Steel Hill Development, Inc. v. Town of Sanbornton

Decision Date17 February 1972
Docket NumberCiv. A. No. 3319.
Citation338 F. Supp. 301
PartiesSTEEL HILL DEVELOPMENT, INC. v. TOWN OF SANBORNTON, a municipal corporation, et al.
CourtU.S. District Court — District of New Hampshire

Stanley M. Brown, McLane, Carleton, Graf, Greene & Brown, Manchester, N. H., for plaintiff.

Peter V. Millham, Wescott, Millham & Dyer, Laconia, N. H., for defendant Town of Sanbornton.

OPINION

BOWNES, District Judge.

In this zoning case, the plaintiff alleges that an amendment to the zoning ordinance of the defendant Town, enacted March 9, 1971, violates the Fifth and Fourteenth Amendments to the Constitution because it constitutes a taking of its property without due process of law and without compensation. Jurisdiction is based on 28 U.S.C. § 1331, and declaratory relief is sought pursuant to 28 U.S.C. § 2201.

Before venturing into the thicket of facts, it is necessary to fix our position by the generally accepted legal principles that apply to zoning cases. The basic guideline was laid down in Euclid v. Ambler Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926), in which the Court, in upholding the constitutionality of a zoning ordinance, said:

If these reasons, thus summarized, do not demonstrate the wisdom or sound policy in all respects of those restrictions which we have indicated as pertinent to the inquiry, at least, the reasons are sufficiently cogent to preclude us from saying, as it must be said before the ordinance can be declared unconstitutional, that such provisions are clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare. At page 395, 47 S.Ct. at page 121.

This principle was reiterated in Gorieb v. Fox, 274 U.S. 603, 47 S.Ct. 675, 71 L.Ed. 1228 (1927):

State legislatures and city councils, who deal with the situation from a practical standpoint, are better qualified than the courts to determine the necessity, character, and degree of regulation which these new and perplexing conditions require; and their conclusions should not be disturbed by the courts unless clearly arbitrary and unreasonable. At page 608, 47 S.Ct. at page 677.

In a recent federal case, the Eighth Circuit Court of Appeals noted:

Fairly debatable questions as to the reasonableness, wisdom and propriety of an ordinance are not for the deter-termination of the courts but for that of the legislative body on which rests the duty and responsibility of the decision. City of St. Paul v. Chicago, St. Paul, Minneapolis and Omaha Railway Co., 413 F.2d 762, 767 (8th Cir. 1969).

A Federal Court when asked to declare a state or local ordinance unconstitutional must heed the admonition of Justice Black in Ferguson v. Skrupa, 372 U.S. 726, 730, 83 S.Ct. 1028, 1031, 10 L.Ed.2d 93 (1963):

Legislative bodies have broad scope to experiment with economic problems, and this Court does not sit to "subject the State to an intolerable supervision hostile to the basic principles of our Government and wholly beyond the protection which the general clause of the Fourteenth Amendment was intended to secure." Quoting Sproles v. Binford, 286 U.S. 374, 388, 52 S.Ct. 581, 76 L.Ed. 1167 (1932).

The plaintiff has the burden of proving that the Sanbornton zoning change was clearly unreasonable and arbitrary. McMahon v. City of Dubuque, Iowa, 255 F.2d 154, 159 (8th Cir. 1958); Bosse v. City of Portsmouth, 107 N.H. 523, 226 A.2d 99 (1968); Schadlick v. City of Concord, 108 N.H. 319, 234 A.2d 523 (1967).

This case reflects the current clash between those interested in opening up new and hitherto undeveloped land for sale and profit and those wishing to preserve the rural character of Northern New England and shield it from the relentless pressure of an affluent segment of our society seeking new areas for rest, recreation and year round living.1 The Town of Sanbornton has a year round population of 1,000 with about 330 regular homes, and a summer population of double that with approximately 400 seasonal homes. It is about 100 miles north of Boston and lies astride one of the main Interstate Highways from Boston to Northern New England, Interstate 93. It is located in the Lakes Region of New Hampshire, bordering Lake Winnisquam and within easy reach of Lake Winnipesaukee, both of which are large, attractive, and extensively used recreational lakes. Its location also affords easy access to most of the major ski areas of New Hampshire.

The zoning change enacted in March of 1971 increased the minimum lot size of plaintiff's property from 35,000 square feet to three acres and six acres. The Town had enacted a zoning ordinance on March 13, 1965, pursuant to New Hampshire Revised Statutes Annotated, Chapter 31:60-89. During 1970 and until March 9, 1971, the zoning provisions in effect provided that the Town be divided into districts with minimum lot sizes as follows:

                General Residence and
                  Agricultural               35,000 square feet
                Commercial District                  - - -
                Recreational District        15,000 square feet
                Highway Commercial           35,000 square feet
                Historical Preservation              - - -
                Forest Conservation          6 Acres (261,360 square
                                             feet)
                

The amendments enacted in March of 1971 enlarged the Forest Conservation area and the General Agricultural area and changed the minimum lot sizes as follows:

                General Residence            1½ Acres
                General Agricultural         3 Acres
                Recreational                 1½ Acres
                Historical Preservation      1½ Acres
                Forest Conservation          6 Acres
                

Plaintiff is the owner of a single tract of land of about 510 acres which includes an Inn, Golf Course, Guest Cottages, and a few other buildings. Prior to 1971, all of the plaintiff's land was in the General Residence and Agricultural District with a minimum lot size of 35,000 square feet. As a result of the 1971 zoning change, all of the plaintiff's land was included in the Forest Conservation District with a minimum lot size of six acres, except for that portion lying 600 feet on either side of Steel Hill Road which is in the General Agricultural District with a minimum lot size of three acres. A fair estimate would be that 70% of the plaintiff's land is now zoned in the Forest Conservation District and approximately 30% in the three acre Agricultural District.

The plaintiff corporation was formed in November or December of 1965, and the property in question was purchased on December 23, 1969, for $290,000. Mr. Pepe, the moving figure behind the corporation, had extensive experience as a developer in Connecticut. He testified that the amount paid for the property was "a fair price." There is no doubt that the plaintiff corporation was formed and the purchase made with the intent of subdividing the property and selling house lots. The prior owner had started a survey of the land in September of 1969, and part of the property had been subdivided into thirty-five lots. Two or three lots had purchase deposits on them. As soon as the plaintiff became the owner of the property, it scrapped the survey and partial development, returned the purchase deposits, and instituted a new plan of development based on the so-called "cluster concept." This concept combined individual homesites on lots of 25,000 square feet or more with homesites grouped in clusters of three to fifteen sites on lots of approximately 12,000 square feet. The cluster sites were to have common land to equal or exceed 35,000 square feet. According to the plaintiff, the cluster would result in the best use of the area and preserve as much of the woodland as possible. Ex. 10. The plaintiff also estimated that development pursuant to the cluster concept rather than along conventional lines would result in increased profits of about $500,000. Ex. 13 and 14.

Pepe and his subordinates knew that development of the plaintiff's property in accord with the cluster concept would require an amendment to the zoning ordinance.2 In Mr. Pepe's own words, he took "a calculated risk" in basing his development plans on the cluster concept. Meetings were, therefore, scheduled with the Planning Board as part of "an educating and selling process." Testimony of Forristall. At the first meeting with the Board, the cluster concept was explained and the Board was also shown a plan of how the property could be developed as a trailer park and also a plan showing how the property could be developed under a conventional plan. It is fair to find that the plaintiff never intended to develop the property as a trailer park and that the plan was a tactical gambit used in the "education and selling process." As far as the conventional plan is concerned, I find that the plaintiff probably intended to use that as a last resort if the cluster concept was not approved. Although the Board was never given any accurate estimate of the number of units in the "Town House" cluster areas, it was made clear to them that the plan would provide for 500 to 515 family units. Meetings between the Board and representatives of the plaintiff continued through the summer, fall, and winter of 1970. A hint of what was to come was an amendment to the zoning law passed on July 20, 1970, providing for two Forest Conservation Areas with minimum lot sizes of six acres. A careful reading of the Planning Board minutes of 1970, Ex. 34, reveals that the Board did consider the plaintiff's proposed plans very carefully and in the beginning were favorably impressed by them. In the words of the secretary, the Board "gave cluster zoning quite a study." The Board minutes and the testimony of Marion Atwood, Secretary, and Mr. Livingstone, Chairman, also show that the Board was concerned about the orderly growth of the Town. Although they did not hire experts to assist them, since such experts were presumably furnished by the plaintiff they did carefully consider the problems of slope drainage, soil conditions, sewage disposal, traffic, access roads, and potential...

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  • Cloutier v. Town of Epping
    • United States
    • U.S. District Court — District of New Hampshire
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    ...housing for persons of low and moderate income — by and large, the young and the old. See discussion in Steel Hill Development, Inc. v. Town of Sanbornton, 338 F.Supp. 301 (D.N. H.1971), aff'd, 469 F.2d 956 (1st Cir. 1972) and Steel Hill Development, Inc. v. Town of Sanbornton, 392 F.Supp. ......
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    ...even substantially reduces the value of land, but does not cause a total loss of profitable use is normally held as not confiscatory. 338 F.Supp. 301, 307. In that case, as here, the land could still be used for "general farming and agricultural purposes." Id. The First Circuit Court of App......
  • Steel Hill Development, Inc. v. Town of Sanbornton
    • United States
    • U.S. District Court — District of New Hampshire
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    ...from the previous opinion of this Court as well as that of the Court of Appeals for the First Circuit, see Steel Hill Development, Inc. v. Town of Sanbornton, 338 F.Supp. 301 (D.N.H.), aff'd 469 F.2d 956 (1st Cir. 1972). These cases will hereinafter be referred to collectively as "Steel Hil......
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    • United States
    • U.S. Court of Appeals — First Circuit
    • 24 Noviembre 1972
    ...of an affluent segment of our society seeking new areas for rest, recreation and year round living." Steel Hill Development, Inc. v. Town of Sanbornton, 338 F.Supp. 301, 302 (D.N.H.1972). Steel Hill acquired its 510 acres in December 1969 and immediately began surveying the land, mapping th......
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