In Neighbors in Support of Appropriate Land Use v. County of Tuolumne, No. F051690 (Dec. 7, 2007), a California District Court of Appeals held that a development agreement cannot be used to avoid zoning restrictions. The court framed the issue:
[C]an a county approve an application to devote a parcel of real property to a use disallowed by the applicable ordinance even though the county does not rezone the property to a district allowing the use, does not amend the text of the zoning ordinance to allow the use in the existing district, does not issue a conditional use permit consistent with the zoning ordinance, and does not grant a variance? We conclude that it cannot. Tuolumne County’s decision in this case to grant a parcel an ad hoc exception allowing a commercial use in an agricultural zoning district—an exception which was unavailable to other parcels in the same district—violated the uniformity requirement of Government Code section 65852.1 Contrary to the county’s contention, it does not help that the exception was contained in a development agreement approved pursuant to the development agreement law (§ 65864 et seq.).
Slip op. at 1-2. The discussion of development agreements starts at page 17 of the opinion. The county argued that someone seeking relief from zoning restrictions could — in addition to the usual avenues such as variances, CUP’s, rezoning, or amending the zoning ordinance — validate the proposed use by entering into a development agreement. The court rejected the county’s argument that a development agreement could do more than “freeze” existing regulations, but could be used to assure a developer that it could make a use of its property that did not conform to those existing regulations. Slip op. at 18.
The court also noted “what our holding in this case does not mean.” Slip op. at 20 (emphasis original). Development agreements can be used to tighten regulatory restrictions. Development agreements can be used for “conditional zoning.” Development agreements can go hand-in-hand with rezoning ordinances. They just can’t serve as a substitute for the required procedures to permit certain uses on property where such uses are prohibited by the zoning.
Plug: I, along with my Damon Key colleagues Greg Kugle and Ken Kupchak published an article last year in the U. Hawaii Law Review that touches on this issue from the perspective of Hawaii development agreement statute (which isn’t all that different than California’s statute).
Update: Abbott & Kinderman Land Use Law Blog has a concise summary of the facts and holding of the decision, posted here. The Real Estate and Construction Law blog posts their commentary on the decision here.