Posted by: Patricia Salkin | April 16, 2016

Fed. Dist. Court in OH Grants Permanent Injunctive Relief Against the Enforcement of a Charter Amendment Requiring the Development of a New Comprehensive Zoning and Development Plan

The Center for Powell Crossing, LLC submitted an initial design plan for mixed-use development of its property to the City of Powell’s Planning and Zoning Commission. The proposed development, named the Center at Powell Crossing, included sixty-four units of multi-family dwellings and 14,000 square feet of retail space. After receiving positive feedback from the Commission, Powell Crossing filed an Application for Preliminary Development Plan in October 2013, which unanimously approved the Preliminary Plan Application at its November 13, 2013 public meeting. The City Council’s approval of the Final Plan Application was memorialized in Ordinance 2014-10. Three residents of Powell filed petitions for an amendment to the Charter of the City of Powell, Ohio. This “Charter Amendment” was approved by popular vote in November 2014, and required that a commission of five private citizens be organized to draft a new comprehensive zoning and development plan, which at a minimum would prohibit high-density housing in the City’s Downtown Business District. The Charter Amendment further provided that the new comprehensive plan would not allow a mixed-use development project proposed by plaintiff The Center for Powell Crossing, LLC. At the time the Charter Amendment was enacted, Powell Crossing had not submitted any applications for a construction permit in furtherance of its approved Final Development Plan.

Petitioners first argued that the court did not have jurisdiction over plaintiff’s claims because they amounted to a disguised and unripe takings claim. Specifically, Petitioners argued that Powell Crossing asserted a takings claim by alleging the amount of the purchase price of the land in the complaint, and thus evincing Powell Crossing’s intent to seek the value of its land as compensatory damages. However, the allegation of the purchase price of the land appeared in the factual narrative section of the complaint, and was not repeated in the counts for relief or the prayer for relief. Moreover, Powell Crossing’s procedural due process claim did not rest on allegations of “diminution in the value” of the land, nor did it seek compensation for a taking.

As to its procedural due process claim, Powell Crossing argued that its property interest in the mixed-use development plan vested in October 2013 when it filed an application for approval of its preliminary plan of development. Here, because the City of Powell’s Municipal Code gives City Council broad discretion to approve, reject or modify the Commission’s recommendation, the act of filing a preliminary development plan application does not create an entitlement to final approval by City Council. The court nonetheless found that Powell Crossing did obtain a protected property interest in its development plan when City Council approved the plan, since property owners “have an interest in a discretionary benefit, such as a re-zoning ordinance, after it is conferred.”

The court next analyzed whether there was a deprivation without adequate procedural rights. The placement of the Charter Amendment on the ballot and its passage by voters were not “random” in the sense meant by the case law. Additionally, this was not a situation in which a state employee lost or destroyed property, as in Parratt and Hudson, or engaged in some other unforeseeable act. Moreover, the exercise of power in a manner that targets or singles out a property owner, without more, has not been recognized by the Sixth Circuit as a violation of procedural due process in the land use context; the issue of targeting by voters as substantive due process and equal protection concerns, and not as a procedural due process concern. The court found that the Charter Amendment deprived Powell Crossing of an already-granted property interest in its development plan, and therefore established the threshold elements of a due process claim (deprivation of a protected property interest). However, because the record contained facts supporting a rational relationship between the Charter Amendment and the City’s legitimate interests in traffic and public safety, Powell Crossing’s substantive due process claim likewise failed.

Lastly, Powell Crossing argued that the Charter Amendment’s broad delegation of power to the Commission, comprised of five private citizens, was unconstitutional. Here, the Charter Amendment mandated that the Commission’s plan ultimately be “legislatively adopted” by City Council, whose elected members comprise the City’s legislative body, and that all zoning ordinances must comply with the new plan. Furthermore, the delegation of authority to the Comprehensive Plan Commission is unaccompanied by discernible standards. The court found this standardless delegation of legislative power to five private citizens, each of whom directly represented the interests of area homeowners’ associations, plainly violated due process of law. Similarly, the court held that under Ohio’s state law citizens of a municipality may not exercise the power of referendum, by means of a charter amendment, so as to nullify City Council’s administrative action of approving Powell Crossing’s development plan.

The Center for Powell Crossing, LLC v City of Powell, 2016 WL 1165355 (SD OH 3/25/2016)

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