Posted by: Patricia Salkin | February 13, 2021

MI Appeals Court Concluded Interim Zoning Ordinance is Valid and Not Subject to Referendum, and Dismissed Lawsuit by Solar Developer

This post was authored by Olena Botshteyn, Esq.

An interim zoning ordinance put in place by the Township of Benton blocked the construction of a large-scale solar array, proposed by the Sandstone Creek Solar, LLC (“Sandstone”).

In 2016, Sandstone, a solar development company, decided to implement its plan to construct a solar facility in the Township of Benton (“the Town”), located in Eaton County (“the County”), Michigan. With this purpose, Sandstone started acquiring property interests in 850 acres of land in the Town. One of the landowners, Walters, joined Sandstone as a plaintiff in this case. At the time, land use and zoning in the town was regulated by the County Land Development Code, since the Town did not have a zoning ordinance in place. The County commenced the process of amending the Code to facilitate the anticipated construction of large-scale solar and added a chapter, which permitted solar systems in limited agricultural (LA) districts, by conditional use permit. The Town opposed the construction of the facility on agricultural land, and, specifically, prime farmland, which is considered to be highly productive. In response to the County’s amendments, the Town decided to enact its own zoning ordinance, permitting solar systems only in light industrial zones.

In October 2019, Sandstone submitted its application for a permit to the County. In November 2019, the Town adopted its interim zoning ordinance as a temporary measure, and directed its planning commission to prepare a final and permanent zoning ordinance. In addition, it imposed a moratorium on new permits for one year or before the new zoning ordinance is in place. Following these events, in December 2019, Walters submitted notice of intent to file a referendum petition, challenging the interim zoning ordinance. Simultaneously, Sandstone filed a complaint with the trial court, which further concluded that the Town implemented its interim zoning ordinance in consistence with Michigan Zoning Enabling Act (“MZEA”) and that such ordinance cannot be subject to referendum until a permanent zoning ordinance is implemented.

On appeal, the court concluded that the trial court did not err by determining that Benton Township’s interim zoning ordinance is not subject to a petition for referendum under the MZEA, stating that MZEA contains specific procedures for the enactment of interim and permanent zoning ordinances. The court went on to explain that the legislative purpose of interim ordinance is “[t]o protect the public health, safety, and general welfare … during the period required for the preparation and enactment of an initial zoning ordinance,” and for this purpose interim ordinances are allowed to take immediate effect. Such purpose would not be fulfilled if interim ordinances could be automatically suspended upon the filing of a referendum petition. Under the act, there is no hearing requirement for an interim zoning ordinance, and, according to the court, nothing else in the text of MZEA suggests that an interim zoning ordinance is subject to referendum.

The court further concluded that the trial court did not abuse its discretion in denying plaintiffs’ request for injunctive relief. In response to plaintiffs’ argument that interim zoning ordinance shall be rendered invalid due to the failure to follow the procedural requirements for its adoption, the court found that some actions by the township were not mandatory due to the permissive language of the act. Another argument concerned failure of the township to enact a new ordinance that would authorize the existing at the time planning commission to perform its duties. However, the court concluded that since the act provides no penalty or remedy if such action is not taken, the failure to adopt a new ordinance shall not render the planning commission a nullity. Finally, the court confirmed that the trial court did not abuse its discretion by finding that plaintiffs failed to demonstrate that they would suffer irreparable harm if an injunction was not issued. Sandstone acquired the property rights, knowing that the county zoning ordinance did not provide for solar energy systems, and the interim ordinance enacted by the township did not deprive Sandstone of its property interests that existed at that time.

With regard to the dismissal of the complaint, the court ruled that the trial court erred in dismissing Count II, seeking declaratory judgment of an improperly imposed moratorium, and Count III of plaintiffs’ complaint, stating that the interim zoning ordinance imposed exclusionary zoning, without notice and hearing, since neither party specifically addressed the merits of those Counts. The court therefore reversed the trial court’s dismissal of Counts II and III and remanded to the trial court for further proceedings.

Sandstone Creek Solar, LLC and Gary Walters v. Township of Benton, 2021 WL 400585(MI App. 2/4/2021)

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