Posted by: Patricia Salkin | July 30, 2020

MN Supreme Court Holds Scope of a Property Owner’s Nonconforming-Use Rights is Defined by the Uses Lawfully Existing at the Time of Adverse Zoning Change

This post was authored by Matthew Loescher, Esq.

In 2013, appellant AIM Development, LLC, purchased property in respondent City of Sartell containing a facility for nonhazardous, non-toxic industrial waste, which had operated as a nonconforming use since 1989. The court of appeals defined AIM Development’s nonconforming-use rights based on the terms of a state permit in effect at the time that it purchased the property. Based on the terms of that permit, the court of appeals determined that the facility was limited to accepting waste from a nearby paper mill, which was later demolished.

As to when the use became nonconforming, the court found that “it is a fundamental principle of the law of real property that uses lawfully existing at the time of an adverse zoning change may continue to exist until they are removed or otherwise discontinued.” Consistent with the plain language of Minn. Stat. § 462.357, subd. 1e, and existing precedent interpreting that provision, the court reaffirmed that the scope of a property owner’s nonconforming-use rights was determined by the uses lawfully existing at the time of the adverse zoning change, rather than the time the property owner purchased the property. As such, the court of appeals erred in defining the scope of the nonconformity by the 2009 MPCA permit.

The court next reviewed AIM Development’s proposal to accept waste from a source other than the defunct paper mill. Here, it was undisputed that the only source of waste was the paper mill, which had been destroyed and would not be rebuilt. Accordingly, AIM Development desired to replace the paper mill waste with other sources of waste. AIM Development’s proposal limited the new sources of waste to generators of nonhazardous, non-toxic industrial waste— which was the same category of waste stream as its prior source, and was in the category of waste allowed by the ordinance of December 1984. Since the plain language of the statute allowed a landowner to continue a nonconforming use through replacement, the court held that AIM Development’s proposed substitution of its sources of waste satisfied the continuation requirement of the two-part test of subdivision 1e(a).

The court further noted that nonindustrial, non-toxic waste was required for the existing operation of a nonconforming waste facility. AIM Development’s proposal, with respect to the source of waste, sought to replace a depleted source with viable waste streams. Therefore, denying AIM Development’s request to replace the sources of waste would truncate the landowner’s vested right to continue to operate an industrial waste facility. Accordingly, the court held that AIM Development’s proposed substitution of its sources of waste was reasonable and necessary, and constituted a non-expansionary continuation of its nonconforming use. The decision of the court of appeals was reversed, and the case was remanded to the court of appeals.

AIM Development (USA), LLC v City of Sartell, 2020 WL 3980703 (MN 7/15/2020)

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