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Bar News - August 11, 2006


Real Estate Law: A New Era of Zoning Protection in New Hampshire

By:

The formerly complex and sometimes contentious process of site plan acceptance in New Hampshire has just been simplified.

 

Prior to a recent amendment of the relevant statute, RSA 676:12(VI), the development shown on a site plan was exempt from proposed zoning amendments only after a planning board voted to accept a site plan application as “complete.” This framework sometimes created considerable tension between the developer and the municipality, even before the parties rolled up their sleeves to address the substance of the application.

 

For example, to be protected against retaliatory zoning amendments that might be proposed by concerned residents, the developer of a controversial project would have wanted the planning board to accept the site plan application as soon as possible. On the flip side, municipalities would zealously enforce strict compliance with all site plan submittal requirements before voting to accept an application as complete.

 

The previous statutory framework raised questions about whether the municipality held too much leverage. When dealing with a controversial project, what prevented an overzealous planning board or planning staff from repeatedly finding an application incomplete based on trivial defects, resulting in delays and a potential loss of grandfathering protection under RSA 676:12(VI)?

 

That dynamic has now changed. On June 15, 2006, the legislature passed HB 1508, and the bill was subsequently signed into law by Governor John Lynch. The bill amended RSA 676:12(VI) so that zoning protection would no longer run from the date of acceptance of the site plan application, but from the date of notice for the application. The change takes effect on August 14, 2006.

 

Before we examine the practical impact of this new legislation, it is worthwhile to briefly consider the process by which it was approved. Given the significant changes presented by HB 1508, one would have expected a contentious and difficult approval process. By all indications, that was not the case; HB 1508 passed with few revisions and relatively little fanfare. While some may argue that this was solely the result of political pressure applied by the bill’s proponents, another theory is that the bill passed because parties on both sides recognized that change was necessary—a position bolstered by the support that HB 1508 received from a number of municipal planners.

 

The revisions to RSA 676:12(VI) are fairly straightforward. Under the new law, zoning changes do not apply to any site plan (or subdivision) application “which has been the subject of notice by the planning board.” Therefore, once notice has been published for a development project, that project is immune from future changes in the zoning regulations.

 

The grandfathering protection afforded by the statute also has been expanded to include projects that are engaged in preliminary design review. Under the new law, even if a formal site plan or subdivision application has not been submitted, a project may still be entitled to zoning protection if a “formal application” (for site plan or subdivision review) is filed “within 12 months of the end of the design review process.” Although this creates some ambiguity as to exactly when the design review process has “ended” for the purposes of calculating the 12-month period, it further signals the legislature’s intent to protect projects from zoning changes once the review process has begun.

 

What are the overall impacts of the new legislation? Attorney Ari Pollack of the Concord law firm of Gallagher, Callahan & Gartrell, who was one of the primary drafters of HB 1508, believes that the new legislation simply levels the playing field and removes unnecessary tension between the developer and municipality. According to Pollack, “House Bill 1508 doesn’t create an unfair advantage for contractors and developers. Instead, it replaces a subjective standard with an objective one, and makes the rules more predictable for everyone.”

 

Attorney Jed Callen of Baldwin, Callen & Ransom, who frequently represents neighbors and abutters in opposing developments, disagrees. While Callen admits that the amendment will have the benefit of allowing a planning board to focus on the technical aspects of accepting an application without other pressures, he is concerned about expanding zoning protection to projects that are engaged in preliminary design review. “Preliminary design review is too early for a project to be exempt from zoning changes,” Callen says. “My fear is that developers will throw together a hastily prepared development proposal simply to lock in the existing regulatory scheme,” he explains. “Also, the statute does not address how similar the formal application that is eventually submitted must be to the plan as presented during preliminary review in order to be exempted from subsequent zoning amendments. And, early submittals to acquire immunity from zoning changes will waste planning board, staff, and abutters’ valuable time.”

 

We understand Callen’s concern about the potential for abuse. Under the new law, some developers may use the preliminary design review process solely as a means of securing zoning protection, and we suspect that future disputes under the statute will focus on that issue. Despite the inevitability of these disputes, however, we believe that this amendment will have a net positive effect overall. It creates certainty for developers, and allows planning staff to consider an application free from the pressures created by possible zoning changes. In this context, the enactment of House Bill 1508 is a positive step forward in the often uncertain world of real estate development.

 

 

To contact Philip Hastings or Carmine Tomas, both of Cleveland, Waters, and Bass, based in Concord, call 800-370-7761 or e-mail hastingsp@cwbpa.com or tomasc@cwbpa.com. Hastings is a shareholder and director and practices in the area of real estate, commercial transactions, and land use and zoning. Tomas is an associate and practices in the area of real estate, commercial transactions, and land use and zoning.

 

 

 

 

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