The text of the new law says:

“§ 1. Notwithstanding the provisions of any cash proffer requested, offered, or accepted pursuant to § 15.2-2298, 15.2-2303, or 15.2-2303.1 of the Code of Virginia for residential construction on a per-dwelling unit or per-home basis, cash payment made pursuant to such a cash proffer shall be collected or accepted by any locality only after completion of the final inspection and prior to the time of the issuance of any certificate of occupancy for the subject property.”

These bills were adopted as a priority of the Home Builders Association of Virginia as a benefit to struggling homebuilders.  They were intended to save the financing costs on money borrowed to pay the cash proffer between the date of the building permit (when these have been paid in most cases) and the date of the certificate of occupancy (when the builder can close on the home and pay off the debt). 

Good for the homebuilders.  But there are issues.

First, the law is causing some practical problems.  For example, unlike at the building permit stage, the local government does not typically collect money at the C.O. stage, so new procedures for the locality and another trip to the building official’s office by the builder may be required.  The locality obviously loses out on the use of the money during that period for purposes such as schools and road improvements. 

But the bigger issues seem to be nagging legal questions. 

For example, a cash proffer is not merely a statute that can be amended.  It is a local zoning ordinance adopted in a specific zoning case.  A proffer’s language, including the requirement (in most cases) to pay the cash proffer at the building permit stage is actually a zoning regulation, legally identical to a setback requirement or use limitation.  See Jefferson Green Unit Owners Assoc. v. Gwinn, 262 Va. 449, 458, 551 S.E.2d 339 (2001) (“proffers become part of the zoning ordinance” and are legislative enactments).

This being the case, some have asked how local governments can comply with this new law but not comply with statutory prerequisites to changing such regulations, such as notice and a public hearing.  Some have raised constitutional objections on similar grounds.  Some have asked whether this new law may disturb vested rights.  Some see proffers as more in the nature of a contract between the zoning applicant and the local government, and ask whether the law may unconstitutionally disturb these contractual relations.

With these questions and hundreds of existing proffers that specify the date of payment at the building permit stage, localities are reacting in various ways.  Some localities are applying this new law prospectively only or requiring past proffers to be amended.  Others are considering applying the proffers as submitted or accepted and waiting to see how future proffers are submitted.  Some are not amending pre-existing proffers themselves but are implementing the delay in payment by policy.

Local government attorneys and legislative liaisons raised these serious issues with the Virginia General Assembly and Governor McDonnell before HB 374 and SB 632 were adopted and before they left the Governor’s desk.  Now, they are the law. 

HB 374 and SB 632 are certainly helpful to our builders in “this economy.”  But, inarguably, this law also has serious issues that our local governments are left to address.

By letter sent June 18, the Virginia Association of Counties (VACo) and the Virginia Municipal League (VML), the bodies representing our Virginia localities at the state government level, told the Governor that ABC stores, if sold for private operation, must be subject to local land use.  And they are right.

It is generally accepted that the Commonwealth of Virginia, as sovereign, is not subject to local zoning by its political subdivisions.  The Commonwealth does enjoy its freedom from local regulation.  However, this freedom does not extend to private uses, such as privately-owned liquor stores. 

The Virginia Supreme Court has upheld local land use authority to regulate private liquor sales even when the Commonwealth has issued a state ABC license in City of Norfolk v. Tiny House, 222 Va. 414, 281 S.E.2d 836 (1981) and in County of Chesterfield v. Windy Hill, Ltd.  The Supreme Court also upheld local land use authority to regulate private uses, even on publicly-owned land, in Board of Supervisors of Fairfax County v. Washington, D.C. SMSA, L.P.

The importance of local say over the proper location of these stores, and the ability to place reasonable conditions that enable the stores — now no longer under public ownership — to fit harmoniously within the community is critical.  Local control over land use works and is essential to meet the citizens’ expectations for their communities.

VML and VACo are right.  If the Commonwealth is no longer in charge of the location of these stores, the people’s local elected bodies must be.

We’ve been busy!  (This will explain, in part, the length of time since my last post, for which I apologize.)

Planned for several months, the webinar was well-received and timely, given two major vested rights decisions by the Virginia Supreme Court in 2009, Hale v. Board of Zoning Appeals of Blacksburg, 277 Va. 250, 673 S.E.2d 170 (2009) and Board of Supervisors of Stafford County v. Crucible, 278 Va. 152, 677 S.E.2d 283 (2009), and the amendment  of the vested rights statute, Virginia Code § 15.2-2307, by the 2010 General Assembly via HB 1250.

The webinar included an overview of vested rights law that lead up to the codification of a Virginia statutory vested rights standard in 1998, the vested rights cases since codification, most notably City of Suffolk, ex rel Herbert v. Board of Zoning Appeals, 266 Va. 137, 580 S.E.2d 796 (2003), and, of course, Hale and Crucible.

The webinar also included excellent analysis by Karen Harwood, former Deputy Fairfax County Attorney and long-time legislative liaison for Fairfax County.  Karen gave her perspective as one involved in both the General Assembly process that lead to the original codification of vested rights in Virginia in 1998, and this year’s process that led to this year’s HB 1250.  Her extensive experience in both land use law and in the legislature, and her straight-forward commentary and advice made the webinar a learning experience for everyone.

Joining me on the panel from Sands Anderson were Ann Neal Cosby and Annemarie Cleary, fellow members of the Sands Anderson local government team and primary authors of the local government amicus curiae brief in the Crucible case.  Since I authored the local government amicus curiae brief in the Hale case, Sands Anderson has been very active in the advancement of vested rights law in Virginia!

There were two primary goals in offering the webinar for free to local government attorneys, zoning officials and staff: (i) to give local governments free training at a time when their budgets are stretched, and (ii) to give timely commentary and assistance to local governments trying to address HB 1250.

As discussed in an earlier post on this blog, HB 1250 added a new defined “significant affirmative governmental act” (SAGA) to the six already delineated in the statute.  Now, for the first time, a written determination by the zoning administrator can, under the right circumstances, be a SAGA.  By statute, a SAGA can potentially vest rights to a use or density despite a change in the zoning ordinance.  So the stakes can be quite high.

Here is an excerpted version of the outline on Vested Rights 2010, to give you an idea of the content of the webinar.  Local government attorneys, zoning officials and staff members are welcome to contact me for the full outline.

Thanks to the over 200 local government attorneys, zoning officials and staff who participated, and the entire team that made the webinar a success! 

We are planning another installment of the Sands Anderson Land Use Forum for Fall 2010, tentatively scheduled for November 17, 2010.  What topic would you like to see presented?

To me, this involvement is healthy. Citizen involvement is a hallmark of local government, the part that makes it LOCAL. Local folks have access to government in their county, city or town. Unlike other levels of government, they actually get notice of meetings and can easily attend a public hearing or other public meeting on matters that impact them. Local citizens can access their local officials by phone, email, or by running into them in the grocery store. To me, this is the purest form of government of the people, by the people and for the people.

And, as I stated above, there is power in the people.

More and more, groups of citizens organize to oppose development to which they are opposed. They realize they CAN have an impact on the final vote. This has been described as the “Walmart effect” after the sometimes successful grassroots campaigns to defeat local land use approvals for the big box behemouth. Here is an article by the Saint Consulting Group on this “effect” which asserts that the “public can fight city hall.”

But the developers are catching on, too. Some have adopted the methods of the NIMBY crowd to actually SUPPORT development. Here is an article from Forbes magazine (Feb. 16, 2009) on the ability of some developers to tap into the power of the people.

As local government attorneys, we often sit on are on the sidelines watching the politics unfold. I expect to see more of these types of grassroots tactics, both for and against development in the future.