Municipal Development Agreement: Found To Be Illegal Contract Zoning
June 08, 2020
In the Matter of Giora Neeman v Town of Warwick, __AD3d__, 2020 NY Slip Op 03112, the Second Department recently declared that a development agreement entered into between the respondent/defendant Black Bear Family Campgrounds, Inc. (“BBFC”) and respondent/defendant, Town of Warwick, (“Town”) as part of a settlement of a separate civil proceeding, constituted illegal contract zoning, and was therefore, null and void.
This is a cautionary tale of how making a deal with a governing body in exchange for zoning amendments can run afoul of the legal principle “contract zoning” – an illegal practice in which local officials cross the legal line between a legitimate planning process and an improper ceding of the municipality’s authority to regulate land use. As stated by the Court of Appeals “all legislation ‘by contract’ is invalid in the sense that a Legislature cannot bargain away or sell its powers.” Church v. Town of Islip, 8 N.Y.2d 254, 259, (1960).
Here, back in 1965, the Town of Warwick Planning Board (“Planning Board”) approved a site plan permitting 74 campsites on the BBFC property. Over the years, without approvals or permits, BBFC expanded to 154 campsites. In 2008, the Town issued numerous violations for BBFC’s illegal operations and zoning violations. In connection with settling this separate civil proceeding initiated by the Town, BBFC entered into a “Development Agreement” in which, the Town Board agreed that it would amend the zoning code’s time limit to stay at the campground from 120 days to 210 days and would modify the bulk requirements for campgrounds prior to the approval of BBFC’s site plan applications and variances.
In finding the Development Agreement null and void, the Court explained that “no municipal government has the power to make contracts that controls or limit it in the exercise of its legislative powers and duties”. The Court went on to state that the test is whether the Development Agreement committed the Town to a specific course of action with respect to a zoning amendment. Noting that the Town Board agreed to amend the zoning code to permit a 210-day occupancy limit, in exchange for BBFC’s agreement that such limit would apply to all campsites, the Court found that it was a contractual agreement between BBFC and the Town with consideration exchanged for legislative action that limited the Town Board’s authority to amend the zoning code until such time as BBFC would not be negatively affect by such a change.
Although not the subject of this blog, the Court also went on to find that the Planning Board adoption of its negative declaration was arbitrary and capricious.
Take away: Practitioners for property owners and municipal boards must carefully navigate negotiations between developers and local officials to avoid illegal contract zoning, which improperly cedes municipal authority to regulate land use.