Friday, March 1, 2013

Hooray for the Generals!

In re Stowe Highlands Merger/Subdivision Application, 2013 VT 4.

Isn’t it a shame?  Here we are in the 21st century with the whole of history at our fingertips.  A few key strokes on You Tube and we can watch the I Have a Dream Speech while over on some blog we can read an in-depth discussion of each episode of the Jerry Van Dyke series, My Mother, the Car.  Yet, none of this absolute stream of information can take the place of the thrill that once came from a mixture of anticipation, rumor, and not knowing whether the good guy or the stooge would win in the end.

I am talking of course about watching the Harlem Globetrotters trounce the Washington Generals.  For a kid who was lucky enough to get seats at the Richfield Coliseum to watch Meadowlark Lemmon and his crew clown around and over the Hapless Washington Generals, what could ever compare with sitting in the stands, thinking . . . Is this the night?  Will the Globetrotters pull it out?  Could the Generals win?  Tonight?

The thrill was in the what if.  Sure the Globetrotters won every time, but there was always that chance that you could be watching history, watching the patsy win.  Well, that was enough to knock you out of your seat even if you wanted the Globetrotters to win more than anything else. 

Fortunately for Vermont legal observers, we have our own Generals to watch and for the past twenty years they have provided us with same type of hapless hijinks that mark their basketball cousins.

I am talking of course about Stowe Club Highlands.  If you do not know the name, then you have not been following Vermont land use law or SCOV cases for at least a generation.  Since 1995, Stowe Club Highlands has been the subject of no less than five different appeals to the SCOV and countless hours before local zoning and Act 250 Commissions.  They have run the gamut of Environmental Boards, Environmental Courts, and Environmental hearings. 

But let’s not let myth obscure the facts.  The story of Stowe Club Highlands begins with a Planned Unit Development in the late 1980s.  Originally, the proposal called for development of 55 housing units/lots and a 34-acre, 100-room hotel/conference center development.  Not long after gaining approval for this project, the Developers changed their plans, reduced the hotel to a 21-room “Inn” on 17 acres.  From here, the cases track the Developers’ increasingly creative attempts to further reduce and divide the hotel lot away into nothingness.

Along the way, the Developers unwittingly helped created the Stowe Club Highlands Analysis, which acts as a significant hurdle for any developer seeking to modify the conditions and terms of an Act 250 permit after it is issued.

In large part, though, the history of Stowe Club Highlands is one of failure.  In case after case and appeal after appeal, the courts and boards of this state have shot down one proposal to modify the development after the other.  In fact, the most famous test to determine if a permitee can modify the conditions and terms of a permit carries the name Stowe Club Highlands Analysis, which the Developers unwittingly helped created by asking, perhaps too much of an Environmental Board in the face existing permit conditions.

Under this SCHA test, a permitee may seek and obtain relief from a permit condition or term if she can show “(a) changes in factual or regulatory circumstances beyond the control of a permittee;  (b) changes in the construction or operation of the permittee’s project, not reasonably foreseeable at the time the permit was issued;  or (c) changes in technology.”  As you might expect, many apply, few establish that the necessary changes have occurred.  In fact, Stowe Club Highlands has yet to pass the Stowe Club Highlands Analysis and does not look to do so in the near future.

But every dog has his day, and today, Vermont’s Washington General’s get theirs, even if it is a low key approval of a minor modification.

In today’s case, the Stowe Club Highlands Developers sought to reduce the hotel lot from 17 to 12 acres and merge the remaining five acres among three other lots that it would then subdivide into 11 building lots.  Basically, it is a land swap—shrinking the hotel lot to bulk up the surrounding lots that are then divided into residential property that will sell without any further investment. 

At the local Development Review Board level, this plan was quickly deemed to be a change to the conditions and terms of the permit.  As a Resort Planned Unit Development, the Developers could not remove or alter their obligation to build a resort and the land at issue was dedicated to that purpose.  For the DRB, this issue had already been definitively answered by the SCOV one or two appeals ago.  Developers, at a minimum, will have to build a resort on the land.  A Stowe Club Highlands analysis followed, and the DRB rejected the application.  

Undaunted, the Developers appealed to the Environmental Division of Superior Court.  There, they found a more sympathetic ear.  The Environmental Court ruled that the alteration did not affect the footprint of the 21-room hotel and that the original permit did not require or condition that the entire hotel lot to be dedicated to the hotel.  Since the alteration did not modify the Developers’ primary obligation to set aside sufficient land and construct a 21-room hotel, the modification did not involve a term or condition of the permit and should be allowed to the extent that it complies with the Town’s current zoning bylaws and criteria.

On appeal to the SCOV, the Town and the Neighbors are unable to overturn the Environmental Court’s ruling.  The interested parties’ position was that while the permit did not explicitly require all of the property be dedicated to the hotel, it was implied.  Furthermore, the plats and maps filed with the Town for the original permits show the land dedicated as one hotel lot.  This, argued the Town and neighbors, created an implied term. 

The SCOV disagrees and notes that there is no express condition for the lot in the permit.  In a brief analysis, the SCOV notes that the case law strongly limits what the courts will consider a binding zoning permit to be.  This should come as no surprise to land use practitioners as both the SCOV and the Environmental Court have been slowly tightening the standard for what will be considered a permit condition to which the SCHA applies.  

In light of this and other decisions, the standard emerging is that unless a proposal contradicts an explicit and necessary condition on the existing permit, then there is no violation and the application may proceed under the lower scrutiny of a permit amendment.  In that case the basic question is whether or not it complies with the zoning regulations.  Just as the developer almost always loses in a SCHA, they almost always prevail under a straight application of the bylaws.

Not surprisingly, the SCOV affirms the Environmental Court in today’s case, noting that nothing in the filings precluded additional development on the site or the modification of lots so long as the intended hotel lots remainder and were sufficient for the proposed hotel project.

With that the SCOV gives the Generals their first win of the decade, if not the century.  More importantly, the SCOV gives the Developers some slack on the largest remaining parcel of land (anyone want to guess that the eventual hotel lot will be even smaller?). 

Looks like the Interested Parties Globetrotters will have to do some soul searching in the locker-room at halftime.  

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