable mind" would accept it as adequate to support a conclusion. In more legalistic terms, "substantial evidence" is evidence sufficient "... enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury." Asheville at 85.

Evidence presented by the applicant cannot be rebutted by conclusions which are speculative, sentimental, personal views or by views expressed by lay witnesses. For example, in the Asheville case, the City Council denied a CUP application to build an Embassy Suites hotel. On the question of traffic safety, the applicant submitted expert reports and opinions that the hotel would not cause undue traffic congestion or a hazard. The City Council rejected that evidence based, in part, on comments made by a member of the public at the hearings that there was a "blind hill" with limited visibility near the proposed hotel's parking entrance and exit that would be a danger to drivers and pedestrians.

On review, the Court of Appeals overturned the City Council's determination. The court held that "[t]he speculations of lay members of the public and unsubstantiated opinions of City Council members do not constitute competent evidence contra under the statute or precedents to rebut [the applicant's] traffic analysis." Asheville at 92. All the other reasons for the City Council's denial of the CUP application were likewise rejected for similar reasons. The court ordered the City to issue the CUP.

For more information, and to schedule a confidential consultation with experienced and dedicated land use attorneys in Charlotte, contact Arnold & Smith, PLLC. Use our “Contact” page or give us a call at 704.370.2828. We handle land use, zoning and condemnation legal matters in Mecklenburg County and elsewhere in North Carolina. We have offices in Charlotte, Lake Norman, and Union County.