In the last year, the Michigan Court of Appeals has already issued multiple decisions that impact planning and zoning within townships. These issues come before the appellate courts quite regularly as zoning decisions that result in a denial can cause the aggrieved party to file suit. The decisions that result from such litigation may require townships to consider tweaking or changing current practices. This month’s E-letter discusses decisions issued within the last year that impact site plan approvals, escrow provisions for zoning application review, rezoning decisions, and variances.
Site Plan Approvals Must be Appealed within 30 days
Township Planning Commissions have a significant role in approving site plans (although sometimes final approval is vested in the Township Board). Site plan approval is also a frequent action carried out by the Planning Commission as such review is performed on varied uses including:
- All land developments permitted by right (typically exclusive of single-family or two-family dwellings);
- All special uses;
- All planned unit developments; and
- All residential dwellings as part of a subdivision plat or condominium project.
The site plan process from an applicant’s prospective requires the arduous task of verifying compliance with multiple chapters of the Township zoning ordinance as well as obtaining signed and sealed site plan drawings (also a part of the process that can increase costs). This is an important part of the application process to provide the Planning Commission with sufficient information for meaningful review and approval. Due to the various number and complexity of conditions for some uses, site plan review can result in litigation over whether an approval or denial was appropriate based on applicable conditions.
The challenge to a decision approving or denying a site plan would result in an appeal, but not all Townships will have similar appeal processes. Some Townships will indicate within their zoning ordinance that an appeal must go to the Zoning Board of Appeals (and then thereafter to circuit court), or the zoning ordinance will indicate that an appeal would go to circuit court. More often, however, the zoning ordinance may be silent on this point.
A recent decision from the Michigan Court of Appeals indicates that an appeal of a site plan approval must be filed within the 30-day window provided by MCR 7.122(B). In this case, a development company purchased a 48-acre parcel of land to develop into a condominium complex. The city and a developer took two years to approve the site plan, which occurred on September 6, 2016.
Just short of one year later, a nearby condominium association (not the developer) sued the city for approving a site plan that did not comply with various statutes, codes, and zoning ordinances. They attempted to frame the complaint so as to avoid it appearing as an appeal of the site plan approval. The circuit court ruled against the condominium association because the complaint fell outside of the statute of limitations for appeals from zoning decisions. Under Michigan law, unless the state statute says otherwise, a zoning decision must be appealed within 30 days. Since the condominium associations appeal of the zoning decision was almost a year after the approval of the site plan approval, the circuit court dismissed the action. The Michigan Court of Appeals affirmed the circuit court, holding that the issues the condominium association raised about the site plan were alleged flaws in the city council’s decision that essentially amounted to an appeal (which they failed to timely take). But because the appeal fell outside of the 30 day statute of limitations to challenge the city council’s decision, the circuit court correctly ruled for the city.
The Court did clearly address the applicable time for filing an appeal of a “zoning decision.” Interestingly, the Court did not clearly address whether an appeal had to first go to the city’s zoning board of appeals before it could be filed in the circuit court for purposes of finality and exhaustion of administrative remedies. These are two legal principles that Townships should consider reviewing with their Township attorney anytime an appeal or original action is filed regarding a zoning decision against a Township.
Woodcreek of Ann Arbor Association v City of Ann Arbor, Michigan Court of Appeals 2019 (unpublished)
Townships may lawfully require escrow fees to offset zoning application review
Site plans, similar to other zoning applications to the Township, require the payment of an application fee. The application fee is designed to cover the costs of the public hearing, publication notices for the hearing and adoption, and administrative costs. These fees are normally nominal and many times the application fee does not cover all costs incurred by Townships to process an application.
Application fees, however, are not designed to cover the expenses of reviewing complex zoning requests, such as special land uses, site plan review for large projects, appeals, or textual amendments. To offset these costs, some Townships also include escrow provisions in their zoning ordinance, which allow the recovery of expenses for Township consultants to review the applications. Michigan Zoning Enabling Act (MZEA) enables local units of government to establish a fee schedule for reasonable administrative costs, but it does not clearly address require escrow fees. See MCL 125.3406.
The Michigan Court of Appeals has recently affirmed this right to collect escrow fees (although not based on the plain language of MCL 125.3406). A neighbor of a property owner building a fence and dumpster enclosure sought a site plan approval for his neighbor’s activities. The Township administrator declined, so the neighbor went to the zoning board of appeals to request an interpretation of the zoning ordinance. The zoning board of appeals required the neighbor to pay $1,500 in escrow for the cost of professional and legal review of the zoning ordinance.
The neighbor sued objecting to the Township's authority to collect an escrow fee. The neighbor claimed that the only statutory authority that the Township had to charge an escrow fee was for zoning permits. Since the neighbor only requested an interpretation of the zoning ordinance, he argued that he should not have had to pay the fee.
The Township in this case had a zoning ordinance that called for escrow fees for any appeal or application to the zoning board of appeals, with a filing fee as specified by resolution of the Township board. Since the zoning ordinance incorporated the filing costs as specified in a Township resolution, the Court ruled that the Township could charge the neighbor the escrow fee.
The end result is that Townships can impose escrow fees for zoning applications, including application for zoning permits and applications for variances or zoning interpretations. For those Townships not currently doing so, this case demonstrates that Townships may validly exercise such authority to collect escrow fees. A Township that adopts such regulation is not required to charge such escrow fees, but at least it provides the ability to do so with zoning applications.
Forner v Allendale Charter Township Supervisor, Michigan Court of Appeals 2019 (unpublished)
Townships must have a rational basis to deny or approve rezoning applications
Townships are required to review zoning applications and make decisions that are consistent with the language of the Zoning Ordinance. Those decisions must be rational and reasonable. Otherwise, a court may reverse the Township’s decision as the Court of Appeals did this year.
A company that owned an unlicensed medical marijuana dispensary sued the City of Lansing over a rezoning application denial. The company had owned a building since 2011. The city amended its zoning ordinance in October 2017 to limit medical marijuana dispensaries to general commercial zones, and to require that dispensaries be licensed. The building owners applied to be rezoned for general commercial use. The city zoning administrator and the planning board both recommended approval of the rezoning application. The city council, however, rejected the request.
The building owners brought a claim to circuit court stating that the denial of the rezoning application denied them due process. The primary reason the building owners cited was that they were treated differently then the other property owners in the area. The circuit court agreed and ruled for the building owners. The Michigan Court of Appeals affirmed the lower court. The city argued that a due process claim only applies to the overall validity of the zoning ordinance. The court of appeals disagreed, and noted that under Michigan law, due process claims apply to rezoning application denials just as much as claims against the whole zoning ordinance.
The Court was not satisfied by the arbitrary reasons relied upon by the city to deny the rezoning. The city had stated that the rezoning application was denied because it wanted to move marijuana dispensaries out of residential areas and into business corridors. The court on appeal, however, noted that the building in question was in a business corridor, and that the planning commission found that the rezoning would not impact the nearby traffic, environment, or future patterns of development. It was for those reasons that the Court found the rezoning denial was irrational.
This decision illustrates that Townships must follow their zoning ordinances and must not make decisions that are arbitrary and capricious. This means there should be a rational basis as to why a certain zoning request is approved or denied. As demonstrated in this case, it is often important to consider the recommendations proffered by the planning commission and the zoning administrator. If those recommendations are not accepted, then the Township should have a clear basis to decide against such recommendations.
Gamut Group, LLC v City of Lansing, Michigan Court of Appeals 2019 (unpublished)
Knowledge of a hardship at the time of purchase does not foreclose a variance
For most Townships, the enactment of the Michigan Zoning Enabling Act limited the ability to provide use variances. Many Townships are restricted to only providing non-use variances, which relate to dimensional provisions and qualitative conditions that are often included in zoning ordinances. The review of a variance request (which may include an escrow deposit as discussed above) goes before the Zoning Board of Appeals (“ZBA”). The ZBA may vary or modify provisions of the Ordinance where granting of a variance would not be contrary to the public interest and literal enforcement of the Ordinance. In reviewing an application for a variance, ZBAs are guided by principles within the zoning ordinance, which may include:
- Whether unique circumstances exist.
- Whether the special circumstances are not self-created.
- Whether strict interpretation would result in practical difficulties.
- Whether the alleged difficulties prevent use of the property.
- Whether grant of a variance is the minimum action that will make the property useful.
- Whether granting the variance will be generally consistent with the public interest and purposes and intent of the zoning ordinance.
Every Zoning Ordinance imposes some degree of difficulty on a property to which it applies since the restriction of the ordinance limits the uses to which the property may be put. It is only when the difficulty becomes overly burdensome to the property that a variance may be granted by the ZBA to provide relief from the terms of the ordinance.
Whether the special circumstances were self-created by the applicant is often times the focus of a variance request. In a decision issued by the Michigan Court of Appeals, the Court determined that merely purchasing a property with knowledge that a zoning restriction created difficulties for using the property would not disqualify the new owner from obtaining a variance. City of Detroit v City of Detroit Bd of Zoning Appeals, Michigan Court of Appeals (2019). This decision is actually consistent with a 2009 decision of the Michigan Supreme Court. Wolverine Commerce v Pittsfield Charter Township, Michigan Supreme Court (2009). Notably, the purchase of the property is not the same as a subsequent owner whose family created the difficulty. In such an instance, the Court has upheld denying the issuance of a variance because the practical difficulty was self-created by the family. Bierman v Taymouth Twp, Michigan Court of Appeals, (1985)
Zoning decisions can cause litigation, but so long as Townships follow the statutory authority provided under the Michigan Zoning Enabling Act and exercise their zoning authority reasonably, courts generally uphold the lawfulness of Township zoning decisions.
By Christopher S. Patterson
Fahey Schultz Burzych Rhodes PLC, Your Township Attorneys, is a Michigan law firm specializing in the representation of Michigan townships. Our lawyers have more than 150 years of experience in township law and have represented more than 150 townships across the state of Michigan. This publication is intended for our clients and friends. This communication highlights specific areas of law and is not legal advice. The reader should consult an attorney to determine how the information applies to any specific situation.