Lake Bluff Housing Partners v. City of South Milwaukee, 94-1155

• Decision Date: 10 August 1994
• Docket Number: No. 94-1155,94-1155
• Citation: 525 N.W.2d 59,188 Wis.2d 230
• Court: Wisconsin Court of Appeals
• Parties: LAKE BLUFF HOUSING PARTNERS, a Wisconsin limited partnership, Plaintiff-Respondent, v. CITY OF SOUTH MILWAUKEE, and Michael Vesperman, in his capacity as City Building Inspector, Defendants-Appellants. d . Oral Argument

Page 59

525 N.W.2d 59

188 Wis.2d 230

LAKE BLUFF HOUSING PARTNERS, a Wisconsin limited partnership, Plaintiff-Respondent, v. CITY OF SOUTH MILWAUKEE, and Michael Vesperman, in his capacity as City Building Inspector Defendants-Appellants. ^d

No. 94-1155.

Court of Appeals of Wisconsin.

Oral Argument Aug. 10, 1994.

Opinion Released Oct. 4, 1994.

Opinion Filed Oct. 4, 1994.

For the defendants-appellants the cause was submitted on the briefs of the City of South Milwaukee and Michael Vesperman, in his capacity as City Bldg. Inspector, with Joseph G. Murphy of South Milwaukee.

For the plaintiff-respondent the cause was submitted on the briefs of Weiss, Berzowski, Brady & Donahue, with Debra A. Slater of Milwaukee.

Before SULLIVAN, FINE and SCHUDSON, JJ.

SCHUDSON, Judge.

The City of South Milwaukee and its building inspector, Michael Vesperman (the City), appeal from the trial court judgment in favor of Lake Bluff Housing Partners, granting Lake Bluff a writ of mandamus directing the City to issue a building permit. The City argues that the trial court erred in concluding that Lake Bluff had acquired vested rights in the property on which it intended to build. We conclude that the trial court correctly determined that Lake Bluff had acquired vested rights in the property. We also conclude that the trial court exercised reasonable discretion in granting mandamus to compel the City to issue a building permit to Lake Bluff.

I. FACTUAL BACKGROUND

The essential facts relevant to resolution of this appeal are not in dispute. According to the record and the trial court findings, Lake Bluff is a Wisconsin limited partnership engaged in the business of developing rental property. In December 1992, Lake Bluff purchased a parcel of land running along the shore of Lake Michigan in the City of South Milwaukee. Lake Bluff acquired the property, intending to construct a multi-family development that would qualify for low income housing tax credits administered by the Wisconsin Housing and Economic Development Authority (WHEDA).

Since 1965, the land had been zoned C-2, a classification that allowed for construction of multi-family residential units. Before purchasing the land, Lake Bluff verified that it was zoned C-2, and that such zoning would allow for a multi-family development. The controversy in this case surrounds the circumstances between the time Lake Bluff purchased the land, and the time South Milwaukee rezoned the property and denied the building permit.

WHEDA awarded Lake Bluff a $266,903 site-specific tax credit for the project at the property. After receiving the WHEDA award of the tax credit, Lake Bluff paid WHEDA a non-refundable fee of $16,314, to reserve the credit. Lake Bluff then obtained a survey of the property at a cost of $1,150, and contracted with its architect to prepare plans for the project at a cost of $29,513. The trial court found that in order to preserve the WHEDA tax credit, Lake Bluff's project had to be built, and certificates of occupancy had to issue by December 31, 1994. Further, the trial court found that, in order for this to occur, Lake Bluff had to begin construction immediately.

In February 1993, representatives of Lake Bluff met with the mayor, city administrator, building inspector, city engineer, and district alderperson of South Milwaukee to review initial plans for the project, and to confirm that the project could proceed to the construction stage. The City confirmed that the property was in a C-2 zone that permitted a multi-family project. At that same meeting, however, the City advised Lake Bluff that in order to obtain a building permit, it would have to provide a bluff assessment establishing that the project would not cause bluff erosion. The City also advised Lake Bluff that South Milwaukee's parking requirements had changed and that Lake Bluff would have to modify its plans to meet the new requirements. As a result, Lake Bluff modified its parking plans and also commissioned a bluff erosion study costing $4,950. Further, as a result of that study, Lake Bluff modified its plans so that one of the buildings would be relocated.

Lake Bluff continued to develop its plans between February and June 1993, when, for the first time, it learned that the City was considering imposing a moratorium on the issuance of any building permits for the property because of a request from one of the property's neighbors. In a letter of April 28, 1993, the neighbor, William J. Fox, III, had requested that the land be rezoned from C-2 to R-A, a classification that would not allow for Lake Bluff's multi-family residential development. On May 6, the City referred Fox's request to its Plan Commission which, on May 24, referred the matter to the South Milwaukee City Attorney for review and comment. The Plan Commission also recommended that no building permits issue while the rezoning request was under consideration. The trial court found that Lake Bluff did not learn that the City was considering a moratorium on the issuance of any building permits for the property or a rezoning until June 22, 1993, and did not have an opportunity to participate in the May meetings of the Plan Commission or the Common Council.

On July 6, 1993, the South Milwaukee Common Council adopted a resolution, pertaining only to the Lake Bluff property, imposing a moratorium on the issuance of a building permit. The Plan Commission then considered the rezoning request at its meeting of July 12. The Plan Commission minutes of that meeting state in part:

William Fox restated his request to rezone the land ... from C-2 Commercial to R-A Residential. A memo from the City Attorney was read ... in which he advised that a moratorium on the issuance of building permits for the property may be lawfully be [sic] imposed provided it is enacted by resolution ¹ and reasonably related to the consideration of the rezoning of that property. [Alderman] Tessmer questioned the legality of rezoning any property without the consent of the owner, in this case, Lake Bluff Housing Partners. [Attorney] Eli Frank, representing Lake Bluff Housing Partners, stated his clients purchased the property in good faith, fully aware of the requirements of the existing zoning. They have expanded [sic] considerable effort planning an apartment complex which complies with every aspect of the City's zoning regulations.

On August 5, 1993, the Wisconsin Department of Industry, Labor and Human Relations issued its conditional approval of Lake Bluff's plans, thus enabling Lake Bluff to seek a footing and foundation building permit and then to begin construction. That same day, Lake Bluff did submit its application for the permit, but the building inspector denied the permit because of the moratorium. Two days later, Lake Bluff began a series of attempts to learn whether its application was deficient in any way, or whether the denial was based solely on the moratorium. Among other efforts, on August 7, Lake Bluff wrote to Vesperman:

Pursuant to our application for a "Footing/Foundation" permit on Thursday, August 5, 1993, ... it is the understanding of this office that the following additional information will be required:

a. the City Engineer ... will review the drawings deposited with your office to "verify site/building grades" for conformance,

b. your office will review the drawings deposited with your office for "conformance to required set backs,"

c. two (2) additional sets of drawings are required for application, one (1) additional "State Approved" copy, plus one (1) not necessarily stamped set,

d. evidence of "DILHR Letter of Approval" dated August 5, 1993 for each building, copies of which have been sent directly to your office by DILHR via the U.S. Mail, and

e. Footing/Foundation permit for the above captioned project "has been denied" per [the moratorium] dated July 6, 1993. Any questions concerning this matter should be referred to the City Attorneys office, attention Mr. Joseph Murphy.

Should you be in disagreement with any of the contents of this letter, please notify this writer via facsimile ... with a hard copy via U.S. mail, prior to the close of business on Monday, August 9, 1993.

The City did not respond. On August 20, Lake Bluff wrote to the City requesting a specific response that its application either: (1) would be approved, but for the moratorium; or (2) would be disapproved, even if there were not a moratorium, because of noncompliance. ² On August 24, the city attorney replied to the August 20 letter, writing, in part:

Please be advised that Mr. Vesperman has not yet reviewed the plans presented for the structural aspects of the property, has not verified the setbacks and zoning compliance and erosion control measures contemplated and the City Engineer has not had the opportunity to check the grading and zoning compliance. Furthermore, the Building Board of Review has not yet reviewed the plans.

Also, please be advised that inasmuch as the moratorium will not allow construction of this project until after November 4, 1993, neither the City Building Inspector nor the City Engineer intends to drop everything else that they are currently engaged in to process this application for a building permit. Your application for a permit will simply have to wait its turn for the attention like everything else that is coming across their desk. If there is some reason that their review ought to be advanced and expedited, please advise me.

Although Lake Bluff did not reply directly to the city attorney's request to be advised "if there is some reason that ... review ought to be advanced and expedited," a Lake Bluff general partner wrote letters to the mayor of South Milwaukee on September 24 and October 7, requesting, in part, consideration "under whatever zoning category it may legally be determined to be now or in the future...." Despite Lake Bluff's efforts to secure a review of its plans, and despite the fact that, normally,...