Nova Horizon, Inc. v. City Council of the City of Reno

• Decision Date: 28 February 1989
• Docket Number: No. 16555,16555
• Citation: 105 Nev. 92,769 P.2d 721
• Parties: NOVA HORIZON, INC., a Nevada corporation, and Nova Invest, a Nevada corporation, Appellants, v. The CITY COUNCIL OF THE CITY OF RENO and the members thereof, consisting of Pete Sferrazza, Richard Scott, Janice Pine, Florence Lehners, James Thornton, Dave Howard and Gus Nunez, Respondents.
• Court: Nevada Supreme Court

Page 721

769 P.2d 721

105 Nev. 92

NOVA HORIZON, INC., a Nevada corporation, and Nova Invest, a Nevada corporation, Appellants, v. The CITY COUNCIL OF THE CITY OF RENO and the members thereof, consisting of Pete Sferrazza, Richard Scott, Janice Pine, Florence Lehners James Thornton, Dave Howard and Gus Nunez, Respondents.

No. 16555.

Supreme Court of Nevada.

Feb. 28, 1989.

James W. Hardesty, Reno, for appellants.

Robert L. Van Wagoner, City Atty., John R. McGlamery, Asst. City Atty., Reno, for respondents.

OPINION

PER CURIAM: ¹

Appellants are developers who planned to build a hotel/convention center (the Project) on land next to the Bally Grand in Reno. Prior to submitting an application for necessary approvals, appellants purchased the land in question. The plot consists of 2.9 acres, bordered on three sides by the Bally Grand. On August 29, 1984, appellants submitted to the Reno Planning Commission an application requesting:

1. a change of zoning, M-1 to C-3;

2. a Special Use Permit; and

3. acceptance of a tentative subdivision map,

to construct a twenty-eight story, 804-room hotel and casino. At that time, the property owned by appellants was zoned M-1 as defined and limited in Section 18.06.270 of the Reno Municipal Code. M-1 zoning allows commercial development but imposes height restrictions of sixty-five feet, which would not accommodate appellants' project as planned. Additionally, M-1 does not allow any residential use and the proposed project was planned to include the sale of 312 units on a time-share basis.

On November 7, 1984, the Reno Planning Commission, by a vote of four to three, recommended to the City Council that it approve the three separate requests. Appellants' application came before respondents on December 10, 1984. At that time, a public hearing was held wherein appellants presented their case and the community was given the opportunity to respond. After the conclusion of testimony, the City Council unanimously voted to deny all of appellants' requests.

On December 24, 1984, the Reno City Attorney presented to respondents a document entitled "Findings and Conclusions." This document consisted of a list of post-hearing considerations developed by the City Attorney and presented to respondents. This document was read into the minutes of the Reno City Council, which approved and adopted it. Thereafter, appellants filed a petition for a writ of mandamus with the district court. An order for issuance of an alternative writ was issued on January 2, 1985. Appellants also filed a motion in limine in an attempt to preclude the use of the document entitled "Findings and Conclusions."

After a hearing on appellants' petition, the district court denied both appellants' motion in limine and their petition for writ of mandamus. In its decision, the court concluded as a matter of law that there was substantial evidence supporting respondents' denial of the zone change, the special use permit, and acceptance of the subdivision map. The district court also held that the City's land use/transportation guide was nothing more than a guide and could not be construed to compel a change in the zoning of property.

We note, preliminarily, that the district court properly subjected the City's action to a substantial evidence standard of review. This court, in addressing the propriety of a district court ruling reversing a zone change approval by the appropriate governmental body, declared:

Respondents recognize the general rule that a court is not empowered to substitute its judgment for that of a zoning board, in this case the board of county commissioners, when the board's action is supported by substantial evidence.

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The lower court had before it the same evidence as the board. Its function was not to conduct a trial de novo, but only to ascertain as a matter of law if there was any substantial evidence before the board which would sustain the board's action. The function of this court at this time is the same as that of the lower court. [Citation omitted.]

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Under the police power, zoning is a matter within sound legislative action and such legislative action must be upheld if the facts do not show that the bounds of that discretion have been exceeded.

McKenzie v. Shelly, 77 Nev. 237, 240-242, 362 P.2d 268, 269-70 (1961). In Shelly, we reversed the district court since the presumptive validity of the board's action was supported by substantial evidence and there was no showing that the board abused its discretion.

Numerous cases support the premise that zoning boards may not unreasonably or arbitrarily deprive property owners of legitimate, advantageous land uses. For example, the Supreme Court of Virginia affirmed a trial court decision holding an unduly restrictive zoning classification void. Town of Vienna Council v. Kohler, 218 Va. 966, 244 S.E.2d 542 (1978). The Kohler court concluded that "a denial of a rezoning request will not be sustained if under all the facts of the particular case, the denial is unreasonable, or is discriminatory, or is without substantial relationship to the public health, safety, morals and general welfare." Id. 244 S.E.2d at 548. See also, e.g., Raabe v. City of Walker, 383 Mich. 165, 174 N.W.2d 789 (1970) (invalidating rezoning of small enclave in midst of residential area to accommodate an industrial park); City of Conway v. Housing Authority, 266 Ark. 404, 584 S.W.2d 10 (1979) (City of Conway directed to rezone property, as the denial of the rezoning request was arbitrary and inconsistent with surrounding zoning); Lowe v. City of Missoula, 165 Mont. 38, 525 P.2d 551 (1974) (restrictive zoning impressed on landowner's property was so lacking in fact information as to constitute an abuse of discretion; rezoning held to be invalid). In the latter case, the Montana Supreme Court, quoting from an earlier case, stated:

Under the guise of protecting the public or advancing its interest, the state may not unduly interfere with private business or prohibit lawful occupations, or impose unreasonable or unnecessary restrictions upon them. Any law or regulation which imposes unjust limitations upon the full use and enjoyment of property, or destroys property value or use, deprives the owner of property rights.

In the instant case, the requested change in zoning was in conformity with the long-range development plans adopted by the City of Reno. The zone change was requested at the suggestion of the Reno City Planning staff and is consistent with the zoning of the surrounding property. Moreover, it appears that appellants may have invested substantial sums of money (allegedly over $1,200,000.00) in land acquisition and project development costs in anticipation of the City's approval of their application.

At the public hearing in which appellants' application was considered, only one person presented opposition to the project and his objections were basically rebuffed by members of the Reno City Council. Nevertheless, the Council unanimously denied approval to what was described as an architecturally "superior" project on the specified grounds that approval would violate a campaign promise against locating new casinos outside the "downtown area" and a similar pledge to diversification that would pay higher employee wages.

In determining whether the action of the Council concerning the zone change was without substantial evidentiary support and, consequently, an abuse of discretion, it is essential to first consider the effect of the City's master plan, as amended, and land use/transportation guide on the Council's latitude in zoning matters.

Chapter 278 of the Nevada Revised Statutes governs many aspects of planning and zoning. It not only provides for the...