In re Korrow Real Estate, LLC, 2017-133

• Decision Date: 13 April 2018
• Docket Number: No. 2017-133,2017-133
• Citation: 2018 VT 39
• Court: Vermont Supreme Court
• Parties: In re Korrow Real Estate, LLC Act 250 Permit Amendment Application (State of Vermont, Appellant)

2018 VT 39

In re Korrow Real Estate, LLC Act 250 Permit Amendment Application (State of Vermont, Appellant)

No. 2017-133

Supreme Court of Vermont

November Term, 2017

April 13, 2018

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal revision before publication in the Vermont Reports. Readers are requested to notify the Reporter of Decisions by email at: JUD.Reporter@vermont.gov or by mail at: Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may be made before this opinion goes to press.

On Appeal from Superior Court, Environmental Division

Thomas S. Durkin, J.

Thomas J. Donovan, Jr., Attorney General, and Kyle H. Landis-Marinello, Assistant Attorney General, Montpelier, for Appellant.

L. Brooke Dingledine of Valsangiacomo, Detora & McQuesten, P.C., Barre, and David L. Grayck of Law Office of David L. Grayck, Montpelier, for Appellee.

PRESENT: Reiber, C.J., Robinson, Eaton and Carroll, JJ., and Wesley, Supr. J. (Ret.), Specially Assigned

¶ 1. EATON, J. The District 5 Commission denied Korrow Real Estate LLC's as-built application for an Act 250 permit to construct a barn on property alongside the Dog and Stony Brook Rivers, finding the project failed to comply with Act 250 Criteria 1(D) and 1(F). In doing so, the Commission construed key terms as defined by the Agency of Natural Resources (ANR). On appeal, the Environmental Division reversed the decision and remanded the matter to the Commission with instructions to grant an as-built permit for the project. The Vermont Natural Resources Board now appeals the court's decision, asserting that the court failed to accord proper deference to the ANR's statutory authority and expertise, and that the project fails to comply with the necessary Act 250 permitting criteria. We affirm in part, and reverse and remand in part.

I. Facts and Procedural History

¶ 2. By way of background, appellee, Korrow Real Estate LLC (Korrow), owns properties off Vermont Route 12A in the Town of Northfield, on either side of Stony Brook Road. On the northerly side of Stony Brook Road is an improved parcel of land that hosts offices for Gillespie Fuels and Propane, a business related to Korrow. In 2011, Korrow began constructing a large barn on a parcel of land on the southerly side of Stony Brook Road. Korrow intended to use the barn to house Gillespie propane trucks. As built, the barn is roughly 8000 square feet, and sits at the confluence of the Dog River and the Stony Brook River. After the project was complete in the summer of 2012, Korrow brought dry pack onto the property to level the parking area inside the barn. Korrow also brought a small amount of earthen fill to level areas outside the barn. Portions of this fill were placed in proximity to the nearby rivers. Prior to building the barn and bringing in the fill, Korrow sought and received a municipal zoning permit. However, Korrow constructed these improvements without first obtaining an Act 250 permit, which is required for development of this kind. It was not asserted this omission was intentional.

¶ 3. In 1970, the Vermont Legislature passed Act 250 to protect and conserve Vermont's lands and environment, and to ensure that land use would not be detrimental to the public welfare and interests. 1969, No. 250, § 1 (Adj. Sess.); see generally 10 V.S.A. §§ 6001-6111. Act 250 requires a land-use permit before certain development can occur. 10 V.S.A. § 6081(a) ("No person shall . . . commence development without a permit."). "Development" means, in relevant part, "[t]he construction of improvements for commercial or industrial purposes on more than one acre of land within a municipality that has not adopted permanent zoning and subdivision bylaws." Id. § 6001(3)(A)(ii). Korrow's project is a "development" subject to Act 250 because it is a commercial project constructed on a 6.5-acre parcel in a municipality that hasnot adopted permanent zoning and subdivision bylaws. As such, the Korrow project requires an Act 250 permit to remain as built on the property site.

¶ 4. When Act 250 applies to development, a permit can only issue if the project complies with all ten Act 250 criteria. Id. § 6086(a)(1) (outlining conditions and criteria necessary for project development). These criteria specifically address development on or near waterways and rivers. Id. On appeal, the parties dispute whether the Korrow project complies with Act 250 Criterion 1(D), pertaining to development within the "floodway" and "floodway fringe" of nearby waters, and Criterion 1(F), pertaining to development on "shorelines." Id. § 6086(a)(1)(D), (F). These provisions of Act 250 aim to protect Vermonters from the hazards of flooding and erosion, and to preserve the scenic and recreational features of rivers and their shorelines. Id. An applicant for an Act 250 permit, such as Korrow, bears the burden of proving compliance with both Criterion 1(D) and Criterion 1(F). Id. § 6088(a).

¶ 5. To determine project compliance with Criterion 1(D), the threshold question is whether the project is in the "floodway" or "floodway fringe" of a nearby waterway; if it is, then the applicant must prove that the project will not "restrict or divert the flow of flood waters," and "significantly increase the peak discharge of the river," and "endanger the health, safety and welfare of the public or of riparian owners during flooding." Id. § 6086(a)(1)(D)(i), (ii).

¶ 6. Similarly, Criterion 1(F) requires a threshold determination as to whether the project is located on a "shoreline." Id. § 6086(a)(1)(F). If so, shoreline development "must of necessity be located on a shoreline" and must be conducted in a manner that "will, insofar as possible and reasonable": (1) retain shorelines and waters "in their natural condition"; (2) allow continued and recreational access to the waters; (3) provide screening between the development and the river; and (4) "stabilize the bank from erosion, as necessary, with vegetation cover." Id. § 6086(a)(1)(F)(i)-(iv).

¶ 7. Act 250 provides definitions for the terms "floodway, "floodway fringe," and "shoreline":

(6) "Floodway" means the channel of a watercourse which is expected to flood on an average of at least once every 100 years and the adjacent land areas which are required to carry and discharge the flood of the watercourse, as determined by the Secretary of Natural Resources with full consideration given to upstream impoundments and flood control projects.

(7) "Floodway fringe" means an area which is outside a floodway and is flooded with an average frequency of once or more in each 100 years as determined by the Secretary of Natural Resources with full consideration given to upstream impoundments and flood control projects.

. . . .

(17) "Shoreline" means the land adjacent to the waters of lakes, ponds, reservoirs, and rivers. Shorelines shall include the land between the mean high water mark and the mean low water mark of such surface waters.

10 V.S.A. § 6001(6), (7), (17) (emphases added). These provisions expressly grant the ANR authority to define the scope of the "floodway" and "floodway fringe." Id. § 6001(6), (7). If the ANR determines that a project falls within the "floodway" or "floodway fringe," then the project must also comply with additional Criterion 1(D) specifications to receive permit approval. 10 V.S.A. § 6086(a)(1)(D)(i)-(ii) (requiring project will not "restrict or divert the flow of flood waters," and "significantly increase the peak discharge of the river," and "endanger the health, safety and welfare of the public or of riparian owners during flooding").

¶ 8. The Natural Resources Board (NRB) has statutory authority to adopt rules pertaining to Act 250 permit applications. 10 V.S.A. § 6025(b) ("The Board may adopt substantive rules . . . that establish criteria under which applications for permits under this chapter may be classified in terms of complexity and significance of impact under the standards of subsection 6086(a) of this chapter."). The NRB has adopted such a rule defining "shoreline" for the purpose of determining compliance with Criterion 1(F). Act 250 Rules, Rule 2(C)(20),http://nrb.vermont.gov/sites/nrb/files/documents/2015%20Adopted%20Rules.pdf [https://perma.cc/4G79-LLZY] [hereinafter NRB Rule]. NRB Rule 2(C)(20) defines "shoreline" as follows:

For purposes of 10 V.S.A. § 6086(a)(1)(F), a project involves the "development or subdivision of shorelines," if:

(a) the project involves construction on or the use of "the land between the mean high water mark and the mean low water mark of such surface waters." 10 V.S.A. § 6001(17), or

(b) the project, or an element of the project which is adjacent to the shoreline, has the potential for significant impact on any of the sub criteria specified in 10 V.S.A. § 6086(a)(1)(F)(i)-(iv).

¶ 9. With these definitions in mind, we return to Korrow's application to the District Commission for an as-built Act 250 permit. Applications for an Act 250 permit are filed with the District Commission to determine compliance with Act 250 criteria, including Criterion 1(D) and Criterion 1(F) discussed above. 10 V.S.A. § 6083(a) ("An application for a permit shall be filed with the District Commission as prescribed by the rules of the [Natural Resources] Board . . . ."). In the application at issue, Korrow indicated the project involved "development or subdivision on or near a river, lake, pond or reservoir shoreline." The Commission heard testimony from an ANR expert regarding the project's potential impacts on the Dog and Stony Brook Rivers, and evaluated the project's compliance with Act 250 Criteria 1(D) and 1(F).

¶ 10. Regarding Criterion 1(D), the ANR calculated the scope of the "floodway" and "floodway fringe" and determined that the Korrow project fell within the Act 250 "floodway." To calculate the scope of the "floodway," the ANR adhered to its "Technical Guidance for Determining Floodway...