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Competitors Challenging Land Use Approvals

Real estate lawyers and developers know that overcoming NIMBYism is a huge challenge. We are finding that even after approval, you still may face other hurdles including neighbors or even your business competitors challenging or appealing your zoning or permit approval.

Virginia Lawyer’s Weekly recently reported that the Supreme Court of Virginia issued an “unusual order” ... “acting with uncommon speed” when it ordered a halt to two planned local government hearings in Prince William County in such a case.

Spectrum Healthcare obtained zoning and permit approval and started construction of a health care facility as part of a bid for a federal government contract. A competitor of Spectrum, CRA, lost out on the federal contract award and filed a bid protest. CRA separately requested a zoning interpretation from local officials that the use of the facility would violate local ordinances. The zoning administrator rejected CRA. CRA then tried to “appeal” that interpretation to the local Board of Supervisors and Board of Zoning Appeals (BZA).

Spectrum asked the local circuit court to step in and issue an injunction stopping the CRA appeals. The circuit court refused finding that Spectrum should first exhaust its administrative remedies. Spectrum then filed an expedited review request to the Supreme Court of Virginia. This request resulted in the rapid order from the court ordering a stay of the BZA and Board of Supervisors hearings pending the circuit court’s complete review.

The standard in Virginia is that only an “aggrieved person” may appeal a “determination” of a zoning administrator. Even beyond the Spectrum case, I have started to hear rumblings of other parties aggressively attacking zoning and permit decisions, including properties which are not adjoining or even nearby but which instead involve business competitors. We can expect this issue to continue to percolate, and possibly be the topic of legislation soon. Be warned that approval may not be the end of challenges.

(Full disclosure: My colleague, Raighne Delaney, represents Spectrum Healthcare in this case.)

Reprinted with permission from the Washington Business Journal.

  • Timothy R. Hughes

    Timothy Hughes is the managing shareholder of Bean, Kinney & Korman. In that role, Tim is charged with managing the strategy, talent, and finances of the firm.

    Tim’s practice started in litigation and alternative dispute ...