A local zoning attorney this past week admonished a city council not to revert the zoning classification on his client owner’s parcel, since that would be tantamount to “down-zoning” the property, diminishing the value of that asset, and triggering the tenets of Proposition 207, Arizona’s regulatory takings measure. (This has been since its passage codified in A.R.S. §12-1134.) My reaction is this: What’s the real story, here?
A well drafted city or county zoning ordinance should contain a section explaining the intent and form of conditional zoning provisions. If the text contains an automatic “repealer” clause, which provides that the zoning reverts back to the original zoning if the conditions are not met within a set time limit, the specific time limit should be included. When this form is to be used, it’s advisable for notice to be given and a public hearing conducted on the scheduled repeal, to avoid a possible challenge on procedural due process grounds. If the text’s substance is that the zoning becomes effective only upon specific conditions being met within a prescribed time limit, then the time limit should be specified in the ordinance, and definite standards for compliance should be provided. All of this makes good land planning sense.

But once that policy is articulated and the reversion process is properly implemented, well, where’s the owner’s gripe? If a project that has been rezoned languishes without serious progress, and if the applicant for the original zoning was made aware of the stipulation governing a limited opportunity to accomplish the development, how do we empathize with the objection to repealing the conditional grant? To elaborate, what’s the more consequential public policy? Is it to recognize that repealing the zoning granted will potentially harm the marketability (or financial yield upon sale) of the parcel in question? Or, is it to acknowledge that over time, the surrounding neighborhood or other geographic context can transition, and that this change might render the adopted conditional zone incompatible with what’s going on around the parcel? Is it not the case that some applications for zoning changes are compelling only when the development accomplishes some specific, beneficial purpose in the near term?

Granted, if only a single parcel in a jurisdiction is designated for repeal of its conditional zoning, substantive due process may be implicated, unless it is demonstrable that the specific parcel was rezoned in a difficult decision that featured several competing considerations. But if a zoning authority consistently enforces the “rule of reversion,” then blustering by the owner is overboard. What’s wrong with losing your zoning when you were told, and you acknowledged, the ‘use it or lost it’ stipulation in the zoning ordinance that the council or commission voted to approve? (And, by the way, why isn’t a proper reversion clause in a zoning ordinance consistent with A.R.S. §12-1134(B)(6)?)

When the owner is truly ready to develop, assuming the neighborhood has not evolved in a different direction, the owner won’t have any difficulty obtaining his parcel’s “reinstatement” of the needed zoning district. Conversely, if the neighborhood no longer is the same “place” it was before the reversion, then why would anyone – parcel owner included – want to have the entitlement to develop out of synch with the surrounding uses?

-MNW