In the recently-decided Cherry Community Organization v. City of Charlotte, the North Carolina Court of Appeals determines that standing to bring a declaratory judgment action challenging a rezoning requires both allegations of sufficient damages as well as evidence to support those allegations. A well-pleaded complaint in a rezoning challenge, alone, does not end the standing inquiry.
The Cherry community has been described by NextCity as having been "established in 1891 as an affordable community for working-class African-Americans, a place to raise a family." Here is how the Court describes the Cherry Community Organization: "CCO is a nonprofit organization that endeavors to protect the residential character, safety, and stability of, as well as the affordable housing within, the Cherry Community ("Cherry") – a historically African American neighborhood located in the Midtown Morehead Cherry District of Charlotte."
In 2014, Midtown Area Partners II, LLC submitted an application to rezone four parcels of land in and around the Cherry Community "from general-use districts to mixed-use development districts in furtherance of plans to construct a mixed-use development, which was to contain office, retail, hotel, and residential spaces". At the center of the rezoning was a proposed 270,000 square foot building, which was initially planned to be 119 feet tall. The Cherry Community Organization filed a protest petition. Midtown Area Partners II, LLC then submitted two later applications, the Second Amended Application being the issue in this case.
A public hearing opened. After City planning staff presentation, and after orally lowering the height of the building from 119 feet to 106 feet, the motion to approve the rezoning "failed". Then, in the same meeting, Midtown Area Partners II, LLC agreed orally to bring the building's height down to a compliant 100 feet. In response, the City passed a motion to "reconsider" the Rezoning Petition as orally amended at the next scheduled meeting. At the next meeting, the City voted 10-to-1 against sending the Second Amended Application to the Zoning Committee for a recommendation, and 10-to-1 in favor of rezoning the parcels as sought. In response, the Cherry Community Organization sued the City.
The trial court granted summary judgment in the City's favor, and the Cherry Community Organization appealed.
On appeal, the Court held that (1) "the standing requirement for an action for declaratory judgment is analogous to the requirement that a party seeking review of a municipal decision by writ of certiorari suffer damages that are "distinct from the rest of the community'", (2) "[Cherry Community Organization] met the minimum pleading requirements of standing to survive a motion to dismiss in accordance with Rule 12(b)(6) of the North Carolina Rules of Civil Procedure in generally alleging special damages", BUT (3) "the evidence submitted before the Superior Court is insufficient to show that [Cherry Community Organization] has or will suffer any individual harm as a result of the rezoning". This is important. Namely, it is not enough that damages are alleged in a declaratory judgment action to show standing to challenge a rezoning; rather, standing must be proved by the evidence lest the challenger lose at summary judgment.
Judge Hunter penned a concurrence. Judge Hunter determined that the allegations, alone, met the standing requirement and that "[t]his is clearly a justiciable issue capable of resolution by our Courts". Judge Hunter instead concludes that the Cherry Community Organization lost on the merits and the trial court did not "abuse its discretion" in refusing to grant a declaratory judgment because "of [Cherry Community Organization's] failure to forecast evidence tending to show specifically how it will suffer harm by the Defendants in this case" and because the trial court concluded that the City followed all applicable laws and the outcome would not have changed by requiring the Second Amended Application, after oral amendment, run back through the Planning Staff
Zoning cases are, in many ways, fought and won early. This case is another reminder of that philosophy.
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