The owners of the Hollymead Town Center (Route 29, LLC) located, perhaps not surprisingly along U.S. Route 29 in Albemarle County outside of Charlottesville, needed the County to rezone a portion of the property.
Part of the rezone was something called a "conditional proffer" that required a cash donation of $50,000 "[w]ithin thirty days after demand by the County after public transportation service is provided to the Project," and then additional donations of fifth large each year for 9 years for a total of a half-million.
There was some discussion among the public and County officials about whether this condition would ever be actually realized because public transportation service might not be provided in the future, but in the end the County approved the "Commuter Route" that is projected to run "from northern Albemarle County to downtown Charlottesville." But the owner objected to the cash payment, throwing up the Nollan/Dolan/Koontz batsignal: where's that essential nexus and rough proportionality? The Commuter Route is to bring people to and from the more rural parts of the County to downtown, and even though there is a stop at Hollymead, the route isn't "related to the services provided by the Project." The owner claimed the stop at its property was a "pretext," and that the bus line didn't operate during any hours that would service the site.
Nonetheless, the County went forward and opened the Commuter Route. Which, in its mind, triggered the owner's obligation to pony up that first $50k payment under the conditional proffer. The owner didn't pay, and after repeated requests were ignored (by then the amount allegedly owed was $150k) the County sent a NOV of zoning violation.
Next step: the County's zoning administrative appeal process. Owner raised again the lack of essential nexus and proportionality. "The County unanimously voted to deny the Owner's appeal."
Next stop, a Virginia trial court and the County's demurrer. The court overruled the demurrer and conducted a bench trial, after which it ruled for the owner, concluding "all of the notes and information that I have from minutes and otherwise suggest that all of the discussion is talking about moving not folks to and from the [Project], but to and from a certain area adjacent ... down to Charlottesville and Albemarle." The County appealed to the Virginia Supreme Court.
In Board of Supervisors of Albemarle Cty. v. Route 29, LLC, No. 201523 (June 2, 2022), the court rejected the County's two main arguments.
First, the court noted that "[i]n the land-use context, the unconstitutional conditions doctrine prevents a municipality from conditioning the grant of a land-use permit on the applicant’s surrender of their right to just compensation for property expropriated for public use." Slip op. at 10. This applies to land exactions and cash exactions. "In other words, while a state, under its police power, may regulate land use to further legitimate state interests, it may not use this power as a cudgel to coerce concessions from a land-use applicant who seeks to repurpose her property." Id.
The County argued that all that may be true, but here the owner voluntarily accepted the conditional proffer, so you know, none of that Nollan/Dolan/Koontz stuff applies (an argument that is often made where an owner accepts then objects -- rather than rejects and sues -- exaction demands). No, the court concluded, the owner sought the rezoning, agreed to the condition "for the purpose of receiving a land-use permit, which required the amendment of a zoning ordinance." Slip op. at 14. And that means "the unconstitutional conditions doctrine entitles the Owner to ignore or enjoin enforcement of the condition without losing the grant." Id.
Next, the court rejected the County's argument that the trigger to the conditional proffer was the County providing "public transportation," and the bus line is, you know, public transportation (a fact the owner stipped to in the trial court). The County argued that the owner's evidence showing a lack of nexus and proportionality should not have been considered. Nope:
- Government's burden. Slip op. at 15 ("The burden rests on the municipality to justify the enforcement of a conditional proffer in the face of an unconstitutional conditions challenge.").
- The owner introduced evidence that the Commuter Route "actually brings additional vehicular traffic to the Project site." Id. Oof.
- The route "does not run during the times at which traffic to the Project is greatest, and the County meeting minutes entered into evidence show little-to-no discussion concerning the identification or mitigation of traffic impacts resulting from the Project." Id.
- "One County board member described the Transit Proffer as “an asset” that they should not let go to waste, while others openly stated that ridership on the Commuter Route would increase as the population grows in commuter communities in northern Albemarle." Id.
- "The Owner’s traffic impact expert also testified that the effect of the Commuter Route on overall traffic would be negligible. In response, the County offered no evidence and relied on its argument that voluntary conditional proffers are binding even if they lack an essential nexus to the impacts of development." Slip op. at 15-16.
Taking all of that into consideration, the Supreme Court concluded the evidence was admissible:
As explained above, in order to be constitutional and enforceable, conditional proffers must bear an essential nexus and be roughly proportional to the impacts associated with the new development. The nexus requirement demands a relationship between the conditional proffer and the impacts of the development. We also explained that “rough proportionality,” while not requiring a mathematical formula to determine the degree of congruence, requires an “individual determination” by the municipality that the conditional proffer targets and addresses specific impacts of the proposed development. The evidence presented at trial, including the stipulations, and exhibits, is sufficient to support the circuit court’s conclusion that the County failed to meet its burden to prove that the Transit Proffer bears a nexus to, and is roughly proportional to, the impacts of the Project. Therefore, the circuit court did not err in denying the County’s motion to strike the evidence.None of this is to say that the Transit Proffer is void on its face. The Owner acknowledges, and we agree, that a different public transportation service may trigger Transit Proffer payments that are enforceable at law. However, the Commuter Route, as it is presently designed, does not. See Nollan, 483 U.S. at 842.
Slip op. at 16.
Verdict affirmed.
Board of Supervisors of Albemarle Cty. v. Route 29, LLC, No. 201523 (Va. June 2, 2022)
