Posted by: Patricia Salkin | July 31, 2009

Highway Beautification Act Regulations Prohibit Local Governments From Amending Zoning Solely to Accommodate Billboards

The subject property in an R2B zone (one and two family medium-density residential) is located less than 660 feet from an interstate highway and within a “Billboard Zone” created by the City in 2003 as part of a comprehensive zoning plan.  As part of a litigation settlement in 2006, the City issued a permit to petitioner, Lamar Advertising, to place a billboard on the property.  Petitioner then entered into a lease with the property owner and applied to the New York State Department of Transportation (“DOT”) for a permit.  DOT denied the permit on the ground that the property was in an area zoned for residential purposes and was not located in a commercial or industrial zone which is required by Highway Law §§ 88 and 17 NYCRR 150.5(b)(1).  DOT was sent a copy of the City’s stipulation allowing the billboard and again denied the petition.  The property was rezoned from R2B to C-1, a neighborhood commercial district in 2007.  Lamar Advertising submitted a new application to DOT with a copy of the ordinance, which was again denied because DOT refused to recognize the zoning change for purposes of outdoor advertising control, stating that the action was not part of a comprehensive zoning plan and the parcels were rezoned for the purposes of permitting Lamar Advertising’s requested sign. 

Lamar Advertising appealed and the trial court annulled DOT’s determination and directed the Department issue the permit, determining that neither state nor federal law provided a valid basis for DOT’s refusal to recognize the rezoning and that DOT’s determination did not follow the federal interpretation of the regulation, which ultimately operates to avoid “sham zoning.”  DOT had determined, however, that the City’s rezoning was done primarily for the purpose of permitting a billboard because the property surrounding the site continued to be used for residential zoning purposes.  The State appealed. Central to the appeal was whether the DOT’s denial of the billboard permit was unreasonable and irrational based upon state and federal billboard placement regulations. 

The appeals court held that DOT’s determination was reasonable based on the fact that the zoning of the surrounding area was unchanged and that under applicable federal regulations, it could not recognize the rezoning as valid for outdoor purposes based upon the original application stating that the property was residentially zoned, the lease agreement for a proposed billboard, the City building permit for the billboard, the litigation stipulation permitting the billboard, and the petitioner’s letter responding to the first denial by inquiring whether it would be necessary to return to the City “for them to change the zoning classification.”  Specifically, the Court noted that although “it is undisputed that the proposed billboard complies with federal, state, and city requirements in that it is located within 660 feet of an interstate highway and in the City’s “Billboard Zone” (see 23 USC § 131 [b]; Highway Law § 88 [5]; 17 NYCRR 150.5 [b] [1]),” the City’s actions did not comply with 23 CFR 750.708 (b), promulgated by the Secretary of Transportation pursuant to the Federal Highway Beautification Act which provides:

“State and local zoning actions must be taken pursuant to the State’s zoning enabling statute or constitutional authority and in accordance therewith. Action which is not a part of comprehensive zoning and is created primarily to permit outdoor advertising structures, is not recognized as zoning for outdoor advertising control purposes”

The Court also explained that the legislative history of 23 U.S.C. §§ 131(d) indicates that it was not the purpose of the regulation to give states unfettered authority in permitting billboards along state highways.  The Court observed, “Courts in other jurisdictions that have examined this issue have concluded that Congress did not intend to cede full authority over zoning with respect to outdoor advertising control to state and local governments.”

Lamar Central Outdoor, LLC v. State of New York et al., 2009 WL 1955611 (N.Y.A.D. 3 Dept. 7/9/2009).

The opinion can be accessed at: http://decisions.courts.state.ny.us/ad3/Decisions/2009/505706.pdf


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