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Rhode Island Lawyers Weekly: Coventry’s Impact Fees Upheld

But town can’t require new approval process for project’s final phase

 

By Tom Egan

January 15, 2015

 

A Superior Court judge has ruled that the town of Coventry could impose impact fees on the fourth phase of a “Planned Unit Development” approved by the town in 1976.

The plaintiff, which acquired the land in 2005, argued that it had the same vested right to construct the fourth phase — a multi-family apartment complex designated “Woodland III” — as the original owner had to develop the first three phases.

Judge Brian P. Stern agreed.


“[T]his Court finds that Woodland III is vested with the same rights as the first three Phases of the project, and therefore, does not need to seek additional municipal review before receiving a building permit, so long as the intended development conforms to the approved PUD,” Stern wrote.

 

But the judge went on to reject the plaintiff’s argument that Coventry could not assess impact fees associated with the development of Woodland III.

 

“Although the final site plan was approved before the Impact Fee Ordinance, a building permit has not been issued; therefore, application of this Ordinance does not constitute retroactive application,” Stern stated.

 

The 30-page decision is Evergreen Estates Managing Corporation v. Town of Coventry, et al.,Lawyers Weekly No. 61-002-15. The full text of the ruling can be found by clicking here.

 

Providence attorneys Michael A. Kelly and Joelle C. Rocha represented the plaintiff. Opposing them were Nicholas Gorham of North Scituate and Michael A. DeSisto of Providence.

 

Multiple phases

 

Mapleroot Development Corp. purchased 89 acres of land and sought approval from Coventry’s Town Council to rezone the property as a PUD.

 

The construction at Woodland Manor was to occur in separate phases. Phase I consisted of an apartment complex; Phase II included a housing facility for the elderly; Phase III encompassed the building of a nursing home; and the final phase, IV, comprised of a multi-family apartment complex.

 

In 1974, Mapleroot received a letter from the Rhode Island Department of Environmental Management, which stated that construction on the master tract would not be in violation of the Fresh Water Wetlands Act, so long as the construction did not fall below a certain contour.

 

On Aug. 10, 1976, Coventry’s Town Council approved Mapleroot’s final site plan for Woodland Manor and the rezoning of the master tract as a PUD district.

 

After the first three phases were approved and constructed during the early 1980s, Mapleroot submitted its final site plan for Phase IV to the DEM.

 

However, the DEM found Phase IV was a significant alteration of the wetlands and refused to approve the site plan. In 1992, Mapleroot conveyed Woodland III to the entity Woodland Associates.

 

The General Assembly in 2000 enacted the Rhode Island Development Impact Fee Act, giving municipalities the authority to establish impact fees, designed to raise additional funds for public facilities serving the new municipal growth and development and to make those benefitting from the expansion pay a fair share of the cost for new or upgraded facilities.

 

In 2002, Coventry enacted an ordinance entitled “Fair Share Development Fees,” authorizing the assessment and collection of impact fees on new residential development.

 

On March 1, 2005, all the partners of Woodland Associates transferred their partnership interests to plaintiff Evergreen Estates Managing Corp.

 

The plaintiff’s complaint sought a declaratory judgment that Woodland III — Phase IV — is vested with the same rights as the other phases of the PUD and does not require further municipal board approval to construct Woodland III in accordance with the approved PUD.

 

In Count II, the plaintiff sought a declaratory judgment that Coventry is prevented from assessing impact fees associated with the development of Woodland III.

 

Vested rights

 

The town contended that the doctrine of laches should be applied to bar the plaintiff’s lawsuit.

 

“In this case, the Defendant argues laches is appropriate due to the fact that for more than thirty years, the Plaintiff and its predecessors have not yet come forward to assert their rights to develop Woodland III,” Stern noted.

 

“What is unreasonable in this case is the fact that Coventry failed to include in the PUD Ordinance a limitation on the time within which final site plan approval would last, in the event that no further action was taken on the approved plan,” he added. “Claims that the Defendant will be prejudiced if the project is allowed to go forward — in accordance with the approval granted in 1976 — without additional evidence demonstrating how Coventry’s public facilities will be overburdened makes the defense of laches inappropriate in this case.”

 

The plaintiff contended that the fact that a building permit for Woodland III was never sought for more than 30 years was irrelevant, since Coventry’s 1976 PUD ordinance did not contain an expiration date for an approved plan nor did it contain a provision for when construction had to commence.

 

“It would be inequitable to require the Plaintiff to now seek approval again for Phase IV only because Coventry’s Zoning Ordinance was amended after final approval was given to the entire project,” the judge stated.

 

Stern also pointed out that nowhere in the regulations and ordinances in place in 1976 was there a time limitation when construction had to begin after final site approval.

 

“Furthermore, there is no condition stating that a party has to restart the application process if there is a period of inaction following final site plan approval,” he said. “Therefore, without such restrictions in place, a mere delay in moving forward with Phase IV of the approved PUD does not force the Plaintiff to start the approval process over in order to complete Woodland Manor.”

 

Impact fees

 

The plaintiff argued that applying an impact fee — in an amount close to $1 million — to a development approved 24 years before Coventry’s Impact Fee Ordinance would constitute retroactive application of the Impact Fee Act.

 

Further, the plaintiff argued that since Woodland III is vested to the regulations and ordinances in place in 1976, the year Woodland Manor was approved, Coventry could not assess such fees on Phase IV because there existed no authority for its assessment at the time the PUD was approved.

 

“[S]ince Phase IV has not been issued a building permit, this Court finds that impact fees can be assessed at the time Plaintiff applies for a permit,” Stern said.

 

He went on to say that although impact fees were not enacted at the time final approval was granted, “such fees can still be assessed in the future without disturbing a parties’ vested rights.”

 

Stern noted than an individual or entity cannot avoid impact fees solely by relying on vested rights.

 

“There cannot be a justifiable assumption that impact fees will not be imposed at some point in time, even if final approval has been granted,” he said.

 

The assessment of impact fees “simply does not disturb the Plaintiff’s right to construct Phase IV as originally planned,” the judge concluded.

 

CASE: Evergreen Estates Managing Corporation v. Town of Coventry, et al., Lawyers Weekly No. 61-002-15

COURT: Superior Court

ISSUE: Could the town of Coventry, under the authority of a 2002 ordinance, impose impact fees on a project approved by the town in 1976?

DECISION: Yes