Beard v. City of Ridgeland, 245 So. 3d 380 (Miss. 2018)(en banc). In 2014 the City of Ridgeland completed a new comprehensive zoning ordinance and map. In 2015, the City adopted an amendment to the zoning ordinance that permitted a new use in the General Commercial C-2 district for a Large Master Planned Commercial Development. One aspect of the amendment was that it permitted a fuel center (aka service station) in a C-2 District. Service stations otherwise were not permitted in the C-2 District. At the time that the 2015 amendments were adopted, the Mayor and Board of Aldermen knew that Costco was interested in developing a store in a C-2 district in Mississippi, and that Costco wanted a fuel center as part of its development. Owners of residential properties near the site brought an action in the Circuit Court of Madison County alleging that the amendment constituted a de facto rezoning that required the City to prove change in the neighborhood and a public need for the rezoning; and that the amendment was intended solely to benefit the Costco development and therefore constituted illegal spot zoning. The Circuit Court affirmed the zoning amendments. On appeal, the Mississippi Supreme Court, in a unanimous en banc decision by Justice King, reversed the Circuit Court and rendered judgment for the neighbors. The Supreme Court found that the amendment of the text of the zoning ordinance constituted rezoning, and that the city failed to meet the requirement of showing clear and convincing evidence of substantial change and public need for the zoning change. The Supreme Court also found the zoning amendment was specifically intended to benefit the Costco development, and thus constituted illegal spot zoning.
Note 1: In order to appreciate this case, one must know that generally when an owner seeks to rezone property, the owner is seeking to amend the zoning map to change the zoning classification of a particular property, usually from a less intense use to a more intense use. To be entitled to have the property rezoned, the owner must prove by clear and convincing evidence that substantial change has occurred since the adoption of the zoning ordinance, and public need for the more intense use. In this case, the City of Ridgeland amended the text of the zoning ordinance itself to allow a use that would not be allowed under the existing zoning ordinance. The Supreme Court found that this amendment of the text of the zoning ordinance constituted a de facto rezoning, that the City failed to prove change or need, and thus the zoning was illegal. One difference between a rezoning of a property and a text amendment is that a rezoning requires actual notice of the proposed rezoning to owners of neighboring properties, and a text amendment does not require actual notice to anyone.
Note 2: “Spot zoning” occurs when a municipality rezones one lot to favor a particular developer. It is deemed to be arbitrary and capricious and illegal. In this case, the Supreme Court relied on emails between the city and the developer in finding that the amendments were intended to permit the Costco development with a fuel center. Of course, one does not get to the question of spot zoning until it is determined that the text amendments constituted a rezoning.
Note 3: This is not the first case in which the Mississippi Supreme Court found that an amendment to the text of the zoning ordinance constituted a de facto rezoning. In Modak-Truran v. Johnson, 18 So. 3d 106 (Miss. 2009), the City of Jackson made amendments to its zoning ordinance to permit bed and breakfast inns to serve meals to the public. The Mississippi Supreme Court held that the text amendment were intended to benefit one bed and breakfast inn, the Fairview Inn, and that the amendments effectively rezoned this property from residential to commercial property and were an attempt to “circumvent the stringent procedural requirements for rezoning.” The Court also found that the amendments constituted illegal spot zoning because the City did not dispute that the amendments only applied to the Fairview Inn. In contrast, in the Costco case, the City asserted that the amendments applied to seventeen different properties.
Note 4: It is all well and good to talk about the sanctity of comprehensive plans, whether change has occurred and need exists, and the evils of illegal spot zoning. This is the classic Euclidean zoning analysis. But in the real world, what does a municipality or county do when an extraordinary economic development opportunity arises? The United States Supreme Court, in a different context, has stated, “Promoting economic development is a traditional and long-accepted function of government.” Kelo v. City of New London, 545 U.S. 469 (2005). Every municipality in Mississippi would love to have a new Costco store within its boundaries, and would do whatever it could to make such a development happen. In this case, the Mississippi Supreme Court’s decision does not suggest that the Mayor and Board of Aldermen of Ridgeland were motivated by anything other than a desire to capture an extraordinary economic opportunity for the City.
Note 5: The development of the Costco store has continued. According to news reports, the store is expected to open in the fall of 2019. The location of the fuel center was moved across the street from the main development. Owners of nearby residential properties have challenged the new location of the fuel center, and the environmental permits granted for the development.
Originally published in the July 2019 Newsletter of the Real Property Section of The Mississippi Bar.