Saturday, December 13, 2008, 3:27 PM

Supreme Court Embraces Broad Standing Rule For Zoning Cases

Yesterday in Mangum v. Raleigh Bd. of Adjustment the NC Supreme Court held, contrary to the Court of Appeals, that property owners in close proximity to a proposed business had standing to challenge a special use permit. The crux of the issue was this: in order to have standing to challenge a zoning decision, do adjacent or nearby property owners have to establish that approval of a permit would diminish their property values; or can they rely on other, more generalized concerns and secondary effects such as increased traffic, parking, and safety concerns? The majority, in an opinion written by Justice Brady, held that adjacent or nearby property owners can have standing without establishing a diminution in property values. Justice Timmons-Goodson dissented.

This case arose in 2005 when a business applied for a special use permit for an adult establishment (a topless club) in Raleigh. It would be located on a small, dead-end street in an industrial zoning district with a heavy equipment rental company, a commercial steel company, etc. The Raleigh Board of Adjustment held a hearing on whether to grant a special use permit. A group of adjacent and nearby property owners (Petitioners), including the owner of the Angus Barn restaurant, testified at the hearing against a permit.

The Board approved the permit. Petitioners appealed, and the superior court reversed the Board's decision. The Court of Appeals (COA) reversed, however, holding that Petitioners lacked standing to challenge the Board's permit approval. The Supreme Court granted discretionary review and reversed.

The majority concluded that Petitioners had established standing based on their testimony that the proposed adult establishment would increase traffic, create overflow parking problems, present stormwater runoff problems, pose safety issues, and have other "secondary effects" on their nearby properties and businesses (littering, noise, vandalism). The majority held that these were special damages to Petitioners above and beyond harm to the community as a whole.

In dissent, Justice Timmons-Goodson accused the majority of "misappl[ying]" and "disregard[ing]" longstanding precedent "in favor of the less consistent rule of some other jurisdictions." She said the majority "failed to cite any [N.C.] cases which hold that allegations regarding increased traffic, increased water runoff, parking, and safety concerns alone are sufficient to establish special damages for standing." She argued that N.C. had always had a "stringent" standing rule rejecting standing for adjacent or nearby property owners unless they can establish (as special damages) that the zoning approval will reduce their property values. In this case, Petitioners didn't allege they would suffer reduced property values, and the trial court didn't find that they would. Thus, Justice Timmons-Goodson would find, as the COA did below, that Petitioners lacked standing.

Now this case will go back to the COA to determine whether the trial court erred in reversing the Board's decision approving the special use permit. By the time the COA resolves the case, nearly four years will have passed since the permit application.

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