New Hanover County Denies Rezoning Request: Can the Developer Appeal and Win?

Under North Carolina law, if a landowner is denied a request to rezone certain property, an appeal can be taken to the local county Superior Court. An important legal question is: how likely is a developer to succeed in challenging the denial of a rezoning application?

This recently happened in Wilmington in Hanover County. See news report here. KFJ Development Group wanted to develop an eight-acre parcel of land across the river from downtown Wilmington. As reported, KFJ planned to build 550 condos, 300 apartments and 100,000 total square feet of retail and restaurant space spread across three high-rise buildings linked by pedestrian walkways. The project was to be called the Villages at Battleship Point and also included parks, river walks and other outdoor recreational areas. KFJ sought to amend the County's Unified Development Ordinance to establish a new zoning district, the Riverfront Urban Mixed-Use Zoning District. Staff for the County Planning Board recommended approval of the rezoning application, but the Planning Board voted 5-1 to deny a new zoning district.

So, what is next for KFJ? Can they appeal the Planning Board's denial and what are the chances of success?

Answering the question depends on the legal standards that would be applied by a court of review and the facts and circumstances of the denial. As discussed in the case of Coucoulas/Knight Properties, Inc. v. Hillsborough, 683 SE 2d 228 (NC Court of Appeals 2009), the Planning Board's decision will be upheld as long as the decision was not arbitrary or capricious. In evaluating whether a decision is arbitrary and/or capricious, courts apply the "whole record test" which means the reviewing court will examine all competent evidence in order to determine whether the decision was supported by substantial evidence. The courts give substantial deference to Board decisions. If the evidence is debatable or there are reasonably conflicting views, then, generally, courts will not interfere. As quoted in Coucoulas, the "settled rule" is that "... the court will not substitute its judgment for that of the legislative body charged with the primary duty and responsibility of determining whether its action is in the interest of the public health, safety, morals, or general welfare."

Further, courts have held that "substantial evidence" is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.

With respect to the Villages at Battleship Point, the media reports do not detail the reasons given by the Planning Board for the denial of the rezoning effort. Planning Board members are quoted as stating that they felt "uncomfortable" with the project. One Board Member said the project did not "sit well" with him and he felt that approving the district would be like "engineering a problem" for future county residents. The Board Chair said that he was worried about the size of what could be allowed in the new district. He is quoted as saying: “The intent is good, but the scale just seems excessive to me." Opponents claimed that the project would exacerbate flooding and increase traffic.

Based on court legal standards, these types of statements are unlikely to succeed in preventing a court from overturning the decision to deny the rezoning application. In general, feelings by decision-makers are not deemed relevant or substantial evidence.

Presumably, media reports have not described the more-detailed reasons expressed by the Planning Board. Under North Carolina law, the Planning Board is required to approve a statement describing whether its denial is consistent with an adopted comprehensive plan and any other officially adopted plan that is applicable. The Planning Board is also required to briefly explain why the Planning Board considers the denial to be reasonable and in the public interest. While the statement by the Planning Board is not reviewable by a court, its content is part of the "whole record test" used by courts to determine if a decision is arbitrary and/or capricious.

In the final analysis, it is not easy for developers and others to win an appeal with respect to a rezoning request. Given the legal standard, courts will likely defer to a Planning Board's judgment. It is not too difficult to state plausible reasons for a decision to deny or approve a rezoning request.

For more information, and to schedule a confidential consultation with experienced and dedicated zoning and 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.