Property rights advocates scored a significant win with the December 2013 Minnesota Supreme Court reversal in White v. City of Elk River.  The White decision centers on whether Wapiti Park is legally able to continue operating its campground, which it first opened in 1973, despite evolving land use regulations governing the campground.  While the Minnesota Court of Appeals held that Wapiti Park’s failure to abide by the terms of its Conditional Use Permit (“CUP”) entitled the City of Elk River (the “City”) to revoke its CUP, the Minnesota Supreme Court reversed, holding that once nonconforming use rights are conferred, they cannot be revoked due to noncompliance with a CUP.

Evolving Land Use Regulations

When Wapiti Park first began operations in 1973, no zoning ordinances regulated the use of its land.  By 1980, the City had enacted a zoning ordinance that made the campground a non-permitted use, but allowed it to continue as a legal, nonconforming use.  Three years later, the City amended the zoning ordinance to make the campground a conditional use.  Wapiti Park applied for and was granted a CUP in 1984, which was conditioned upon several requirements, including that permanent residents at the campground were not permitted.

In 1999, Wapiti Park’s sole building was completely destroyed by a fire.  The City required Wapiti Park to obtain an interim-use permit to rebuild the building, which it approved for a period of ten years.  Matters came to a head when Wapiti Park attempted to renew its interim-use permit in 2010.  The City agreed to renew the permit, but again imposed numerous conditions, including that the original 1984 CUP conditions be met.  The City’s later inspection revealed that Wapiti Park appeared to be in violation of the prohibition on permanent residents, and the City accordingly attempted to revoke the CUP.

The district court held that the City erroneously revoked the CUP and that Wapiti Park should not have been required to obtain an interim-use permit to rebuild its building.  The Court of Appeals reversed, holding that because Wapiti Park had violated the terms of its CUP, it was no longer a lawful, nonconforming use and had therefore lost the rights associated with that designation.  The Supreme Court reversed, holding that unless a landowner has knowingly waived its nonconforming use rights, CUP restrictions cannot operate to limit nonconforming use rights.

The Supreme Court’s Reasoning

The heart of the Supreme Court’s decision was the effect Wapiti Park’s application for and receipt of the CUP had on its nonconforming use status.  While the City argued that the campground ceased to be a nonconforming use once Wapiti Park obtained the CUP, the Supreme Court held that this could only result if Wapiti Park waived its rights as a nonconforming use.  Applying the traditional law of waiver, the Supreme Court held that because Wapiti Park did not intentionally relinquish a known right when it applied for and received the CUP, it did not waive its nonconforming use rights.

As outlined by the Supreme Court, a municipality retains five methods of furthering the public interest in ending nonconforming uses.  Pursuant to Minnesota Statutes, it may exercise its eminent domain powers, Minnesota Statutes § 465.01; eliminate the use by operation of law if the use has been discontinued for more than one year or has been destroyed by fire or other peril “to the extent of greater than 50 percent of its estimated market value, Minnesota Statutes § 462.357, subd. 1e(a); or have the use adjudged a nuisance, Minnesota Statutes § 6432.357, subd. 1d. In addition, the municipality and landowner may mutually agree to terminate the use via a written agreement.  Because the City acted outside the scope of these five permissible ways to terminate a nonconforming use, its revocation of the CUP was ineffective to terminate Wapiti Park’s nonconforming use rights.

However, in a slight twist, the Supreme Court held that the City was entitled to attach conditions to the interim use permit.  While the existing destruction-by-fire statute cited above would have allowed Wapiti Park to rebuild its destroyed building without a permit (the parties stipulated that the building was less than 50 percent of the value of the entire campground), that law was not in effect at the time of the fire and interim-use permit.  Instead, the governing law was a City ordinance that measured the destruction due to fire against the value of the building (as opposed to entire nonconforming use).  Thus, under its ordinance, the City was entitled to require Wapiti Park to obtain the interim-use permit, along with the 2010 renewal, and to attach conditions to that permit.

The Practical Impact of White

While White certainly cuts off an important tool municipalities have used to control nonconforming uses, municipalities may be able to find workarounds to this limitations.  In addition to the five lawful methods of terminating nonconforming uses discussed above, the Supreme Court noted, perhaps as a signal to municipalities, that this decision does not impede a municipalities ability to “impose upon nonconformities reasonable regulations . . . to protect the public health, welfare, or safety” under Minnesota Statutes § 462.357, subd. 1e(b).  In other words, while CUP conditions may no longer be a valid means of control, more general regulations will likely be able to achieve the same result.  Thus, before landowners with nonconforming use rights disregard CUP conditions they previously believed were binding, they should consider the practical impact such disregard might have in the face of municipalities’ other powers.