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Walton North Carolina, LLC v. The City of Concord

Court of Appeals of North Carolina

December 19, 2017


          Heard in the Court of Appeals 29 November 2017.

         Appeal by plaintiffs from order entered 5 May 2017 by Judge Kevin M. Bridges in Cabarrus County No. 16 CVS 284Superior Court.

          K&L Gates, LLP, by Roy H. Michaux, Jr., and Scarbrough & Scarbrough, PLLC, by James E. Scarbrough and Madeline J. Trilling, for plaintiff-appellants.

          The Brough Law Firm, PLLC, by G. Nicholas Herman, and City of Concord Attorney Valerie Kolczynski, for defendant-appellee.

          TYSON, JUDGE.

         Walton North Carolina, LLC and Walton NC Concord, LP (collectively "Walton") appeal from the trial court's order denying its motion for summary judgment and granting summary judgment in favor of The City of Concord (the "City"). We affirm.

         I. Background

         A. History of the Property

         The property at issue consists of 275.637 acres of unimproved land located on Odell School Road in Concord, North Carolina. The property was annexed into the city limits as of 30 September 2005, and was initially zoned Residential Low Density ("RL"). The RL zone allows a net density of two dwellings per acre. In 2005, Section 4.8 of the Concord Development Ordinance ("CDO") allowed for a "Cluster Development, " to permit a density of more than two dwellings per acre, subject to certain conditions and limitations.

         In 2005 and early 2006, the prior owner of the property sought to rezone the property from RL to Residential Medium Density ("RM-1" or "RM-2") to allow for the development of 684 homes on the property. The Concord Planning and Zoning Commission (the "Zoning Commission") denied this request on 21 February 2006.

         On 18 April 2006, the Zoning Commission approved the prior owner's Preliminary Plat for the development of up to 563 dwellings through the use of the CDO's cluster development provisions. The cluster development provisions were repealed from the CDO on 12 January 2006, but the prior owner had submitted its project "for review as a 'cluster' subdivision" prior to the effective date of the repeal.

         In order to pursue development under the Preliminary Plat, the developer was required to (1) submit and obtain approval for construction drawings, (2) file a final plat, and (3) obtain appropriate water and sewer infrastructure approvals prior to the stated expiration of the Preliminary Plat approval on 31 December 2013. The prior property owner entered into an agreement with the City for the construction and cost sharing of water and sewer infrastructure on 30 October 2006. In May 2007, the prior owner submitted, and the City approved, construction drawings indicating 551 dwellings, fewer than the 563 allowed under the Preliminary Plat. No final plat was ever submitted or approved.

         Because of the economic collapse of 2008 and the effects thereafter, the prior owner went bankrupt, and the property was foreclosed upon on 24 August 2011.

         B. Walton Purchases the Property

         Prior to purchasing the property, Walton had investigated the potential economic uses of the property, as detailed in a written report dated 17 February 2012. The report included a plan for developing the property by: (1) creating a new development plan, different from the previously approved Preliminary Plat; (2) seeking rezoning of the property to allow for a density of more than two dwellings per acre; and (3) entering into a "Development Agreement" with the City for an "offsite sewer extension."

         This report also expressly recognized the cluster development provisions were no longer in effect for RL zoned property, and stated "previous entitlements and approvals" had expired and "the property should be considered raw and unentitled." Walton purchased the property on 15 March 2012.

         Several months later, on 12 December 2012, the City sent Walton a letter concerning the 31 December 2013 expiration of the approved Preliminary Plat, offering to provide more information if requested. Walton never responded to the City's letter nor requested any further information regarding the approved Preliminary Plat.

         In 2013, Walton discussed rezoning options for the property with planning staff from the City. Walton had also spent over $200, 000 on various surveys, assessments, and reports to determine how many dwellings could be placed on the property under current and proposed zoning classifications. At no point in 2013 did Walton discuss pursuing development of the property under the prior approved Preliminary Plat with the City. The Preliminary Plat expired according to the terms of the City's approval on 31 December 2013.

         In 2014, Walton and the City worked upon a co-operative development agreement for the off-site sewer extensions to the property. From a meeting between Walton and the City concerning the development agreement on 22 September 2014, Walton's notes indicate its awareness of the expiration of the prior approved Preliminary Plat and the prior repeal of the cluster provisions from the CDO. The City approved its development agreement with Walton on 9 October 2014, after the required public notice and hearing.

         On 21 November 2014, Walton submitted a preliminary site plan to develop 551 dwellings on the property, pursuant to the Preliminary Plat approval granted to the prior owner. This plan more than doubled the number of dwellings allowed in the RL zone, proposing a net density of 4.5 dwellings per acre instead of the allowed two dwellings. In this submission, Walton stated it believed the property ...

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