Posted by: Patricia Salkin | November 30, 2015

WI Appeals Court Holds Property Owner did not Acquire a Vested Right in a Planned Development District Zoning Classification under the Building Permit Rule

McKee Family I, LLC, challenged a decision of the City of Fitchburg, Wisconsin, to rezone property that McKee owned. McKee argued that, in getting as far as it did in the City’s development planning process, it obtained a vested right in a Planned Development District (PDD) zoning classification for the two lots, and that this vested right precluded Fitchburg from rezoning the property to a Residential–Medium (R–M) classification. McKee argued that when Fitchburg rezoned the property to R–M it improperly prevented McKee from developing the property with the higher housing density, as allowed under the former PDD classification. The circuit court granted summary judgment to Fitchburg, dismissing McKee’s claims. As pertinent to the preserved issues that McKee raised on appeal, the court concluded that McKee did not have a vested right in the preexisting zoning classification and that its constitutional claims failed as a result.

The court first noted that property owners obtain no vested rights in a particular type of zoning solely through “reliance on the zoning” but only acquire vested rights after the submission of a building permit application that conforms to the zoning or building code requirements in effect at the time of the application. Here, even though the council approved a general implementation plan, the City never approved the specific implementation plan and no building permit application was submitted. Applying the building permit rule, the court therefore found that McKee’s claims failed because it never acquired a vested right in the PDD zoning classification.

McKee next argued that a vested right is a necessarily implied authorization in the legislative approval of a PDD district and that the court should decline to apply the building permit rule under the circumstances presented because “PDD zoning is contractual in nature”. The court disagreed, however, and found that legislative acts are presumed not to create contractual rights because the primary function of a legislative body is to make laws that effectuate policies, not to make contracts that bind future legislative bodies. Moreover, there was nothing in the statute to suggest that once a municipality classifies real property with the PDD zoning status the municipality is thereafter contractually obligated to maintain that zoning classification indefinitely, or at least until the property owner consents to a change in the classification. Accordingly, the court held that McKee did not acquire a vested right in the PDD zoning classification under the building permit rule.

McKee Family 1, LLC and JD McCormick Company, LLC v City of Fitchburg, 2015 WL 6739735 (WI App. 11/5/2015)

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