Durand v. IDC Bellingham, LLC
440 Mass. 45 (2003)
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Rule of Law:
A voluntary offer of public benefits by a developer, not directly tied to mitigating project impacts, does not by itself invalidate an otherwise lawful legislative zoning enactment. The proper focus of judicial review is whether the zoning act violates state law, is arbitrary and unreasonable, or is substantially unrelated to the public welfare, not the motives of the legislative body.
Facts:
- In 1993, the town of Bellingham established a task force to find ways to increase its property tax base, which recommended rezoning a parcel of land (the locus) for industrial use.
- In May 1995, a proposal to rezone the locus for industrial use at a town meeting failed to achieve the required two-thirds majority.
- In 1997, IDC Bellingham, LLC (IDC), which owned a power plant in the town, discussed with town officials the possibility of rezoning the locus to build a second plant.
- During these discussions, IDC learned the town had an $8 million shortfall for a new high school.
- Subsequently, IDC's president publicly announced that IDC would make an $8 million gift to the town if the rezoning was approved, and if IDC decided to build the plant, obtained financing, and operated it successfully for one year.
- On May 28, 1997, at an open town meeting, IDC reiterated its $8 million offer before the vote on the zoning article.
- The zoning article to rezone the locus for industrial use passed by more than the required two-thirds vote.
Procedural Posture:
- Eight landowners (plaintiffs) located near the locus filed suit in the Land Court against IDC, the town, and others.
- The plaintiffs' amended complaint sought a declaratory judgment that the rezoning was void as illegal 'contract' or 'spot' zoning.
- In the Land Court, the plaintiffs conceded that the action did not constitute illegal spot zoning.
- The defendants moved for summary judgment on the remaining claims.
- The Land Court judge denied the defendants' motion and, on his own motion, granted summary judgment to the plaintiffs, finding the rezoning vote was invalid because it was based on an 'extraneous consideration' (the $8 million offer).
- The defendants appealed to the state's highest court, the Supreme Judicial Court, which transferred the case on its own motion.
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Issue:
Does a developer's voluntary offer of a substantial monetary payment to a municipality, contingent on a successful rezoning and project completion, invalidate the subsequent legislative zoning vote as illegal 'contract zoning' or an improper 'extraneous consideration'?
Opinions:
Majority - Cordy, J.
No, a developer's voluntary offer of a substantial monetary payment does not, standing alone, invalidate an otherwise lawful legislative zoning vote. A zoning enactment is a legislative act carrying a strong presumption of validity, and courts will not inquire into the motives that may have inspired the legislative action. The proper focus for review is whether the enactment violates state law or constitutional provisions, is arbitrary or unreasonable, or is substantially unrelated to the public health, safety, or general welfare. Here, the town followed the statutory procedures required by G. L. c. 40A, § 5, and the rezoning itself served a valid public purpose by promoting economic development, as identified by a town task force years earlier. The $8 million offer was not a binding agreement that illegally contracted away the town's police power before the vote; it was a unilateral offer that did not bind the town meeting voters. Therefore, the offer of a gift, which the court declined to label an invalidating 'extraneous consideration,' is not an independent ground on which to set aside this valid legislative act.
Concurring-in-part-and-dissenting-in-part - Spina, J.
Yes, on the merits, the town meeting improperly agreed to exercise its power to rezone land in exchange for a promise to pay money, which constitutes an illegal sale of its police power. The undisputed evidence shows that the $8 million offer, which was not intended to mitigate any impact from the development, was the dominant motive for the vote. This was a bargain where the town sold its zoning power for an unenforceable promise of payment, and such an 'extraneous consideration' should invalidate the vote. However, I concur in the court's ultimate judgment in favor of the defendants because the plaintiffs lack standing to bring this action. They were not a party to the illegal contract and have not claimed any particular injury, such as their land being adversely affected by spot zoning. Absent standing, the court lacks subject matter jurisdiction over their claim.
Analysis:
This decision significantly clarifies the doctrine of 'contract zoning' in Massachusetts, providing greater latitude for municipalities and developers to negotiate community benefits. By rejecting the 'extraneous consideration' theory as an independent basis for invalidating a zoning ordinance, the court reinforces a highly deferential standard of review for legislative zoning acts. This ruling insulates zoning decisions from challenges based on the motives of the voters or the influence of financial incentives, focusing instead on procedural correctness and the rational basis of the underlying zoning change. The decision effectively blesses voluntary, unilateral offers of public benefits, which will likely encourage more developers to include such offers in their proposals to gain public support.
