McKee Family I, LLC v. City of Fitchburg
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McKee Family I, LLC (McKee) objected to the City of Fitchburg’s rezoning of two lots from a planned development district (PDD) zoning classification to a residential-medium (R-M) zoning classification. McKee sought declaratory judgment, damages, and injunctive relief on the grounds that the rezoning of the lots was unlawful. The circuit court granted summary judgment in favor of the City. Acknowledging that it did not submit an application for a building permit, McKee appealed, arguing that it had a vested right in developing land under the PDD zoning classification. The court of appeals affirmed, holding that McKee did not have a vested right in the PDD zoning classification when the City rezoned the lots. The court declined to address McKee’s constitutional taking argument, reasoning that it was an undeveloped argument. The Supreme Court affirmed, holding (1) McKee did not have a vested right in developing the property under the PDD zoning classification because it did not apply for a building permit and because a PDD zoning classification does not create contractual expectations upon which developers may rely; and (2) because McKee conditioned its takings claim on its claim for vested rights, the Court need not reach McKee’s constitutional takings claim.
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2017 WI 34 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2014AP1914 McKee Family I, LLC and JD McCormick Company, LLC, Plaintiffs-Appellants-CrossRespondents-Petitioners, v. City of Fitchburg, Defendant-Respondent-Cross-Appellant. REVIEW OF A DECISION OF THE COURT OF APPEALS Reported at: 366 Wis. 2d 329, 873 N.W.2d 99 OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: SOURCE OF APPEAL: COURT: COUNTY: JUDGE: JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: April 12, 2017 November 3, 2016 Circuit Dane John C. Albert Shirley S. Abrahamson and Rebecca Grassl Bradley, JJ. ATTORNEYS: For the plaintiff-appellant-cross-respondent-petitioners, there were briefs by Matthew Fleming and Murphy Desmond, S.C., Madison, and oral argument by Matthew J. Fleming For the defendants-respondent-cross-appellant, there was a brief by Lisa M. Lawless, Ross A. Anderson, Husch Blackwell, LLP, Milwaukee and Mark R. Sewell, Fitchburg City Attorney, and oral argument by Lisa M. Lawless An amicus curiae brief was filed by Thomas Larson, Madison for Wisconsin Realtors Association, Wisconsin Builders Association. NAIOP Wisconsin and the An amicus curiae brief was filed by Ryan J. Walsh, Chief Deputy Solicitor General with whom on the brief was Brad D. Schimel, Attorney General and Misha Tseytlin, Solicitor General for Wisconsin Attorney General and Department of Justice. An amicus curiae brief was filed by Madison for League of Wisconsin Municipalities. 2 Daniel M. Olson, 2017 WI 34 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2014AP1914 (L.C. No. 2010CV3808) STATE OF WISCONSIN : IN SUPREME COURT McKee Family I, LLC and JD McCormick Company, LLC, FILED Plaintiffs-Appellants-CrossRespondents-Petitioners, APR 12, 2017 v. Diane M. Fremgen Clerk of Supreme Court City of Fitchburg, Defendant-Respondent-Cross-Appellant. REVIEW of a decision of the Court of Appeals. ¶1 ANN WALSH BRADLEY, J. Affirmed. Petitioner, McKee Family I, LLC ("McKee") appeals an unpublished decision of the court of appeals affirming a circuit court grant of summary judgment in favor of the City of Fitchburg.1 that McKee 1 did not have a The court of appeals determined vested right under a planned McKee Family I, LLC v. City of Fitchburg, No. 2014AP1914, unpublished slip op. (Wis. Ct. App. Nov. 5, 2015) (affirming judgment and ordered entered by the circuit court for Dane County, John C. Albert, J., presiding). No. development district zoning classification and 2014AP1914 that its constitutional claim failed as a result. ¶2 that it McKee contends that the court of appeals erred and is entitled to summary judgment in its favor. Acknowledging the fact that it did not submit an application for a building permit, it nevertheless argues that it had a vested right in developing land under the zoning classification. ¶3 According developer has substantial established to made liability by McKee, vested substantial based government upon action. rights accrue expenditures reasonable It contends or when a incurred expectations that to the extent that the zoning classification is contractual in nature it also creates expectations upon which developers may rely. Contingent on its vested rights arguments, McKee further asserts that it has a claim for damages under the Takings Clause of the United States Constitution.2 ¶4 We conclude that McKee did not have a vested right in developing the property under the planned development district zoning classification because it did not apply for a building permit. Wisconsin follows the bright-line building permit rule that a property owner's rights do not vest until the developer has submitted an application for a building permit that conforms 2 The Takings Clause of the Fifth Amendment of the United States Constitution, made applicable to the states through the Fourteenth Amendment, provides that private property shall not "be taken for public use, without just compensation." U.S. Const. amend V. 2 No. 2014AP1914 to the zoning or building code requirements in effect at the time of application. Lake Bluff Hous. Partners v. City of S. Milwaukee, 197 Wis. 2d 157, 172, 540 N.W.2d 189 (1995). ¶5 Additionally, we determine that a planned development district zoning classification does not create expectations upon which developers may rely. strong presumption that legislative contractual or vested rights. contractual There is a very enactments do not create Dunn v. Milwaukee Cty., 2005 WI App 27, ¶8, 279 Wis. 2d 370, 693 N.W.2d 82 (citation omitted). Further, there must be a clear indication that a legislative body intends to bind itself contractually in order to overcome the presumption. Nat'l R.R. Passenger Corp. v. Atchinson, Topeka and Santa Fe Ry. Co., 470 U.S. 451, 465-66 (1985). McKee failed to overcome the presumption that Fitchburg did not intend to enter into a binding contract when it enacted an ordinance approving the zoning classification. ¶6 Finally, constitutional we do takings claim not need because to McKee takings claim on its claim for vested rights. no vested right classification, it in a cannot planned succeed development on its reach McKee's conditioned its Because McKee has district asserted zoning contingent takings claim. ¶7 Accordingly, we affirm the decision of the court of appeals affirming the circuit court's grant of summary judgment in favor of the City of Fitchburg. 3 No. 2014AP1914 I ¶8 This case involves a dispute about a change in the municipal zoning classification of property that McKee owns in Fitchburg. Specifically, McKee objects to Fitchburg's rezoning of two lots (53 and 54) from a planned development district ("PDD") zoning classification to a residential-medium ("R-M") zoning classification. To provide the necessary context, we begin by explaining Fitchburg's process for adopting a zoning classification. ¶9 Pursuant to Wis. Stat. § 62.23 (2013-14), municipalities may use a PDD zoning classification to establish planned mixed-use developments that have a higher density than is allowed 3 under an R-M classification.3 The R-M zoning Wis. Stat. § 62.23(7)(b) provides in relevant part: [T]he council may divide the city into districts of such number, shape, and area as may be deemed best suited to carry out the purposes of this section; and within such districts it may regulate and restrict the erection, construction, reconstruction, alteration or use of buildings, structures or land . . . The counsel may establish mixed-use districts that contain any combination of uses, such as industrial, commercial, public, or residential uses, in a compact urban form. The council may with the consent of the owners establish special districts, to be called planned development districts, with regulations in each, which . . . will over a period of time tend to promote the maximum benefit form coordinated area site planning, diversified location of structures and mixed compatible uses. . . . All subsequent references to the Wisconsin Statutes are to the 2013-14 version unless otherwise indicated. 4 No. classification allows development of only 2014AP1914 single-family or duplex structures. ¶10 under Before a property owner can develop land that is zoned the PDD classification, Fitchburg's General Ordinances require the property owner to submit a general implementation plan ("GIP") to Fitchburg's Plan Commission. Gen. Ordinances §§ 22-593, 22-594 (2015).4 Fitchburg, Wis., The Plan Commission then makes a determination and recommendation whether to advise the Fitchburg Common Council to approve the rezoning and GIP, to approve it with modifications, or to deny it. ¶11 is then ("SIP"). Id. § 22-594(b). If Fitchburg approves a general plan, a property owner required to submit Id. § 22-599. a specific implementation plan A property owner is allowed to apply for a building permit if Fitchburg approves the SIP. Id. § 22- 597. ¶12 to 1989, The relevant zoning history of this case extends back when McKee Brothers Partnership agreed to dedicate approximately 60 acres of farmland to the City of Fitchburg. This farmland, which became McKee Farms Park, was donated to fulfill Fitchburg's park land dedication requirements for a variety of McKee Brothers' projects, including the property at issue in this case. Credit for the parkland allocation was determined by a settlement agreement, which gave McKee Brothers 4 The references to the Fitchburg General Ordinances paragraph 11 are also to the 2015 version of the ordinances. 5 in No. 2014AP1914 the right to build 600 dwelling units on a variety of lands it owned. ¶13 Over the years, the property at transferred between various McKee entities. dedication, McKee Brothers transferred issue has been After the parkland the property to Development, Inc., to create the Plat of Chapel Valley.5 MAF The plat included four lots, the two undeveloped lots at issue (53 and 54), as well as two additional lots that have already been developed (10 and 11). ¶14 In conjunction with the creation of the Plat of Chapel Valley, MAF Development entered into an agreement with Fitchburg that it would make improvements in preparation for developing its land. The required improvements included: standard street improvements, installation of sidewalks, walkways and driveways, sanitary sewers, water mains laterals and easements, drainage facilities, grading and landscaping, erosion control, and electric, communications and gas facilities. ¶15 At the time the plat was created, it had an R-M zoning classification, but MAF Development applied for approval for rezoning to a PDD classification. and received When Fitchburg enacted Ordinance No. 94-O-11 rezoning Lots 10, 11, 53, and 54 from R-M to PDD zoning, it also approved MAF Development's general implementation plan for developing the property. 5 William F. McKee was the president of MAF Development. 6 No. ¶16 As development the would general provide plan "high explained, quality the proposed multi-family that is in strong demand" for "mature adults." 2014AP1914 housing Citing the "lack of housing options for mature adults in the Fitchburg area," the proposed development was intended to complement the "Independent Living" and "Elder Care" developments nearby. The GIP explained that the "formation of such a 'senior community' will serve the community by making the most efficient use of public and private services these people will require." ¶17 Lots 10 and 11, which are not at issue in this case, were developed between 1995 and 2002 under the PDD-GIP zoning plan with assisted living facilities, senior housing and senior condominiums. Lots 53 and 54 were not developed and were eventually deeded from MAF Development to McKee in 2007. ¶18 In 2008, more than a decade after Fitchburg approved the planned development district zoning and MAF Development's general implementation plan, McKee and JD McCormick Company, LLC ("McCormick"), entered purchase the purchase agreement into undeveloped was negotiations lots 53 contingent and on 54 for from McCormick McKee. McCormick's ability to The to obtain approval from Fitchburg to build 128 apartment units on the lots.6 6 McCormick was a plaintiff in this action before the circuit court granted Fitchburg's motion to dismiss McCormick from the case for lack of standing. McCormick did not appeal the order dismissing it from the case and McKee did not raise the issue on appeal. 7 No. ¶19 2014AP1914 McCormick presented a plan for a 128-unit apartment complex on Lots 53 and 54 at a Fitchburg neighborhood meeting. Fitchburg residents expressed concern about the effect of the proposed development on traffic, crime and housing values. The neighborhood's objections were set forth in a petition signed by 600 Fitchburg residents detailing concerns about the scale and density of the proposed development: If a rental development of this scale and density were built . . . it would result in significant increases in and unacceptable levels of traffic, noise, litter, vandalism, storm water run-off, and would significantly impact the quality of life and the property values of those already residing in our neighborhoods. In particular, Fitchburg residents were concerned that the proposed development did not comport with the original PDD-GIP plan to develop senior housing. ¶20 Despite these objections, McCormick prepared a PDD-SIP application for the 128-unit apartment complex on lots 53 and 54. The proposed development consisted of four three-story 32- unit apartment buildings, with a clubhouse and a pool. It hired an architect, engineer, and landscape architect, but there is no evidence in the record regarding the costs McCormick incurred. ¶21 After Fitchburg McCormick Common submitted Council the members specific submitted plan, a two rezoning application and draft ordinance to rezone lots 53 and 54 from PDD-GIP to R-M. McKee and McCormick application for PDD-SIP approval. 8 then filed a revised Following a public hearing, No. Fitchburg adopted Ordinance 2009-O-03, which 2014AP1914 rezoned the McCormick was property from PDD-GIP to R-M. ¶22 Under the R-M zoning classification, limited to developing 28 dwelling units, compared to a maximum of 132 McKee dwelling and units McCormick under the filed a PDD zoning lawsuit classification. seeking declaratory judgment, damages and injunctive relief on the grounds that the rezoning of the lots was unlawful. ¶23 The amended complaint asserted two claims. First, it alleged that Ordinance 2009-O-03 is void as a matter of law because it was adopted by Fitchburg without the consent of the owner of the property, contrary to Wis. Stat. § 62.23(7)(b). Second, it Ordinance alleged that 2009-O-03, and if Fitchburg wrongfully "wrongfully refused to adopted process and approve the PDD-SIP application," then McKee was deprived of the full economic use of the property and from earning a reasonable return on its respective investment. it was deprived of substantive McKee further alleged that and procedural due process guarantees in violation of the Fifth and Fourteenth Amendments of the United States Constitution, and Article I, Section 13 of the Wisconsin Constitution. ¶24 The parties filed cross-motions for summary judgment. At issue here is the circuit court's grant of summary judgment in favor of Fitchburg. On summary judgment, the circuit court dismissed McKee's first claim, determining that Lots 53 and 54 were rezoned in accordance with Wis. Stat. § 62.23(7)(b) and the relevant local ordinances. The circuit court did not reach 9 No. 2014AP1914 McKee's constitutional takings claim because it was conditioned on the dismissed first claim. ¶25 McKee appealed the circuit court's summary judgment order. On appeal, however, McKee did not argue that the rezoning ordinance was void under Wis. Stat. § 62.23(7)(b) for lack of consent. right in Instead, McKee asserted that it had a vested the classification PDD zoning created a classification, contract that that gives the PDD rise to expectations on which developers may rely, and that the rezoning ordinance constituted a taking under the Fifth Amendment to the United States Constitution. ¶26 have a The court of appeals determined that McKee did not vested right in the Fitchburg rezoned the lots. PDD zoning classification when McKee Family I, LLC v. City of Fitchburg, No. 2014AP1914, unpublished slip op., ¶32 (Wis. Ct. App. Nov. 5, constitutional 2015). taking undeveloped argument. It declined argument, to concluding address that it McKee's was an court of Id., ¶32 n.6. II ¶27 In this case we are asked to review the appeals decision affirming the circuit court's grant of summary judgment decision in favor granting of the summary City of Fitchburg. judgment We independently review of a the determinations rendered by the circuit court and the court of appeals. 241 Lambrecht v. Estate of Kaczmarczyk, 2001 WI 25, ¶21, Wis. 2d 804, 623 N.W.2d 751. Summary judgment is appropriate when there is no genuine issue as to any material 10 No. 2014AP1914 fact and a party is entitled to judgment as a matter of law. Id., ¶24. ¶28 zoning At issue is whether McKee has a vested right in the classification contractual and expectations whether upon the which classification McKee may creates rely. We additionally address whether a constitutional takings claim can be maintained. These issues present questions of law that this court reviews independently of the determinations rendered by the circuit court and the court of appeals. Zealy v. City of Waukesha, 201 Wis. 2d 365, 372, 548 N.W.2d 528 (1996). III ¶29 We must address first whether McKee forfeited arguments it raised for the first time on appeal. the Fitchburg contends that McKee did not appeal the claims dismissed by the circuit court on summary judgment. According to Fitchburg, McKee forfeited the arguments it now advances because they were raised for the first time on appeal. ¶30 Although the circuit court dismissed McKee's claim that Ordinance 2009-O-03 was void for lack of consent, it did not appeal that issue. Instead, on appeal McKee asserts that it has a vested right in developing lots 53 and 54 under the PDD zoning classification due to expenditures incurred based upon reasonable expectations established by government action. McKee further asserts that to the extent the zoning classification is contractual in nature, it also creates expectations upon which developers may rely. 11 No. ¶31 Contingent contends that it on has its a vested claim for rights damages 2014AP1914 arguments, under the McKee Takings Clause of the United States Constitution. ¶32 circuit Generally, court appeal. 311 will issues not not be raised considered or considered for the by first the time on State v. Holland Plastics Co., 111 Wis. 2d 497, 504, N.W.2d 320 discretion to (1983). However, "disregard it alleged is within forfeiture this or court's waiver and consider the merits of any issue because the rules of forfeiture and waiver are rules of 'administration and not of power.'" State v. Beamon, N.W.2d 681. 2013 WI 47, 347 Wis. 2d 559, 830 The arguments raised on appeal have been briefed and argued by both parties. McKee's ¶49, arguments set Accordingly, we choose to address forth above in order to clarify the important issues of law that are presented in this case. IV ¶33 had a The primary issue before this court is whether McKee vested right in the PDD zoning classification before Fitchburg rezoned the land to the R-M zoning classification. Despite the fact that it was not eligible for, and did not apply for a building permit, McKee asserts that it had a vested right in the PDD zoning classification. ¶34 McKee Wisconsin's contends bright-line that this building court permit should rule depart and from evaluate whether a developer has vested rights on a case-by-case basis. It argues that Fitchburg should not have had the discretion to change zoning regulations before a building permit was approved 12 No. because McKee had already made substantial 2014AP1914 expenditures in preparation for development under the PDD-GIP zoning. ¶35 We begin with the basic premise that municipalities have broad discretion to enact zoning ordinances and land use regulations for a variety of purposes: For the purpose of promoting health, safety, morals or the general welfare of the community, the council may regulate and restrict by ordinance . . . the height, number of stories and size of buildings and other structures, the percentage of lot that may be occupied, the size of yards, courts and other open spaces . . . the density of population, and the location and use of buildings, structures and land for trade, industry, mining, residence or other purposes if there is no discrimination against temporary structures. Wis. Stat. § 62.23(7)(am). Any ordinance adopted under this section "shall be liberally construed in favor of the city." Id. ¶36 Additionally, designation suffice applicable to give designation." the "reliance to [a on a particular landowner's] landowner a property vested right zoning does to not such Rainbow Springs Golf Co. v. Town of Mukwonago, 2005 WI App. 163, ¶12, 284 Wis. 2d 519, 702 N.W.2d 40 (citing Zealy, 201 Wis. 2d at 381). A "vested right" is a "right that so completely and definitely belongs to a person that it cannot be impaired or taken away without the person's consent." v. Milwaukee N.W.2d 102 Cty., (quoting 2014 WI Black's 130, Law 2014)). 13 ¶24, 359 Dictionary Stoker Wis. 2d 347, 857 1520 ed. (10th No. ¶37 2014AP1914 The exception to the rule that zoning does not create vested rights arises when a property owner has applied for a building permit classification. Bluff, this conforming to the original See Lake Bluff, 197 Wis. 2d at 182. court concluded that the developer zoning In Lake "obtained no vested rights, because it never submitted an application for a building permit conforming to the zoning and building requirements in effect at the time of the application." ¶38 Lake Bluff explained that "[o]ur code Id. cases have consistently held that no rights vest in such an instance" when a building permit has not been obtained. Id.; see also State ex rel. Humble Oil & Ref. Co. v. Wahner, 25 Wis. 2d 1, 13, 130 N.W.2d 304 (1964); Vil. of Hobart v. Brown Cty., 2005 WI 78, ¶28, 281 reasoned Wis. 2d 628, that the 698 N.W.2d 83. developer "did Therefore, not possess Lake the Bluff 'clear, specific legal right which is free from substantial doubt' that is required in an action for mandamus." Lake Bluff, 197 Wis. 2d at 182 (quoting Collins v. Am. Family Mut. Ins. Co., 153 Wis. 2d 477, 483, 451 N.W.2d 429 (1990)). ¶39 McKee argues first that Lake Bluff's building permit rule should be limited to the facts of that case because the developer in Lake Bluff requested relief in the form of a writ of mandamus. According to McKee, Lake Bluff declined to consider the developer's substantial expenditures in determining whether it had vested rights because a writ of mandamus requires "strict and complete compliance with all necessary applicable provisions of the relevant ordinance . . ." 14 and Id. at No. 2014AP1914 174 (quoting 4 Edward H. Ziegler, Jr., Rathkopf's The Law of Zoning and Planning, § 44.04[1], at 44-14 to 44-15 (4th ed. 1956 & Supp. 1994) (footnotes omitted)). Thus, McKee asserts that because it brought claims for declaratory judgment and damages arising from alleged constitutional violations, the permit rule should not be applied here given that the requested remedies are distinguishable from the relief requested in the writ of mandamus in Lake Bluff. ¶40 We decline McKee's invitation to limit Lake Bluff to cases in which a developer seeks relief in the form of a writ of mandamus. The Lake Bluff court did not base its decision on the developer's requested remedy. Instead, it reasoned that "[f]rom the very beginning of zoning jurisprudence in this state [] a building permit has been a central factor in determining when a builder's rights have vested." ¶41 Id. at 172. Indeed, Lake Bluff considered prior Wisconsin case law on this issue in reaching its decision and explained that "a common factor . . . was the presence or absence of a building permit." Id. at 172. As Lake Bluff explained, Building Height Cases examined three separate cases and ruled on the nature of the vested rights, if any, in each case. Id. at 171 (citing State ex rel. Klefisch v. Wisconsin Tel. Co. (Building Height Cases), 181 Wis. 519, 195 N.W. 544 (1923)). In two of the cases it examined whether there were vested rights when the developer obtained a permit. However, in the third case where there was no application for a permit, there were no vested rights. 172. 15 Id. at No. ¶42 2014AP1914 Underlying the vested rights doctrine is the theory that a developer is proceeding on the basis of a reasonable expectation. Id. at 175 (citing State ex rel. Cities Serv. Oil Co. v. Bd. of Appeals, 21 Wis. 2d 516, 528-29, 124 N.W.2d 809 (1963); 8 McQuillin Mun. Corp. § 25:157 at 701 (3d ed. 1991). As Lake Bluff explained, "[r]equiring an application for a building permit which conforms to applicable zoning or building code requirements in order to show a clear legal right also serves the goals of the vested rights doctrine." 197 Wis. 2d at 175. ¶43 Wisconsin applies the bright-line building permit rule because it creates predictability for land owners, purchasers, developers, municipalities and the courts. See, e.g., Guertin v. Harbour Assurance Co. of Bermuda, 141 Wis. 2d 622, 634-35, 415 N.W.2d 813 (1987) (explaining that bright line rules provide predictability and protect all parties). It balances a municipality's need to regulate land use with a land owner's interest in developing classification. property under an existing zoning A municipality has the flexibility to regulate land use through zoning up until the point when a developer obtains a building permit. Once a building permit has been obtained, a developer may make expenditures in reliance on a zoning classification. ¶44 In contrast, the rule proposed by McKee, which would require a case-by-case analysis of expenditures, would create uncertainty at the various stages of the development process. Nevertheless, McKee urges this 16 court to follow other No. jurisdictions, which it contends recognize 2014AP1914 expenditures made after a municipality approved the development of plats of land. See, e.g., Telimar Homes, Inc. v. Miller, 14 A.D.2d 586, 587 (1976); Milcrest Corp. v. Clackamas Cty., 650 P.2d 963, 967 (1982). According to McKee, "the concept of fair play and protection of settled expectations demands a more flexible and searching inquiry than bright-line rules such as the building permit test can provide." ¶45 For the reasons set forth above, we decline to adopt this approach. Additionally, we observe that even if this court were to determine that a rule based on substantial expenditures should apply here, McKee's claim would fail because it has not introduced evidence supporting its claims. ¶46 We previously addressed the two-fold impediments of failure to apply for a building permit along with the failure to present evidence in support of the claim. In Zealy, the court determined that the developer did not have a vested right to the former residential zoning on his land. It reasoned expenditures submitted an that in "Zealy has reliance on application for residential use of the land." not the a 201 Wis. 2d at 381-82. shown that he made any zoning, nor has he ever building Id. permit proposing a McKee's claim suffers from the same lack of evidence of expenditures made in reliance on the PDD zoning as well as the failure to submit an application for a building permit. ¶47 In sum, we decline to depart from Wisconsin's bright- line building permit rule. A property owner's rights do not 17 No. 2014AP1914 vest until the developer has submitted an application for a building permit that conforms to the zoning or building code requirements in effect at the time of application. 197 Wis. 2d at 182. It is undisputed that McKee did not apply for a building permit. that McKee did not Lake Bluff, Like the court of appeals, we conclude have a vested right in developing the property under the PDD zoning classification because it did not apply for a building permit. V ¶48 the We turn next to McKee's argument that to the extent zoning classification is contractual in nature it also creates expectations upon which developers may rely. ¶49 McKee bases this assertion on the City of Fitchburg Ordinances that set forth the procedures for the PDD zoning process that were in effect at the time the PDD-GIP was adopted. Specifically, McKee relies on language in the Ordinances that referred to a PDD zoning classification as "an agreement [that] is reached Fitchburg." between the Fitchburg, property Wis., owner Gen. and the Ordinances City § of 22.82. Additionally, McKee contends that section 22.91, which stated that "[t]he City Council shall approve a Specific Implementation Plan that is reasonably consistent with the previously approved General Implementation Plan," is an expression of intent to create expectations upon which developers are expected to rely. Fitchburg, Wis., Gen. Ordinances § 22.91. ¶50 According to McKee, we should interpret the language of the Fitchburg Ordinances as expressing an intention to create 18 No. 2014AP1914 expectations upon which developers are entitled to rely. McKee asserts that rule, because permit we should it decline contends to that a apply the planned Thus, building development district is a form of negotiated zoning that a developer may rely upon once it is adopted by Fitchburg. ¶51 McKee's presumption argument that here legislative contractual rights. contravenes enactments the strong not create do Dunn, 279 Wis. 2d 370, ¶8 (citing Morrison v. Bd. of Educ. of City of W. Allis, 237 Wis. 483, 487-88, 297 N.W. 383 (1941)). "enormously Treating legislative acts as contracts would curtail the operation of democratic government." Id., ¶9 (quoting Pittman v. Chicago Bd. of Educ., 64 F.3d 1098, 1104 (7th Cir. 1995)). ¶52 It is a well-established principle that "[o]ne legislature may not bind a future legislature's flexibility to address changing needs." Flynn v. Dep't of Admin., 216 Wis. 2d 521, 543, 576 N.W.2d 245 (1998). Accordingly, a current city government "may not enact a statute which has 'implications of control over the legislatures.'" ¶53 final deliberations or actions of future Id. The facts of this case demonstrate why a legislative body must have the flexibility to adopt and repeal legislation in response to its community's changing needs. Lots 53 and 54 were undeveloped for fifteen years after Fitchburg approved the PDD-GIP, yet McKee asserts that the current Fitchburg Common Council is contractually bound by a city ordinance adopted in 1994. 19 No. ¶54 2014AP1914 The original GIP proposed a development for "mature adults," citing the "lack of housing options for mature adults in the Fitchburg area." It was intended to compliment "Independent Living" and "Elder Care" developments nearby. the The GIP explained that the "formation of such a 'senior community' will serve the community well by making the most efficient use of public and private services these people will require." ¶55 Lots 10 and 11, which are not at issue in this case, were developed between 1995 and 2002 under the PDD zoning plan with assisted condominiums. living facilities, senior housing and senior In 2008, more than a decade after the PDD-GIP zoning was approved, McCormick presented a plan for a 128-unit apartment complex on lots 53 and 54 at a Fitchburg neighborhood meeting. The development proposed in 2008 consisted of four three-story 32-unit apartment buildings, with a clubhouse and a pool. ¶56 In a petition signed by 600 Fitchburg residents, the neighborhood detailed its concerns about the scale and density of the proposed development: If a rental development of this scale and density were built . . . it would result in significant increases in and unacceptable levels of traffic, noise, litter, vandalism, storm water run-off, and would significantly impact the quality of life and the property values of those already residing in our neighborhoods. The primary focus of concern was that the proposed development did not comport with the original PDD-GIP plan to develop senior housing. 20 No. ¶57 The concerns of Fitchburg's citizens in 2014AP1914 this case demonstrate why the legislature must have flexibility to address the changing needs of the community. 543. See Flynn, 216 Wis. 2d at Although Fitchburg adopted the PDD-GIP in 1994, it needed to be able to respond to the changing development needs of the community in 2008. ¶58 Not only was the development far different than what was originally proposed, McCormick would have been the fourth owner of the property since McKee Brothers Partnership dedicated parkland to Fitchburg in 1989. Subsequent to the parkland dedication, the property was transferred to MAF, which in 1994 applied for and classification. received approval for rezoning to a PDD Eventually, MAF deeded lots 53 and 54 to McKee, which now argues that the potential purchaser, McCormick, has the same zoning right granted to MAF in 1994 and reliance rights arising from the parkland dedication in 1989. ¶59 there As must the be United "some States clear Supreme indication Court that has the explained, legislature intends to bind itself contractually" in order to overcome the presumption that a contractual rights. 465-66 (1985). language of the law is not intended to create private Nat'l R.R. Passenger Corp., 470 U.S. at McKee points ordinances to in no evidence setting forth other the than the development process as support for its argument that PDD zoning created a contract upon which it was entitled to rely. Accordingly, McKee failed to overcome the presumption that Fitchburg did not intend 21 No. to enter into a binding contract when it 2014AP1914 enacted the 1994 Ordinance approving the PDD zoning classification. ¶60 argument Finally, we observe that we need not consider McKee's that the rezoning of Lots 53 and 54 constituted a taking. ¶61 McKee brought its takings claim as contingent on its claim for vested rights, contending it had a takings claim only if this court determined that it had a vested right in the PDD zoning classification. that it suffered a In its amended complaint, McKee alleged taking in violation of the Fifth and Fourteenth Amendments "in the event that the Court finds that the Defendant wrongfully wrongfully refused application . . ." that "[f]inding claim." to adopted process Ordinance and 2009-O-03, approve the and PDD-SIP Likewise, in its opening brief McKee argues vested rights will revive McKee's takings Finally, at oral argument, McKee reiterated "you cannot have a taking without a vested right." ¶62 As asserted, McKee's takings claim is contingent on the success of his vested rights claim. Having failed on his vested rights claim, his takings claim does not survive. VI ¶63 We conclude that McKee did not have a vested right in developing the property under the planned development district zoning classification because it did not apply for a building permit. Wisconsin follows the bright-line building permit rule that a property owner's rights do not vest until the developer has submitted an application for a building permit that conforms 22 No. 2014AP1914 to the zoning or building code requirements in effect at the time of application. Lake Bluff, 197 Wis. 2d at 182. It is undisputed that McKee did not apply for a building permit. ¶64 district Additionally, we determine that a planned development zoning classification does not create expectations upon which developers may rely. strong presumption contractual or that vested (citation omitted). legislative rights. There is a very enactments Dunn, 279 contractual do not create Wis. 2d 370, ¶8 Further, there must be a clear indication that a legislative body intends to bind itself contractually in order to overcome the presumption. 470 U.S. at 465-66. Nat'l R.R. Passenger Corp., McKee has not overcome the presumption that Fitchburg did not intend to enter into a binding contract when it enacted an ordinance approving the zoning classification. ¶65 Finally, constitutional we takings do not claim need because to McKee takings claim on its claim for vested rights. no vested right in a PDD zoning reach McKee's conditioned its Because McKee has classification, it cannot succeed on its asserted contingent takings claim. ¶66 Accordingly, we affirm the decision of the court of appeals affirming the circuit court's grant of summary judgment in favor of the City of Fitchburg. ¶67 SHIRLEY S. ABRAHAMSON and REBECCA GRASSL BRADLEY, JJ., did not participate. 23 No. 1 2014AP1914
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