Posted by: Patricia Salkin | March 26, 2016

LA Appeals Court Affirms the City’s Denial of Initial Site Plan and Upholds Immunity for the City

GBT was interested in purchasing a B-3 zoned lot located at the junction of Jefferson Paige Road and Pines Road in Shreveport, La. The 1.13-acre parcel was on the opposite side of the street from a Family Dollar, which was zoned as a B-2 parcel. GBT asked the Metropolitan Planning Commission (“MPC”) to review the site plan and the MPC issued a positive report leading GBT to believe that there were only few issues with the site plan. At the public hearing, the MPC stated concerns about having similar businesses directly across from each other, but only recommended some changes to the façade and landscaping. The decision was set aside to allow GBT to make the necessary modifications.

At the second hearing, MPC changed its position and rejected the plan stating that there were concerns about the proposed size of the store as compared to the size of the lot and that the plan did not comply with its 2030 “Master Plan.” GBT appealed to the City Council who unanimously agreed with the MPC’s denial. GBT then appealed to the First Judicial District Court, who over turned the City Council’s decision and approved the initial site plan.

Even though GBT received approval for the site plan, it commenced an action against the City for wrongful denial. GBT claimed that the City’s reasons for the denial were “contrived” and that the City’s actions were “malicious and intentional.” During the trial, GBT argued that site was a B-3, which was a use by right zone, should not have been rejected because the Family Dollar store across the street was in a more restrictive B-2 zone. Experts were called to support the arguments on both sides as to why the City denied the intial site plan. The reconvened District Court held that the GBT could not recover damages because the use by right zoning for the property did not give an automatic right to build even if the project complied with the use by right zoning. The city zoning board had the discretion to disapprove the site plan to “ensure the safe, efficient attractive and well-ordered community.” Furthermore, the court observed that the deal between GBT and Dollar General had already “broken down” after the District Court’s ruling that ordered the approval of the initial site plan because the General Dollar was in favor of changing the site plan to accommodate the concerns of the City. GBT and General Dollar disagreed about the need for the modifications and the deal did not proceed. The court dismissed GBT’s action against the City. GBT appealed to The Court of Appeal of Louisiana, Second Circuit.

The Circuit Court noted that there were three other times that the City has come before the court where it initially supported the proposed site plan, which was for a B-3 with use of right zoning, and changed their position at the public hearing by stating its opposition. This case was differentiated, since it is a tort action instead of the disapproval of use by right. However, there are similarities among the cases that would allow the court to make the comparison.

BGT argued that the City was not shielded from liability as the District Court had held and that the court erred in determining that even if the City was not shielded that it did not cause the damages. BGT continued that the City had no discretion to deny the site plan and if it had discretion that the City failed to show that, it had a legitimate objective in denying the plan. The City has followed a similar pattern when deciding other B-3 use by right site plans: approving part of the plan, suggesting changes, and then denying the plan after the public hearing. In the first of these cases this court held that a “council’s decision to deny a use by right is subject to strict scrutiny.” The second case the council rejected a site plan for use by right that fully conformed with the zoning plan; the court recognized that a city council denial was allowable as long as the decision was not an “arbitrary and capricious government action.” The third case the court held, a municipality may deny, at its discretion, a site plan that complies with use by right zoning. If denial must meets strict scrutiny and is considered in favor of the proposed use of the owner, the denial will stand.

The Council was within its right to deny the site plan even though the plan conformed with the use by right zoning. The City was entitled to immunity and the decision was affirmed.

GBT Realty Corp. v. City of Shreveport, 180 So. 3d 458 (La. Ct. App. 2015)


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