Posted by: Patricia Salkin | February 16, 2014

MN Supreme Court Holds that Application and Receipt of a Conditional Use Permit Does Not Automatically Waive Nonconforming Use Status

Wapiti Park Campgrounds, Inc. owns and operates a campground. At the Wapiti’s inception, there were no zoning ordinances regulating the use of the park. Approximately seven years later, the City enacted a zoning ordinance that effectively made campgrounds a non-permitted use in the area where Wapiti was located. However, because Wapiti was using the land as a campground prior to the zoning ordinance it did not abide by the new zoning laws, and continued to operate as a campground as a legal, nonconforming use. Several years later, the City administered another amendment to the zoning ordinance allowing campgrounds as a conditional use. Although Wapiti was entitled to continue its use of the park as a campground based on nonconforming use, in 1984 it applied for, and was granted, a conditional use permit to use the park as a campground, as well as several other licenses. Yet again, four years later in 1988, the City amended the zoning ordinance to prohibit campgrounds altogether.

Wapiti only had one building on the campground premises, which a fire completely destroyed in 1999. In 2000, Wapiti sought to replace the building and applied for an interim-use permit per the City’s instructions “because the building was an accessory structure to the nonconforming use as a campground.” The City granted the permit, which was valid for ten years, and Wapiti began construction on the site. In 2010, when the permit expired, the City approved Wapiti’s renewal request. However, upon a later inspection, the City found that there were individuals using the park as a permanent residence, meaning there were camping vehicles without wheels set up in the park, and the City found this violated Wapiti’s conditional use permit. The City provided Wapiti with an opportunity to rectify the violations and comply with the conditions of the conditional use permit, but Wapiti failed to comply. As a result, the City denied Wapiti’s renewal request for the interim-use permit to replace the building and revoked the conditional use permit to operate the park as a campground; litigation ensued.

Wapiti argued that because the campground was operating as a nonconforming use that it did not need a conditional use permit to continue to operate as such, and that even if the campground’s operation was not a nonconforming use that “the City’s revocation of the permit was unreasonable and arbitrary.” Wapiti also argued that when it applied for the interim-use permit in 2000 that it actually had the right to replace the building without obtaining the permit because the building as an accessary to the campground. The City replied with a counterclaim seeking to enjoin Wapiti from operating the campground until it complied with the conditional use permit.

The district court agreed with Wapiti and concluded that the City could not revoke the conditional use permit because the campground was a nonconforming use. The district court also found that Wapiti was entitled to replace with building without an interim-use permit because it was an accessary building and the value of its damage was less than fifty percent of the value of the campground. The court of appeals reversed, finding that the campground did not become a nonconforming use until the most recent zoning change in 1988, and that the conditional use permit Wapiti was granted in 1984 remained in effect, and Wapiti was in violation of those conditions. Therefore, because Wapiti was in violation of the permit it did not have the right to continue to operate the campground based on nonconforming use and the City was authorized to terminate the permit. However, the court of appeals did not resolve Wapiti’s claim about the accessary building, and the Supreme Court of Minnesota granted review.

The court first analyzed the effect of the conditional use permit on the campground as a nonconforming use, and if so, whether the City had the authority to terminate the campground as a nonconforming use as a result of Wapiti obtaining a conditional use permit and the subsequent revocation of that permit. The court found that it was undisputed that the campground became a nonconforming use in 1980 when the first zoning ordinance was enacted. Next, the court addressed whether a party “who voluntarily complies with a later-enacted zoning ordinance, relinquishes the nonconforming-use status and the right to operate under that status in the future.” Meaning, whether Wapiti relinquish the campgrounds nonconforming use status in 1984 when it received a conditional use permit to operate as a campground. The court found that unless a landowner validly waives the right to continue a nonconforming use by using a conditional use permit, that the landowner does not surrender that right. “A landowner must validly waive such nonconforming use rights before a municipality can alter or extinguish the nonconforming use through further land-use regulation.”

The court then addressed whether Wapiti in fact waived this right. The court stated that the definition of waiver in Minnesota is “the intentional relinquishment of a known right,” where the relinquishment requires knowledge of the right, as well as, the intentional waiver of the right. The court found that Wapiti’s conditional use permit, on its own, did not constitute a valid waiver. The City failed to establish that Wapiti intended to waive its rights by merely obtaining the permit. Therefore, the permit did not change the campground’s nonconforming use status, nor did it govern that use from 1980 to the present.

The court next addressed whether the City’s revocation of the permit was an effective method of termination of the campground as a nonconforming use. Under the statute, the City had the right to terminate a nonconforming use based on (1) its eminent domain power, (2) a showing that the use was discontinued for more than one year, (3) that the use was destroyed by fire “to the extent of greater than 50 percent of its estimated market value,” (4) or that the use is a nuisance. It is clear that the revocation of a conditional use permit is not one of the authorized methods of terminating a nonconforming use under the statute. As such, the court determined because the legislature could have easily added this to the statute it would not read such language into it. Therefore, Wapiti’s right to operate the campground, as a nonconforming use was not terminated when the City revoked the conditional use permit.

Lastly, the court addressed whether Wapiti was required to obtain an interim-use permit in order to replace the accessory building. Wapiti argued that because the building was an accessary to the campground as a nonconforming use that it did not need to obtain an interim-use permit. The City countered and argued that it was required to obtain a permit because the damage exceeded more than fifty percent of the value of the building. The court found that Wapiti must comply with the zoning ordinance in effect at the time of replacement, which stated that the damage to the building must be more than fifty percent, as opposed to a later enacted statute, which stated the damage must be more than fifty percent of the value of the entire nonconforming use. Therefore, the court found that the City was authorized to require Wapiti to obtain an interim-use permit prior to replacing the accessary building. The court reversed and remanded the court of appeals, holding that Wapiti could lawfully continue operating the campground as a nonconforming, but could not lawfully use the accessary building until it obtained an interim-use permit and complied with its conditions.

White v. City of Elk River, 2013 WL 6252431 (MN 12/4/13)

The opinion can be accessed at: http://www.courthousenews.com/home/OpenAppellateOpinion.aspx?OpinionStatusID=90575


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