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Home / Courts / Local government authority – Zoning – Public school construction – Adequate public facilities fees – Development – Voluntary mitigation payments

Local government authority – Zoning – Public school construction – Adequate public facilities fees – Development – Voluntary mitigation payments

Lanvale Properties v. Cnty of Cabarrus  (Lawyers Weekly No. 12-06-0847, 68 pp.) (Barbara Jackson, J.) (Robin E. Hudson, J., dissenting) Appealed from Cabarrus County Superior County (Mark E. Klass and W. David Lee, J.) On appeal pursuant to G.S. § 7A-31) from the Court of Appeals. N.C. S. Ct.

Holding: Absent specific authority from the General Assembly, Adequate Public Facilities Ordinances (APFOs) that effectively require developers to pay a fee to obtain development approval are invalid as a matter of law.

Background and discussion: In 1998, Cabarrus County commissioners approved an APFO that allowed the county to halt development of housing projects where the developer failed to make payments or take other steps to provide adequate public facilities for the housing they provide, particularly public schools. The AFPO was amended – and voluntary mitigation payments increased – over time. Because of friction between the county and some of the municipalities in Cabarrus, the commissioners sought legislation to clarify the enforcement of the ordinance. A developer seeking to build a 54-home subdivision in the county challenged the ordinance in 2008 on statutory and constitutional grounds.  A trial court granted the developer summary judgment and denied summary judgment to the county. The Court of Appeals affirmed.

The county sought reversal for three reasons: the county was authorized to adopt the APFO under its “general zoning power,” Session Law 2004-39 authorized the county to adopt and enforce the APFO countywide, and the developer’s claims were time-barred. The court rejected all three arguments.

The APFO cannot be classified as a zoning ordinance because it does not “zone.”  The APFO does nothing to organize the County’s territorial jurisdiction into districts or zones and it does not govern specific categories of land use activities.  Rather it is a “carefully crafted revenue generation mechanism that effectively establishes a ‘pay-to-build’ system for developers.”

Between 2003 and 2008, the county increased the APFO by $8,117 —  1600 percent.  And while the county argued that the fee was “voluntary” for developers, the Court found that in truth the county’s so called voluntary mitigation payment is a mandatory school impact fee similar to the one invalidated in Durham Land owners Ass’n v. County of Durham, 177 N.C. App. 629,  630 S.E.2d 200, disc. rev. denied, 360 N.C. 532, 633 S.E.2d 678 (2006).

“We recognize the difficulty that county governments currently face as they try to meet their statutory obligation to provide adequate public school facilities, see N.C.G.S. § 115C-408(b) (2011), and we applaud the County’s commitment to securing additional funds for school construction. But we believe the General Assembly is best suited to address the complex issues involving population growth and its impact on public education throughout the State.”

The County’s argument about Session Law 2004-39 fell short, with the Court  noting that the law does not even contain the word adopt.

The court said the General Assembly has proven itself capable of being very specific in awarding authority. In 1987, it expressly authorized  Chatham and Orange counties to impose impact fees on residential developers to support the provision of public facilities, including schools.

The Court also pointed out that Union County had unsuccessfully sought legislative approval of school impact fees in 1998, 2000, and 2005, and in 2006 the Court of Appeals invalidated Durham County’s mandatory school impact fee.





(Hudson, J.) Hudson argues that Cabarrus’ entire APFO should not be struck down. Rather the voluntary mitigation payment may be severed from the ordinance, which can stand on its own.

Hudson also argues that the VMP is indeed voluntary – as developers may otherwise opt to donate land or take other steps to offset the cost of providing adequate public facilities for their developments.

Hudson urged judicial restraint.  “Whether we agree with the policy advanced or not, we should be very cautious in second-guessing, and even negating, the General Assembly’s decisions on this legislative matter.”  She also advises that a county’s powers should not be so narrowly construed. Counties are allowed, Hudson notes, to temporarily halt development altogether.

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