With the U.S. economy appearing increasingly likely to enter a recession in the coming months, many real estate developers may face obstacles in completing projects. If demand in the real estate market drops and economic activity contracts, many development projects that may have been profitable in the past will no longer be economically feasible. Some developers will hold off on their projects until the economy improves. A Rhode Island Superior Court recently ruled on a case filed by a developer attempting to resume development on a parcel of land that had stalled after the 2008 recession.
According to the facts discussed in the appellate opinion, the plaintiff is a developer who sought approval in 2007 to construct a mixed-use residential/commercial complex in the town of Tiverton. In 2008, the plaintiff gained the town’s approval for construction. After the 2008 real estate crash the project was no longer feasible, and the developer sat on the property for 14 years. In 2020, the plaintiff sought to resume the project and sought additional approvals from the town.
The town zoning board rejected the plaintiff’s 2020 application, pointing to the fact that new regulations concerning stormwater would require significant changes to the plaintiff’s plan, which must then go through more strenuous steps for approval. The plaintiff appealed the ruling to the administrative board of appeals for the town, which upheld the decision. The plaintiff then appealed the rulings to state court, arguing that the town was acting arbitrarily and capriciously by denying their request without justification. Specifically, the plaintiff argued that the town’s regulations were not in accordance with Rhode Island state law, which required towns to publish and apply consistent factors in making a zoning determination.
Because the town did not have any law or regulation on the books explaining the factors that would be used in approving a zoning request, the court agreed with the plaintiff that their ruling was arbitrary and capricious. The Court noted that the plaintiff’s initial plan was approved in 2008, and the approval was still valid, and the town couldn’t go back and apply laws that were passed after the fact to deny the plaintiff’s request. The court ultimately reversed the zoning board’s decision and instructed the board to consider the plaintiff’s request as a “minor change” and to apply the law accordingly. The plaintiff’s project still may be ultimately rejected, but this decision remains a definite win for the developer.
Where to Find Answers to Real Estate Development Questions
If you are considering developing a piece of property in Rhode Island, the state laws, municipal ordinances, and administrative regulations that you must follow can be daunting. Formulating a robust development plan and presenting it persuasively to a municipal zoning board from the start gives you the best chance for easy approval. The experienced Rhode Island real estate attorneys at Bilodeau Capalbo have assisted developers with multi-million dollar projects in this state. With our knowledge and skill, you can be comfortable that your project is in good hands. Our Rhode Island property attorneys represent clients in all real estate cases, including zoning issues. Contact our offices today and schedule a free consultation by calling 401-300-4055.