Sunday, March 5, 2017

It Doesn’t Fit

In re B&M Realty, LLC, 2016 VT 114

By Elizabeth Kruska

Full disclosure: I live in Windsor County and for many years have regularly traveled past the parcel of land at issue in this case.

Exit 1 on Interstate 89 actually dumps out in two places. If you’re involved in the northbound side of 89, you enter or exit at a ramp on Route 4 which is about three miles west of White River Junction. If you’re involved in the southbound side of 89, your entrance and exit is on a different spot of Route 4 about five miles west of White River Junction. There’s a gas station and a couple other businesses near this exit, but no other commercial development to speak of.

Between the two exits there is a fairly large, sweeping curve, and an overpass bridge that is somehow inexplicably always icy. I also once randomly saw a sheep on that bridge. I called the Hartford police because I didn’t want the animal to get hit, and the dispatcher immediately said, “Are you calling about the sheep? We know all about it.” All that to say (sheep not withstanding) that this isn’t exactly an ordinary interstate interchange.

Back in 2003, B&M (let’s call them Applicant) bought up about 167 acres of land behind the gas station near the southbound entrance/exit I described above. The opinion doesn’t go into detail, but hey, I’m a northern Windsor County resident, and I can tell you where things are. In 2005 Applicant sought to have the land rezoned to allow for development. In 2006 they submitted a sketch for their development called the “Quechee Highlands Project.” It appears that this is as far as things got until 2012. More on that in a second.

In 2007, a regional development plan was created that set forth how development should be done in the Two Rivers Ottauquechee Regional Commission planning area. This includes plans for how development ought to be done in this particular region of the state. There was citizen input, and it was decided that development should be concentrated in designated areas, like downtowns. It was also decided that there would be a concerted effort to prevent major development at highway interchanges, presumably so each entrance and exit area isn’t congested and full of box stores, and the like. (I’m looking at you, Exit 12.)

In 2012, Applicant went to the Hartford Planning Commission, this time with a plan and a sketch, seeking a permit. The plan was going to be to build a mixed-use development including some retail, but also a restaurant, other commercial space ,and some residential space. There were a few phases to this plan, but ultimately it was envisioned it would create a mixed-use business center that would look like a smaller version of Church Street in Burlington. The Planning Commission denied it unanimously because this didn’t fit with the 2007 regional plan.

Applicant appealed to the Environmental Division and made a few arguments. First, they argued that the 2007 plan didn’t apply since they had started this process in 2005 with their zoning application. They argued alternatively that it didn’t apply because in 2006 they filed a sketch of the project. There was a Hartford municipal plan and a regional plan, and they conflicted. The Environmental Division found that the regional plan controls when there is such a conflict. The Environmental Division took evidence and ruled that the 2007 plan applies, but also that the proposed development is not inconsistent with the 2007 regional plan.

The parties both appealed, and SCOV reverses on the finding that the development is consistent with the 2007 plan. That effectively means the construction for the Quechee Highlands Project is on ice.

This opinion is quite lengthy. I’ll do my best here.

For starters, SCOV disagrees with Applicant’s assertion that the 2007 plan does not apply to its project. This has to do with when a party’s right vests. In Vermont, which is in a minority of states on this one, the right to follow a particular rule vests at the time a permit application is filed. That is to say if someone files for a permit in Year 1, but the rules change in Year 2, the rules from Year 1 are what apply. The applicant only needs to have filed; there need not have been any substantial work started on the development in order to preserve that right.

Simply requesting to amend a zoning regulation isn’t the same as filing a permit application. Maybe the zoning regulations need to have been changed before the permit application could be filed, but in that case it would need to be two separate steps. In this case, even though Applicant sought to get the zoning changed, no permit application was filed until several years later. The sketch along with the long-range idea of a project filed in 2006 wasn’t enough either.

SCOV also concludes that this project would have a substantial regional impact, which means the regional plan, instead of the municipal plan, applies. Applicant argues that the Legislature gave the regional boards too much power to define what a “substantial reasonable impact” actually is. Applicant agrees that the proposed amount of commercial and industrial square footage was in excess of what's allowable under the 2007 plan, but says that the number created by the regional commission was arbitrary. Applicant essentially argues that it’s possible to have businesses like an online-only antiques dealer in the neighborhood taking up lots of space, but not really creating any traffic or other impact.

SCOV is not moved by these arguments. The regional planning boards get plenty of guidance from the enabling statute (the Vermont Planning and Development Act). Furthermore, the reason for having regional boards is so that the legislature doesn’t have to get involved in micromanaging a bunch of different regions in the state, each of which has different interests and geographical makeups. What works in Newport may be very different than what works in Bennington. SCOV also points out that even though the boards create the plans, ultimately the buck stops with the courts, so it’s not as if the regional boards are ruling development as if they were sheriffs in the wild west.

The regional plan uses the number 20,000 square feet as the acceptable threshold for commercial and retail space in determining whether there will be a substantial regional impact. Let’s be real a second: taking an undeveloped chunk of land behind a gas station (which is a relatively bustling place, but not a commercial center) and turning it into “Mini Church Street South” is going to require widening Route 4, and possibly adding a traffic light. I can’t tell you how many times I’ve almost gotten into accidents right there with people who zoom onto Route 4 from the interstate without looking, or who choose not to use the turning lane to enter the interstate. And in the winter, forget it. It’s a sloppy, icy mess that could only be made worse with more traffic.

SCOV then sets forth the legal framework it uses in examining a regional plan. They treat regional plans like statutes, and review de novo. When an applicant tries to get an Act 250 permit, they have to show the proposed project fits within the bounds of the regional plan. The plans need to guide growth and development so it’s done in an environmentally-sensitive way, but also so that things can actually get done. The plan needs to be clear enough so anyone reading it can understand it. Plans can include recommendations and goals, but should be clear about what is a goal and what is a requirement. The plans need to be examined as a whole in order to get the clearest sense of what the regional board means to accomplish with the plan.

With all this in mind, SCOV reasons that by examining the proposed project in the framework above that it just doesn’t fit. If it doesn’t fit, you must not build it in Quechee. Good thing Johnnie Cochran wasn’t involved in this litigation. Of course, he died a while ago, so that wouldn’t have worked out anyway.

The 2007 plan is clear that principal retail establishments are meant to be put in town centers, downtowns, or other designated growth areas. The point of doing this is to prevent sprawl and strip malls near the interstates. This is pretty clear. The plan allows for travel and trucking service-related businesses near the interstate (like the existing gas station at Exit 1), because that helps facilitate travel and commerce.

The proposed project is not in a downtown or a town center, and Applicant didn’t seek to have the area turned into a designated-growth area. Applicant tried to argue that it wasn’t principally retail, because it’s not more retail than anything else. There’s proposed housing and commercial space, as well. The Environmental Division adopted the idea that the project, when viewed as a whole, was not principally retail. A “principal retail establishment” on a smaller scale, would be like a building that has a store or a restaurant on the ground level and an apartment above. It’s principally retail, even though the building is used for a couple different things.

Regardless of how “principal retail establishment” is defined with respect to this particular project, this whole project is inconsistent with the regional plan. Even though the goals are all good (we are sorely in need of more housing in this area, and nobody’s going to be sad with more jobs and businesses), it’s a little like Cinderella’s stepsister trying to mash her foot into the glass slipper. It just doesn’t fit.

SCOV concludes that the trial court’s interpretation of the plan is sort of internally inconsistent. On the one hand, the plan clearly says “no sprawl.” But if an applicant disguises sprawl by characterizing it as “mixed use” and “not principally retail” it’s still sprawl. It still doesn’t fit with the overall plan.

The trial court looked at the plan and found that the phrases “major growth or investment” and “planned settlement area” were undefined and unclear, and thus unenforceable.

SCOV believes the 2007 plan is pretty clear that it wants to encourage growth and investments in existing downtowns. I worked in White River Junction for a long time, and during that time the downtown went from “mildly shady” to “kind of a cool little town.” This is probably due to efforts by the regional board to encourage businesses to do their work in downtowns as opposed to trying to set up shop on the fringes.

The Exit 1 neighborhood has the aforementioned gas station, but that’s about it. There are no other developments there. It’s not really a commercial center, and it’s specifically noted in the regional plan that it’s not an appropriate place to create a growth center. It’s a good place to fill up your car, get a snack, and make a phone call. This is perfectly permissible under the regional plan. It’s a business, but it’s not really a destination. Quechee Highlands would become a destination which would necessarily increase traffic, and would have a substantial impact on the area.

So, all this having been said, Applicant’s project doesn’t conform to the regional plan, and the trial court erred by finding that it did.

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