Opinion
Civil Docket No. CL09-5362 Civil Docket No. CL09-5401 Civil Docket No. CL10-8338 Civil Docket No. CL10-8346
12-14-2011
RE: City of Norfolk v. Norfolk 102 LLC and Norfolk 302 LLC, Norfolk 102, LLC t/a Bar Norfolk and Norfolk 302, LLC t/a Have a Nice Day Café v. Norfolk City Council November 17, 2010 Decision of Board of Zoning Appeals of the City of Norfolk, Virginia (Petition for Certiorari)
Bernard A. Pishko, Esq. City Attorney Adam D. Melita, Esq. Deputy City Attorney City of Norfolk Department of Law 900 City Hall Building 810 Union Street Norfolk, VA 23510 Marshall A. Winslow, Jr., Esq. Samuel W. Meekins, Jr., Esq. Wolcott, Rivers, Gates Convergence Center Four Suite 500 301 Bendix Road Virginia Beach, VA 23452-1385
NORMAN A. THOMAS JUDGE Bernard A. Pishko, Esq.
City Attorney
Adam D. Melita, Esq.
Deputy City Attorney
City of Norfolk
Department of Law
900 City Hall Building
810 Union Street
Norfolk, VA 23510 Marshall A. Winslow, Jr., Esq.
Samuel W. Meekins, Jr., Esq.
Wolcott, Rivers, Gates
Convergence Center Four
Suite 500
301 Bendix Road
Virginia Beach, VA 23452-1385 Gentlemen:
In these consolidated land use cases, the parties contest numerous issues respecting whether Norfolk 102, LLC t/a Bar Norfolk and Norfolk 302, LLC t/a Have a Nice Day Café (hereinafter "Bar" and "Hand") lawfully may operate on and after August 18, 2009, as Entertainment Establishments serving on-premises alcoholic beverages in the spaces leased by them and located in the Waterside Festival Marketplace (hereinafter "Waterside"). Waterside is located 333 Waterside Drive in Norfolk, situate on riparian property along the Elizabeth River.
The City of Norfolk (hereinafter "the City") seeks injunctive relief prohibiting Bar and Hand from providing entertainment and serving alcoholic beverages in the aftermath of Norfolk City Council's (hereinafter "Council") actions on August 18, 2009, when it revoked a "blanket" special exception permitting businesses located within Waterside to operate as entertainment establishments and denied Bar and Hand's individual applications for special exceptions to conduct such operations. In turn, Bar and Hand seek injunctive and declaratory relief to prohibit Council from interfering with their provision of entertainment and serving of alcoholic beverages on their premises, declaring Council's August 18, 2009 action to revoke the blanket special exception to be "unlawful, invalid, void and violative of constitutional rights", and further declaring that Bar and Hand each possess "vested and grandfathered rights" to provide entertainment and serve alcoholic beverages at Waterside. Bar and Hand also, upon Petitions for Writs of Certiorari, request the Court to reverse the November 17, 2010 decisions of Norfolk's Board of Zoning Appeals holding that Bar and Hand possessed no vested rights to provide entertainment or sell alcoholic beverages at Waterside.
The Court frames the issues as follows:
1. Whether the City, pursuant to Virginia Code Section 15.2-1432 and other applicable law, is entitled to injunctions against Bar and Hand prohibiting them from operating as Entertainment Establishments and serving on-premises alcoholic beverages at Waterside?
2. Whether Bar and Hand are entitled to common law injunctive relief against the City prohibiting it from interfering with their operating as Entertainment Establishments and serving on-premises alcoholic beverages at Waterside?
3. Whether Bar and Hand are entitled, pursuant to Virginia Code Section 8.01-184, et. seq., to declaratory relief holding that City Council acted unlawfully on August 18, 2009 when it revoked the blanket special exception respecting the operation of Entertainment Establishments at Waterside and denied the applications of Bar and Hand for individual special exceptions to conduct such business operations at Waterside?
4. Whether the Board of Zoning Appeals correctly ruled that Bar and Hand possessed no vested rights to operate as Entertainment Establishments and serve on-premises alcoholic beverages at Waterside?
In reaching its decisions on the several issues noted above, the Court considered the entirety of the evidentiary record developed by the parties over the months of litigation in these cases, as well as the arguments of counsel and the legal authorities cited by them. In this letter-opinion the Court considers and decides each of the issues. To the extent that it omits a discussion of any particular legal argument raised by counsel, the parties should interpret that omission as either the Court's rejection of that argument or a determination of its irrelevance to the correct decision on the issue or issues upon which counsel advanced it.
FACTUAL FINDINGS AND
PRELIMINARY LEGAL DETERMINATIONS
Waterside opened on June 1, 1983, as a result of a public-private partnership created in conjunction with redevelopment efforts focused on Norfolk's downtown waterfront. Norfolk's zoning ordinance, as in effect when Waterside opened, placed it in the SPI-1: Downtown Waterfront Special Public Interest District. The permitted principal uses of that district included: "Eating and drinking establishments, including commercial recreation restaurants and those with dancing and live entertainment . . . establishments for the sale of beer, wine and/or mixed beverages for on-premises consumption, subject to a use permit [.] Norfolk Zoning Ordinance of 1968, §451.2(4).
The term "use permit" as utilized in Norfolk's 1968 Zoning Ordinance gave way to the term "special exception" in Norfolk's 1992 Zoning Ordinance. With respect to the parties' disputes in these cases, the two terms essentially are synonymous, denoting a land use within a particular zoning district permitted only after having obtained from Council an ordinance that allowed the use and provided for various limitations of and specific conditions upon such use.
On February 15, 1983, Council enacted Ordinance Number 32,160 (hereinafter "the 1983 Ordinance") granting a use permit to Waterside's developer, "authorizing the use of property as an urban marketplace type shopping center having uses such as retail shops, food stores, food and beverage stalls and restaurants, including the sale of beer, wine and mixed beverages for on-premises consumption within such specific premises as may be licensed by the Virginia Alcoholic Beverage Control Commission [.]" (Plaintiff's Exhibit 1) The Ordinance specified the use permit's geographic scope as follows:
All that certain lot, piece or parcel of land known and designated as Parcel R-1 on that certain plat entitled "Plat of Property-Parcel R-1" attached as Exhibit A-1 to
the Deed of Lease dated November 25, 1981, between Waterside Associates and the Norfolk Redevelopment and Housing Authority [.]
The 1983 Ordinance, establishing a "blanket" (or "general") use permit for Waterside, by its terms created a system of sub-use permits for issuance to individual building tenants. The ordinance anticipated that such sub-use permits would be "granted subject to the conditions, including restrictions, imposed upon such use at the designated premises by the Zoning Ordinance of the City of Norfolk, 1968", and imposed a number of specific terms and conditions thereon. Among its other provisions, in sub-paragraph 4 of the ordinance it specified the following requirements:
Tenants of those premises which have been licensed by the Virginia Alcoholic Beverage Control Commission shall apply to the Zoning Administrator of the City of Norfolk for a Sub-Use Permit to operate the proposed business. The Sub-Use Permit, which shall be in a form deemed acceptable by the City Attorney, shall be issued by the Zoning Administrator if he finds the application to be in conformity with all requirements of this Ordinance [.]In addition, in sub-paragraph 6, the ordinance contained the following explanatory language:
The use of the otherwise undefined term "Sub-Use Permit" as contained in this Ordinance is to distinguish for enforcement convenience a permit issued for specific ABC licensed premises as a result of and deriving from the existence of the General Use Permit for the entire Waterside premises.(Plaintiff's Exhibit 1)
In essence, Parcel R-1 embodied the specific outline of the Waterside building as originally constructed. (Defendants' Exhibit 1) Several years later the City and Norfolk Redevelopment and Housing Authority re-subdivided several parcels of land along the Elizabeth River waterfront, located at and in the immediate vicinity of Waterside. (Defendants' Exhibit 1) That re-subdivision combined Parcels R-1, R-2 and the City of Norfolk Pump Station Site and vacated each of those parcels' property lines to form Parcel R-1-A. The re-subdivision anticipated a large expansion of the original Waterside, sometimes referred to as "Waterside II". (See, Defendants' Exhibits 11 and 12) Following that addition's construction, tenants commenced operations within it during 1990. (Henn testimony, page 150)
The City enacted a new comprehensive zoning ordinance on March 3, 1992, pursuant to Ordinance Number 36,745, (hereinafter "the 1992 Zoning Ordinance"). (Plaintiff's Exhibit 23) The 1992 Zoning Ordinance specifically repealed the 1968 Zoning Ordinance, however, in Section 3 thereof, it provided as follows:
That all zoning clearances, permits, site plan approvals and other such regulatory authorizations have been granted or duly applied for, on or prior to the effective date of this Ordinance shall, at the option of the grantor or applicant, be governed by the substantive provisions of the Zoning Ordinance of 1968, provided, however, that all actions pertaining to the administration, enforcement, or procedural aspects of zoning regulations shall be governed by the terms of the Zoning Ordinance of 1992.
Pursuant to the enabling provisions of Virginia Code Section 15.2-2307, the 1992 Zoning Ordinance also provided for the protection of vested rights. In relevant part, Section 1-4.11 thereof stated, "To avoid undue hardship, nothing in this ordinance shall be deemed to require a change in the plans, construction or designated use of any building on which actual construction was lawfully begun prior to effective date of adoption or amendment of this ordinance and upon which actual building construction has been carried on diligently [.]"
This newly enacted zoning ordinance placed Waterside in the Downtown Waterfront District D-1. That district included numerous permitted and special exception uses, the latter category signifying those uses allowed only upon Council granting a special exception. (See, Plaintiff's Exhibit 26)
In Section 2-3 thereof, containing the definition of numerous terms used within the ordinance, the 1992 Zoning Ordinance defined the term "special exception uses" as those, "permitted in particular Zone Districts only after careful review of their location, design, configuration and impacts to determine the desirability of their development on a given site and the applicability of specific conditions to mitigate potential impacts." It also included the following two provisions, among others, that applied special exception uses:
25-11 EFFECT OF APPROVAL OF SPECIAL EXCEPTION USE. The approval of a proposed special exception by the City Council shall not authorize the establishment of any use nor the development, construction, reconstruction, alteration or moving of any building or structure, but shall merely authorize the preparation, filing and processing of applications for any permits or approvals that
may be required by the regulations of the City, including, but not limited, a Zoning Certificate, a building permit, a certificate of occupancy, subdivision approval and site plan approval.
A special exception use shall be deemed to relate to, and be for the benefit of, the use and lot in question rather than the owner or operator of such use or lot.
25-12 AMENDMENTS TO SPECIAL EXCEPTION USES. A special exception may be amended, varied or altered only pursuant to the procedures and subject to the standards and limitations provided in this Chapter for its original approval.
On May 9, 2006, pursuant to authority granted to it by Virginia Code Section 15.2-2286(A)(3), in Ordinance Number 42,260, Section 57 (Exhibit LLL), the city amended Section 25-11 of the 1992 Zoning Ordinance, and specifically the final sentence thereof, to read as follows: "A special exception use shall be deemed to relate to, and be for the benefit of, the use and lot in question rather than the owner or operator of such use or lot, except where the sale of alcoholic beverages is permitted, in which case the use shall be deemed to relate to the owner, manager, operator, and specific premises, as provided by Section 15.2-2286 of the Code of Virginia, as amended."
In addition, that ordinance specifically reserved to Council the authority to approve or disapprove special exceptions. (See, Section 18-2.1 of the 1992 Zoning Ordinance) Its Chapter 25 pertains to special exceptions, and includes the relatively complex and elaborate procedures for initiating an application and obtaining from Council an ordinance granting a special exception. (See, Sections 25-4 through 25-7 of the 1992 Zoning Ordinance)
On August 26, 1997, Council enacted Ordinance Number 38,880, which defined a number of specific land uses, including those of "Eating Establishment", "Eating and Drinking Establishment", "Entertainment", and "Entertainment Establishment".
The definitions of those respective land uses read as follows:
Eating Establishment. A business establishment whose function is the preparation and selling of unpackaged food to the customer in a ready to consume state, and where the customer consumes these foods while seated at tables or counters primarily located within a building. There shall be no sale of alcoholic beverages.
Eating and Drinking Establishment. An eating establishment also having as a function the sale of beer, wine and/or mixed beverages for consumption on the premises and requiring a retail on-premises license from the Virginia Alcoholic Beverage Control Commission. Such establishment shall not provide entertainment, but may have as an accessory function live performances with only one non-electronic musical instrument and/or recorded background music and a dance floor not to exceed 10% of the seating area of the establishment.
Entertainment. "Entertainment" shall include, but not be limited to live entertainment (including music performances by more than one instrument and/or amplified music, including amplified recorded sound and electronic musical instruments), dancing, go-go dancing, and stage performances.
Entertainment Establishment. An establishment where entertainment is provided or having a dance floor which occupies more than 10% of the seating area of the establishment. This shall not include commercial reaction (sic) restaurants or commercial indoor recreation centers.
The ordinance, through its numerous attached exhibits, not only defined these specific land uses, but also placed both Eating and Drinking Establishments and Entertainment Establishments within the highly regulated category of Adult Uses and permitted them in each of Norfolk's Downtown Districts, including the D-1 District, as special exception uses. (See, Plaintiff's Exhibit 24) Section 25-10.1, inter alia, in part states as follows with respect to the City's regulatory intent regarding adult uses: "Within the City, it is recognized that there are some uses which, because of their very nature, are recognized as having serious objectionable operational characteristics . . . Special regulation of these uses is necessary to ensure that these adverse affects will not contribute to the blighting or downgrading of the surrounding neighborhood . . . The primary control or regulation is for the purpose of preventing the concentration or location of these uses in a manner that would create such adverse affects."
Thus, the Court finds that as of August 26, 1997, the City made clear that no business entity could operate as an Entertainment Establishment in the D-1 District without first obtaining from Council a special exception entitling it to do so. From that date until the present time, the absence of an applicable special exception renders any such land use prima facia unlawful. (See, Section 23-4, et seq. of the 1992 Zoning Ordinance; Virginia Code Section 15.2-2209 and 15.2-2286(A)(1)(5))
Commencing in early 1998, City officials contacted and initiated negotiations with corporate representatives of Bar and Hand for the purpose of placing them into Waterside as entertainment establishments. (See, Henn testimony, pages 152 - 154;, Montgomery testimony, pages 581 - 585; Pedlow testimony, pages 633 - 635, 637, 639) During April or May 1998, Hand entered into a Lease Agreement with Waterside Associates Limited Partnership to lease space within Waterside. (Defendants' Exhibit 16) During the time frame of November 1998 through January 1999, Bar also entered into a very similar Lease Agreement to lease space within Waterside. (Defendants' Exhibit 17) Each lease, in Article 1 thereof, described the specific spaces to be leased within Waterside and referred to a Schedule A-1, which provided a legal description of what each lease denoted as "The Waterside Area":
On April 30, 2002, the original corporate entities owning Bar and Hand assigned these leases to the current corporate owners of these businesses. (See, Defendants' Exhibits 16 and 17)
ALL THAT CERTAIN PROPERTY known as the Parcel R-1-A as shown on that certain plat entitled "Resubdivision of Parcels R-1 and R-2 and City of Norfolk Pump Station Site, Plat of The Waterside, Property of Norfolk Redevelopment & Housing Authority" dated August 4, 1989, and recorded in the Clerk's Office of the Circuit Court of the City of Norfolk, Virginia in Map Book 45 at pages 1, 2, 3 and 1, 2, 3-A.(See, Defendants' Exhibits 16 and 17; see also, Defendants' Exhibit 1)
On June 25, 1998, Hand received from the City a Cash Receipt bearing the signatures of a Hand representative and the City's former zoning administrator, which purported to be a "Zoning Clearance for Business License". (Plaintiff's Exhibit 27) Bar received a substantially identical receipt on March 1, 1999, although no one signed it as applicant. (Plaintiff's Exhibit 28) Each of the receipts indicated that the applicants were new businesses, in the license category of "Eating Place", a land use designation not found anywhere in the 1992 Zoning Ordinance. Neither receipt stated anything about operation of these facilities as "Entertainment Establishments", or made any reference to sale of on-premises alcoholic beverages. Both Bar and Hand contend that these documents constitute the sub-use permits granted to each business entity as provided for in the 1983 Ordinance. It appears to the Court that they were intended to serve as such sub-use permits. Upon receiving these documents, each business commenced to operate as an entertainment establishment in Waterside, providing entertainment and, upon obtaining their ABC licenses, serving on-premises alcoholic beverages to their patrons. (See, testimony of Newcomb, Montgomery, Szabo and Pedlow)
The City's current zoning administrator, Leonard M. Newcomb, III, initially testified on August 25, 2009, to his belief that Bar's and Hand's operations in serving alcoholic beverages to their customers were covered by the 1983 Ordinance. (Plaintiffs' Exhibit 26, excerpt of Newcomb's August 25, 2009 testimony, pages 98, 119) However, in his September 1, 2010 letter to counsel for Bar and Hand, and in his June 13, 2011 testimony at the trial of these cases, Newcomb no longer espouses that view, and, in fact, contends that both Bar and Hand commenced operations to provide entertainment and serve alcohol without the benefit of coverage under the use permit provisions of the 1983 Ordinance or any special exception granted pursuant to the 1992 Zoning Ordinance. (See, Plaintiffs' Exhibit 26, and Newcomb testimony, pages 163 - 168, 170 - 177, 201, 203, 208 - 209)
Notwithstanding these various positions with respect to the 1983 Ordinance's applicability to the initial business operations of Bar and Hand, upon a thorough review the record of these cases, the Court finds that the City's zoning administrator did not issue any written order or other finding or determination proximate to the time Bar and Hand began operations at Waterside that specifically addressed their status as entertainment establishments or the activities associated that land use. Moreover, although Bar and Hand received in 1998 and 1999 various other documents and permits from the City that enabled them to plan for their operations, build-out their leased spaces, occupy those spaces, obtain on-premises ABC licenses and otherwise commence business, they produce no such order or determination from any other administrative officer of the City. The record thus contains no official promulgation from that time that addressed their operations vis-a-vis coverage under the 1983 Ordinance or other topic specific to the legality of their providing entertainment and serving alcoholic beverages at Waterside. Indeed, the only documents entered into this record provide zoning clearance for new businesses of a license category inapposite to providing entertainment or serving alcoholic beverages. (Plaintiffs' Exhibits 27 and 28)
Some issues presented in these cases relate to the actual location of Bar and Hand within Waterside. The parties' controversy focuses on whether any portion of Bar or Hand is located within the original Waterside facility, that is, the R-1 parcel described in the 1983 Ordinance and discernable from Defendant's Exhibit 1. Based upon its review of that exhibit, along with Defendant's Exhibits 2, 3, 4, 16 and 17, the Court finds that none of Bar is located within the original R-1 parcel. Instead, the entirety of Bar lies outside of that parcel, in the portion of Waterside that was constructed later and referred to Waterside II. As to Hand, the Court finds that a portion of that facility lies within the R-1 parcel, which floor space constitutes approximately one-eighth to one-sixth of Hand's facility. Hand's space within the R-1 parcel, according to the floor plan provided within Defendant's Exhibit 4, consists of a kitchen, walk-in cooler, dishwashing and bathroom facilities not open to the public, as well as a buffet area, a bar from which to serve alcoholic beverages, stools and at least 3 small tables for patron use. (Golbitz testimony, pages 542-543; Defendant's Exhibit 4, Floor Plan Illustration for Have a Nice Day Café) The remaining Hand floor space exists within the Waterside II addition.
Months after Bar and Hand opened in Waterside, on May 11, 1999, Council enacted Ordinance Number 39,579 (hereinafter the "1999 Ordinance") (Plaintiffs' Exhibit 2) That ordinance granted an adult use special exception, "authorizing the operation of an Entertainment Establishment on property located 333 Waterside Drive." The ordinance included a legal description of the property for which it granted the blanket special exception, encompassing the entirety of Waterside, i.e., both the original building and the later-constructed addition:
Property fronting 600 feet, more or less, along the southern line of Waterside Drive, beginning at the intersection of Waterside Drive and the southern prolongation of the eastern line of Martin's Lane and running eastwardly, premises now numbered 333 Waterside Drive.(See, Defendant's Exhibits 1-4, 16, 17) The ordinance did not mention the 1983 Ordinance and did not, by its terms or within its title, purport to amend, alter, repeal or supercede any other ordinance. Nevertheless, as will be more fully discussed below, the City contends that ordinance superceded the 1983 Ordinance, and, in effect, fully and completely replaced it with respect to permitting entertainment and serving on-premises alcoholic beverages at Waterside.
Among other terms, the 1999 Ordinance contained limitations upon the use with respect to hours of operation, applied its terms to the "entire gross leaseable area of the facility known as The Waterside", specifically authorized entertainment such as "dancing and live musical performances", and provided as follows in Section 2, sub-parts (d) and (e) respecting alcoholic beverages:
(d) any requirements, limitations or restrictions imposed on the Virginia ABC Commission or by any provision of Virginia law upon eating and drinking establishments which are more stringent than the requirements of this special exception shall be effective and binding.
(e) any violation of such limitation, requirement or restriction imposed by the ABC Commission shall be deemed a violation of the special exception. The special exception may be revoked for any violation of a general or specific condition, including a condition incorporated by reference and including a condition arising from limitations, requirements or restrictions imposed by the ABC Commission or by State law. A revocation proceeding brought to enforce this ordinance will apply only to tenants/operators of businesses actually in violation of the applicable restrictions unless the notice proposed revocation expressly states that it applies to the entire Waterside facility.
The 1999 Ordinance's special exception applied to both Bar and Hand. However, the parties contest herein whether the land use defined as an "Entertainment Establishment" provides for not only the provision of entertainment to patrons but also the serving of on-premises alcoholic beverages. Bar and Hand point to the 1992 Zoning Ordinance's definition of Entertainment Establishment, which language contains no reference to alcoholic beverages. (Plaintiffs' Exhibit 24) In addition, they note the content of Ordinance Number 43,751, enacted by Council on March 2, 2010, months after this litigation commenced, that amended Section 2-3 of the 1992 Zoning Ordinance regarding entertainment establishments:
Entertainment establishment. An establishment where entertainment is provided or having a dance floor which occupies more than (10%) of the seating area of the establishment. Alcoholic beverages may be provided to patrons of the establishment unless specifically prohibited by the terms of the special exception or other applicable provision of law. For purposes of zoning, "entertainment establishment" shall not include commercial recreation restaurants or commercial indoor recreation centers.As part and parcel of their vested rights arguments, including their contention that the serving of alcoholic beverages to their patrons is governed by the terms of the 1983 Ordinance, Bar and Hand assert that the Court must herein apply the definition of Entertainment Establishment as it existed prior to the 2010 amendment and that conforms to the explicit language thereof. See, Higgs v. Kirkbride, 258 Va. 567, 573, 522 S.E.2d 861, 864 (1999); Donovan v. Board of Zoning Appeals, 251 Va. 271, 274, 467 S.E.2d 808, 810 (1996); and see, Board of Zoning Appeals v. 852 LLC, 257 Va. 485, 489, 514 S.E.2d 767, 770 (I999).
For example, in Donovan, the Court reviewed a decision of the Rockingham County Board of Zoning Appeals affirming the zoning administrator's interpretation and application of a zoning ordinance as to whether the landowner had lost of the benefit of the right to continue a non-conforming land use. Id ., 251 Va. 272, 467 S.E.2d 809. In a legal discussion relevant to the dispute in these cases, the Court stated:
The principles relevant to the construction of a zoning ordinance are well established. The words of the ordinance are to be given their plain and natural meaning. McClung v. County of Henrico, 200 Va. 870, 875, 108 S.E.2d 513, 516 (1959). The purpose and intent of the ordinance should be considered but the ordinance should not be extended by interpretation or construction beyond its intended purpose. Gough v. Shaner, 197 Va. 572, 575, 19 S.E.2d 171, 174 (1955). In reviewing a decision of the BZA, we give "great weight" to the interpretation of the ordinance by those officials charged with its administration, and we will reverse the decision only if it is plainly wrong or based on erroneous legal principles. Kirk v. Board of Zoning Appeals of the City of Falls Church, 244 Va. 107, 111, 418 S.E.2d 879, 881 (1992); Masterson v. Board of Zoning Appeals of the City of Virginia Beach, 233 Va. 37, 44, 353 S.E.2d 727, 732-33 (1987).
The City argues to the contrary, taking the position that since August 26, 1997, the date on which Council enacted Ordinance Number 38,880 and first defined the term "Entertainment Establishment", the zoning administrator and other senior city officials consistently have interpreted that term to the effect that an Entertainment Establishment adult use special exception anticipates both the provision of entertainment and the serving of on-premises alcoholic beverages to patrons. (See, Newcomb testimony, pages 170-172, 177-180, 182, 238-239; and Duke testimony, pages 459-460, 462) It further argues that the original definitional language did not prohibit alcohol sales, that since 1997 many special exceptions for entertainment establishments (including the 1999 Ordinance) routinely have specified regulatory limitations of and conditions upon alcohol sales, and relies upon trial testimony that explained the 2010 amendments to the Entertainment Establishment definition as completely unrelated to the issues of this litigation. Specifically, that testimony asserted that the amendments were to provide flexibility to grant special exceptions for entertainment establishments that would not intend to serve alcohol to their patrons. (See, Newcomb testimony, pages 178-180, 182, 234-239; Williams testimony, pages 405-406, 409-410; and Duke testimony, pages 457-463)
The Court finds that from the time Council enacted Ordinance Number 38,880, the definition of Entertainment Establishment included an intent to permit, yet regulate, the serving of alcoholic beverages to patrons upon the facility's attaining ABC licensure to do so. This conclusion results from consideration of the testimony and exhibits presented in this case, giving due regard to the plain and natural meaning of the ordinance's wording, the purpose and intent of the ordinance with respect to the involved adult uses, and the longstanding and consistent position taken by the zoning administrator and other city officials with respect to the disputed definitional language. The Court further holds that Council's 2010 amendments to the definition of Entertainment Establishment did not change that term's pre-2010 meaning as to regulating alcoholic beverages sales to patrons of such establishments. See generally, Horner v. Dept. of Mental Health, Mental Retardation and Substance Abuse Services, 268 Va. 187, 193, 597 S.E.2d 202, 206 (2004) (discussing the methodology of court interpretation of legislative changes to existing laws).
For over ten years, Bar and Hand operated as entertainment establishments at Waterside. The original corporate owners incurred substantial initial investment costs of several hundred thousand dollars. Each facility enjoyed marked success, becoming popular nightspots in downtown Norfolk and producing substantial revenues. As the decade advanced, Waterside aged and the nightclubs' owners' excellent relationship with Waterside's owners and the City began to erode. As of approximately 2007, perceiving neither a coherent municipal vision for Waterside's future nor a present willingness to invest substantial public funds in it, and having suffered financial reversals in efforts to open new businesses within Waterside, Bar's and Hand's corporate owners decided to refrain from making additional investment in either facility. Although each business continued to enjoy popularity and profitability, the tenor of their operations, including as to local public safety codes and other law enforcement efforts, deteriorated in a number of ways. (See, Pedlow testimony, pages 641-643, 648-650, 656-661, 663-668, 670-674; see also, Hall, Barnes, Golbitz, Melita, and Szabo testimony)
During the course of their operations, along with those of many other entertainment establishments, the City's Bar Task Force monitored Bar's and Hand's activities. The Bar Task Force consisted of an amalgam of codes enforcement personnel operating under the auspices of Norfolk's City Manager, chaired by a designated member of the City Attorney's Office staff, and working in conjunction with ABC enforcement officials. (See, Hall, Barnes, Williams, Golbitz and Szabo testimony; Defendant's Exhibit 15, Insley testimony, pages 16-17) At trial, the City produced testimony and supporting exhibits establishing that Bar and Hand each suffered at least one ABC license suspension during their tenure at Waterside and Bar Task Force members cited them for or otherwise documented numerous code violations in the 2002 - 2009 period; however, each facility normally corrected all cited code violations within a short time. (See, Hall testimony, pages 74-80; Barnes testimony, pages 83-123; Golbitz testimony, pages 524-526; Szabo testimony, pages 601-603, 607; Pedlow testimony, 669-674; and see, Plaintiffs' Exhibits 4-7, 11-22, 29; Defendant's Exhibit 7-9)
By April 2009, as a result of a myriad of concerns with Waterside, the City determined to repeal the blanket special exception of the 1999 Ordinance and require each Waterside tenant to seek an individual special exception to conduct adult uses at their location. (Defendant's Exhibits 9 and 10) On behalf of the City, Mr. Melita sent an April 21, 2009 letter to Waterside's leasing agent, with a copy to representatives of Bar and Hand and other Waterside tenants, that explained the City's new regulatory approach. (Defendant's Exhibit 10) The letter established a May 29, 2009 deadline for individual special exception applications, and stated as follows:
The Planning Department staff is aware of the situation and will be available to work with you - and each of your tenants - in order to expedite the application process so that it can timely be done. In order to ensure that an application is complete, we strongly recommend that you arrange a pre-application conference
with the Planning Department as soon as possible. Please contact Susan Pollock (664-4765) to schedule that meeting.
Bar and Hand representatives thereafter timely contacted appropriate City officials, compiled the requisite materials to apply for special exceptions to operate as entertainment establishments (with on-premises alcoholic beverage sales) and submitted their applications on May 28, 2009. (See, Defendant's Exhibits 3 and 4; and see, Defendant's Exhibit 15, Insley testimony, pages 6-7; Szabo testimony, pages 608-609; Pedlow testimony, pages 677, 679-681, 704-705) City officials received the applications and in June 2009 the City's Planning Commission considered and favorably recommended them to Council.
The City Manager's Office placed all of the Waterside tenants' special exception applications on Council's docket for Tuesday, August 18, 2009. However, as of Friday, August 14, 2009, the former City Manager decided to effectively oppose Bar's and Hand's applications, in part, by recommending that Council grant the applications only with somewhat attenuated hours for entertainment and disallowing on-premises alcohol sales at each facility. (Defendant's Exhibits 3 and 4; and see, Williams testimony, pages 360-370; Duke testimony, pages 422-439) Alternatively, the City Manager recommended that Council deny altogether Bar's and Hand's special exception applications. (Williams testimony, pages 410-411, 412) The City Manager based her decisions on the nightclubs' ABC licensure history and the Bar Task Force's citations to and historical observations at each facility. (Defendant's Exhibits 3 and 4; Williams testimony, pages 345-349, 351-353, 355, 362, 375, 378, 388, 415-416)
Bar's and Hand's management learned of the opposition to their special exception applications by Monday, August 17th. Surprised and greatly dismayed, and with their regularly retained attorney out of town on vacation, corporate personnel undertook to hire another local attorney, Kevin E. Martingayle, Esquire, and hurriedly organized an effort to alternatively seek a delay of Council action on their special exception applications or to advocate in favor of them. (Szabo testimony, pages 609-613, 623; Pedlow testimony, pages 683; and see, Defendant's Exhibit 15, Insley testimony, pages 8-12; and see, Duke testimony, page 450-451) At mid-day on Tuesday, August 18, 2009, Council met and conducted both an informal and a formal session. The Council agenda included several items regarding special exceptions at Waterside, including consideration of Bar's and Hand's special exception applications. (Defendant's Exhibits 5A, 5B and 6) Agenda Item R-19 scheduled Council's consideration of Ordinance Number 43,554, which Council enacted, granting a general special exception to operate an entertainment establishment within the common areas of Waterside. (Defendant's Exhibits 5B, 6 and 14; Plaintiffs' Exhibit 9) However, an add-on to the agenda, designated as Item R-19A, scheduled Council to consider Ordinance Number 43,555. (Defendant's Exhibit 6; Plaintiffs' Exhibit 3) Council also enacted that ordinance, which included the following language:
WHEREAS, the City of Norfolk has received complaints concerning the operation of the establishment on property located at 333 Waterside Drive as "Waterside"; and
WHEREAS, the appropriate City and State investigators and officers have investigated the complaints and have carefully reviewed the operations of said establishment; and
WHEREAS, the City Council has received evidence of one or more of the conditions made part of the special exception granted by Ordinance No. 39,579, adopted May 11, 1999, have been violated; now therefore
BE IT ORDAINED by the Council of the City of Norfolk:
Section 1: - That the Special Exception heretofore granted by Ordinance No. 39,579 is revoked, effective immediately.(Plaintiffs' Exhibit 3) That is, Council revoked the terms of the 1999 Ordinance by which it had granted the blanket special exception for the operation of an entertainment establishment at Waterside.
Section 2: - That this Ordinance shall be in effect from the date of its adoption.
Council did not delay its consideration of Bar's and Hand's individual special exception applications; indeed, it denied them both. (Defendant's Exhibit 14, Agenda Items R-23, R-23A, R-24 and R-24A) Counsel for Bar and Hand, Mr. Martingayle, spoke at Council's formal session and addressed not only Bar's and Hand's special exception applications, but also Council's consideration of the ordinance to revoke the 1999 Ordinance's special exception. At least one corporate representative, Frank Szabo, also addressed Council at its formal session. (Plaintiffs' Exhibits 8, 8A; Szabo testimony, page 623)
As part of their declaratory relief claim, Bar and Hand argue that the City acted deficiently in giving public notice of the August 18th Council agenda, and especially so as to add-on Agenda Item R-19A, and thereby violated the mandatory notice provisions of Virginia Code §15.2-2204(A). However, the Court must deny that claim. Virginia Code §15.2-2204(B) provides as follows:
A party's actual notice of, or active participation in, the proceedings for which the written notice provided by this section is required shall waive the right of that party to challenge the validity of the proceeding due to failure of the party to receive the written notice required by this section.Bar and Hand do not deny either actual notice of or active participation in Council's consideration of any item relevant to their interests on its August 18th agenda. Thus, the above-quoted statutory language necessarily disposes of their statutory notice-based claims for relief.
In the aftermath of Council's August 18th actions, the City took the position that Bar and Hand lacked legal authority to provide entertainment or serve alcoholic beverages at Waterside. From Bar's and Hand's corporate perspectives, unless they were "grandfathered" through applicability of the 1983 Ordinance to provide entertainment and serve alcoholic beverages to their patrons, Council's August 18th actions dealt an economic death blow to each facility. Robert Pedlow, a corporate principal of both of the corporate owners involved in this litigation testified as follows with respect to the decisions to open Hand on the evening of August 18th and Bar on the evening of August 19th:
Q: And was it your opinion that those decisions to open on the evenings of August 18th and 19th, 2009 were consistent with your stated approach of trying to be respectful and working to the highest levels possible maintaining the standing of those establishments in the City?(Pedlow testimony, pages 696-697)
A: As I explained previously, there was -- let's put it in perspective. There's a balancing act there. Either you believe you're grandfathered and you don't open and you're done because they're not coming back to life -- the businesses are not coming back or you believe you're grandfathered and you have to open to keep the employees working and to keep the businesses alive and hopefully continue to work out the issues[.]
The record is replete with accounts of the events of the evenings of August 18 and 19, 2009. When Hand opened its doors on August 18th it provided entertainment and served alcoholic beverages to its patrons. Representatives of the City, including law enforcement officials and members of the Bar Task Force, as well as representatives of Waterside's ownership, entered the premises, expelled its customers and forcibly shut down and padlocked the facility. When Bar opened for business on the evening of August 19th, an identical result ensued by the same methods of intervention. Bar and Hand remain closed to this day. However, both Robert Pedlow and Ryan Golbitz testified that the nightclubs' corporate owners, upon a determination by this Court that it is lawful to do so, may well reopen each facility. (Pedlow testimony, pages 686-687, 702-703; Golbitz testimony, pages 540-541)
By letter dated September 1, 2010, Mr. Newcomb and Mr. Melita wrote to John F. Faber, Jr., Esquire, an attorney for Bar and Hand. The letter opened with the following words:
Enclosed you will find copies of the information you requested from the Department of Planning. Allow us to provide you with some additional information to assist your understanding and to include a determination of whether any vested rights to operate a lawful non-conforming use exists for either Have a Nice Day Café or Bar Norfolk.The letter went on to provide a succinct historical summary of Waterside's zoning, attached numerous exhibits and made determinations contrary to Bar's and Hand's assertions of vested rights to provide entertainment and serve alcoholic beverages at Waterside. The letter closed with the following substantive paragraph:
Please note that your clients are entitled to appeal these determinations of the Zoning Administrator. However, such appeal must be filed within 30 days and the determination shall be final and unappealable if not appealed within 30 days. The fee for any appeal is $100.00 and additional information, including forms for noting an appeal, are available in the Office of the Department of Planning located in the City Hall Building, Fifth Floor, Suite 508, 810 Union Street, Norfolk, Virginia 23510. This notice is provided to you in accordance with §15.2-2311(A) of the Code of Virginia.(Plaintiffs' Exhibit 26) Bar and Hand appealed the Zoning Administrator's determinations, the BZA duly considered the appeals during the course of a lengthy hearing and affirmed them.
On page 2 of the letter, the vested rights determinations appeared as follows:
Lastly, we provide to your client the following determinations of the Zoning Administrator, including a determination of vested rights pursuant to §15.2-2286(A) and (4)(iii) of the Code of Virginia:
The Board of Zoning Appeals of the City of Norfolk (hereinafter "the BZA") reviewed these determinations at its November 17, 2010 meeting.(a) The 1983 special exception (Ordinance Number 32,160), never applied to the property upon which either Have a Nice Day Café or Bar Norfolk operated because each of those rented spaces were located in the expanded portion of Waterside that was located outside the boundaries of the property described in the 1983 special exception;
(b) The 1999 special exception (Ordinance Number 39,579) replaced and superceded the 1983 special exception that had applied to the original portion of the Waterside; and
(c) Neither Have a Nice Day Café nor Bar Norfolk have any vested right to operate as a lawful non-conforming use in spaces each rented within Waterside because neither of them were lawfully operating in accordance with the applicable regulations of the zoning ordinance at any time prior to May 11, 1999. On that date, both business became lawful, conforming Entertainment Establishments and remained conforming uses until August 18, 2009, when the special exception required by the regulations of the D-1 Zoning District in which they were located was revoked.
The BZA considered Bar's and Hand's respective appeals in a combined proceeding on November 17, 2010. The record of those proceedings are contained in this Court's civil action files CL10-8338 and CL10-8346,
In addition to seeking certiorari from and reversal of the BZA's decisions to uphold the zoning administrator's vested rights determinations, Bar and Hand contend that Mr. Newcomb lacked authority to issue these determinations. In effect, Bar and Hand contend that the issue of their vested rights at Waterside already was the subject of pending litigation at the time the zoning administrator acted, and, in addition, his issuance of the determinations appears to be entirely self-initiated.
Initially, the Court, on this record, does not find evidence to support an assertion that Mr. Newcomb intentionally sought to thwart this Court's consideration of the vested rights issues as raised in the suits that followed the shut-down of Bar's and Hand's operations. Nor has the Court encountered any problems in consolidating these four separate cases, culling out the legal issues involved in them, and, now, in resolving their respective factual and legal issues. In fact, in at least one case cited by Bar and Hand, the Supreme Court resolved land use issues arising from separate, but related, equity and law cases respecting the same property, including review of a BZA decision. See, Patton v. City of Galax, 269 Va. 219, 609 S.E.2d 41 (2005).
See this Court's civil action files CL09-5362 and CL09-5401.
On the issue of statutory authority, the Court first turns to the enabling provisions of Virginia Code §15.2-2286(4). In relevant part, that statute reads as follows:
For the administration and enforcement of the ordinance including the appointment or designation of a zoning administrator who may also hold another office in the locality. The zoning administrator shall have all necessary authority on behalf of the governing body to administer and enforce the zoning ordinance. His authority shall include . . . (iii) in specific cases, making findings of fact, and, with concurrence of the attorney for the governing body, conclusions of law regarding determinations of rights accruing under §15.2-2307 or subsection (C) of §15.2-2311.
In addition, the 1992 Zoning Ordinance, at Section 18-6.4, provides for a zoning administrator. Chapter 20 of that ordinance addresses interpretations of its terms, and, at Section 20-1 thereof, makes the following purpose statement:
The interpretation authority established by this chapter is intended to recognize that the provisions of this ordinance, though detailed and extensive, cannot, as a practical matter, address every specific situation to which they may have to be applied. Many such situations, however, can be readily addressed by an interpretation of the specific provisions of this ordinance in light of the general and specific purposes for which those provisions have been enacted. Because the interpretation authority is an administrative rather than a legislative authority, it is not intended to add to or change the essential content of this ordinance, but rather it is intended only allow authoritative application of that content to specific cases.Section 20-2 provides that the zoning administrator, "subject to the procedures, standards and limitations of this chapter, may render interpretations, including use interpretations, of the provisions of this ordinance[.]" Other sections of the chapter relate to who may seek an interpretation of the zoning ordinance (Section 20-3), the procedures for such persons to follow (Section 20-4), and in Section 20-5, states that "the following standards shall govern the zoning administrator . . . in issuing use interpretations". In sub-section (f) thereof, it states, "No use interpretation shall permit the establishment of any use that would be inconsistent with the statement of purpose of the district in question". No language within Chapter 20 forbids the zoning administrator from self-initiating interpretations or determinations of the zoning ordinance's provisions.
Having examined the enabling legislation and the several specific sections of the 1992 Zoning Ordinance that relate to the zoning administrator's interpretative authority, the Court finds no conflict between the authority granted and Mr. Newcomb's and Mr. Melita's making of vested rights determinations in their September 1, 2010 letter to Mr. Faber. Clearly, no evidence exists upon which to conclude that Mr. Faber somehow solicited the determinations pursuant to the applicable terms of the 1992 Zoning Ordinance. Instead, it appears that Mr. Newcomb decided for himself that he would issue these determinations which, in part, conflicted with portions of his August 25, 2009 testimony during the preliminary injunctive proceedings of this litigation. Upon its consideration of the issue, the Court rules that Mr. Newcomb acted within the scope of his lawful authority in making the contested vested rights determinations.
LEGAL DETERMINATIONS REGARDING
THE 1983 ORDINANCE, THE 1999 ORDINANCE
AND VESTED RIGHT CLAIMS PURSUANT TO
VIRIGNIA CODE §§15-2-2307 AND 15.2-2311(C)
Bar and Hand contend that they possess vested rights to provide entertainment and serve alcoholic beverages to their patrons at Waterside pursuant to the terms and applicability of the 1983 Ordinance and under the provisions of Virginia Code §§15.2-2307 and 15.2-2311(C). The Court now will proceed to examine these claims.
As noted above, at all times relevant to this case, no entity could lawfully provide entertainment or serve on-premises alcoholic beverages to patrons at Waterside unless permitted to do so pursuant to a Council-granted special exception. Both entertainment and alcoholic beverage sales constitute highly regulated adult uses within the D-1 Zoning District, and among other expressed legislative intentions, Council intended to scrutinize, limit and place conditions upon the dispersion and conduct of such operations. Council reserved unto itself, as a legislative function, the authority to enact or decline to enact ordinances that grant special exceptions to conduct adult uses within the D-1 Zoning District, including those respecting entertainment establishments.
Moreover, the City's zoning administrator statutorily may exercise only administrative functions, and may not purport to act legislatively in Council's stead with respect to the granting of a special exception. See generally, Goyonaga v. Board of Zoning Appeals, 275 Va. 232, 244, 657 S.E.2d 153, 159-160 (2008); Board of Supervisors v. Crucible, Inc., 278 Va. 152, 161, 677 S.E.2d 283, 288 (2009). Nor may a zoning administrator ordinarily misinterpret a zoning ordinance so as to allow an otherwise unlawful land use. See, Segaloff v. City of Newport News, 209 Va. 259, 262, 163 S.E.2d 135, 137 (1968).
The City argues cogently that the 1999 Ordinance intended to, and did supercede the 1983 Ordinance, and especially so in light of the Court's conclusion that the definition of Entertainment Establishment encompassed both entertainment and serving of alcoholic beverages. See generally, City of South Norfolk v. City of Norfolk, 190 Va. 591, 601-602, 58 S.E.2d 32, 36-37 (1950) (wherein the Court discusses the legal principles applied to determine whether one legislative act repeals by implication or otherwise supercedes an earlier enactment). Indeed, the 1999 Ordinance includes the entirety of the Waterside facility, and the 1983 Ordinance by its terms, covers only such territory as embodies the original Waterside building. Thus, seemingly, the 1999 Ordinance supplanted the 1983 Ordinance in both geographic and regulatory domains.
Bar and Hand argue that through the 1989 resubdivision of the land on which Waterside is situate, or otherwise by operation of law, the City expanded the geographic territory of the general use permit provided for in the 1983 Ordinance. Specifically, they contend that its coverage was extended to the entirety of the Waterside facility, from its original structure into the later Waterside II addition. The Court rejects this argument. No evidence exists to support it. Moreover, Bar and Hand point to no provision of either the 1968 Zoning Ordinance or the 1992 Zoning Ordinance that would permit an expansion of a use permit or special exception without specific Council action to do so. See, e.g., Section 25-12 of the 1992 Zoning Ordinance, quoted above, that specifies the formality by which a special exception may be "amended, varied or altered". C.f.., Patton v. City of Galax, 269 Va. 219, 228, 609 S.E.2d 41, 45 (2005) (wherein the Court, in the context of non-conforming uses, indicated that a local government may expressly restrict the manner in which such use might be extended or expanded from one portion of a building to another portion thereof.)
Nevertheless, the Court finds, as a matter of law, that the 1999 Ordinance did not supercede the 1983 Ordinance. The Court's conclusion stems directly from the controlling legislative language of Virginia Code §15.2-1426 regarding the form necessary for municipal ordinances. It reads as follows:
The Court acknowledges that it made a contrary finding on this specific point at the conclusion of the August 27, 2009 preliminary injunctive proceedings. However, as it noted to counsel prior to commencement of the June 2011 trial proceedings in these cases, the preliminary injunctive proceedings took place on an emergent basis and the record there established did not approximate the fullness of the factual and legal record produced in the many months following those proceedings. The Court now possesses a complete record and its finding on this issue results from its thorough and deliberative consideration thereof.
§15.2-1426. Form of Ordinances. - The object of every ordinance, except an ordinance approving a budget, an annual appropriation ordinance or an ordinance which codifies ordinances, shall be clearly expressed in its title. All ordinances which repeal or amend existing ordinances shall identify by title the section to be repealed or amended.
When Council enacted the 1999 Ordinance, it did not mention the 1983 Ordinance in its title or otherwise address that ordinance in its text. Nothing in the 1999 Ordinance would indicate any intention to repeal or amend the 1983 Ordinance, therefore, it did not do so. The City offers somewhat surgical arguments to the effect that in intending to supercede the 1983 Ordinance, the 1999 Ordinance did not technically "repeal" or "amend" it, thus it did not need to mention it in its title or text. The Court finds this argument unpersuasive. Indeed, to adopt it would subvert the purpose of Virginia Code §15.2-3426, that municipal ordinances be clear with respect to their intended objects, and particularly so when they intend to affect another ordinance's vitality or scope. The Court cannot here accept the City's invitation; the statute's requirements are mandatory. C .f., Mitchell v. County of Hanover, 1 Va. App. 486, 488, 340 S.E.2nd 173, 174-175 (1986) (wherein the Court briefly acknowledged the mandatory nature of Virginia Code §15.1-504, the previous codification of what is now Virginia Code §15.2-1426). Indeed, for one legislative act to supercede another, it effectively repeals the earlier legislation. See, Black's Law Dictionary, Supercede (4th Edition Rev. 1968).
The record contains no evidence that Council ever repealed or amended the 1983 Ordinance, and the Court concludes that the general use permit granted by it remains in effect. See, Virginia Code §15.2-1427(D). By contrast, the 1999 Ordinance's terms applied to Waterside from the date of its adoption, May 11, 1999, until the date and time that Council acted on August 18, 2009 to revoke the special exception granted by it. (Plaintiffs' Exhibits 2 and 3) See, Virginia Code §15.2-1427(A).
The Court therefore must reconcile the interrelationship of the 1983 Ordinance, which granted a general use permit for the sale of on-premises alcoholic beverages within the confines of Waterside's original R-1 parcel, and the 1999 Ordinance's blanket special exception for entertainment and on-premises alcohol sales throughout the entirety of Waterside. First, as to Bar, with no portion thereof situate within the original R-1 parcel, the general use permit of the 1983 Ordinance has no applicability. With respect to Hand, as noted above, a very small portion of its floor space lies within the R-1 parcel. Thus, still possessing its original sub-use permit, Hand's corporate owner-operator continues to enjoy the benefit of the 1983 Ordinance's use permit to sell alcoholic beverages within this limited area.
However, even though this holding provides Hand with some measure of favorable declaratory relief, and necessarily implies that the BZA did not reach an entirely correct set of conclusions, it does not entitle Hand to injunctive relief against the City. First, providing entertainment constitutes the core of Hand's business enterprise. Without benefit of a special exception permitting it, and lacking a vested right to do so, as further discussed below, such a limited entitlement to serve alcohol does not genuinely forward Hand's interests. Second, the same reasoning holds true for Hand's inability to serve alcohol in any other portion of its leased space; (also, Hand currently does not possess an ABC license). Third, Hand's request for injunctive relief encompasses the entirety of its facility; it does not seek an injunctive remedy of such marginal effect. And finally, the combined effect of these factors convinces the Court that the City's deprivation of Hand's residual entitlement under the 1983 Ordinance fails to rise to the level of irreparable harm, a necessary prerequisite to common law injunctive relief.
Hand's prayers for injunctive relief state: (1) "[T]he Restaurants respectfully request that this Honorable Court enter an order granting . . . permanent relief requiring that the City of Norfolk case and desist from interfering in any manner with the operation of the Restaurants[.]" Answer, Counterclaim and Third-Party Complaint, Page 8, [Civil Action No. CL09-5362]; and (2) "Entry of an Order granting injunctive relief preventing and restraining the Norfolk City Council and any persons/entities under its control from interfering in any manner with operations of the Restaurant during the pendency of this appeal and related litigation." Complaint and Petition for Appeal, Page 5, subsection (A), [Civil Action No. C109-5401].
The Court next determines Bar's and Hand's vested rights claims under Virginia Code §15.2-2307. The Court finds that this statute herein provides no basis for a claim of vested rights. As stated in the Goyonaga decision:
In relevant part, that statute reads as follows:
Nothing in this article shall be construed to authorize the impairment of any vested right. Without limiting the time when rights might otherwise vest, a land owner's rights shall be deemed vested in land use and such vesting shall not be affected by a subsequent amendment to a zoning ordinance when the land owner (i) obtains or is the beneficiary of a significant governmental act which remains in effect allowing development of a specific project (ii) relies in good faith on the significant affirmative governmental act, and (iii) incurs extensive obligations or substantial expenses in diligent pursuit of the specific project in reliance on the significant affirmative governmental act.
For purposes of this action and without limitation, the following are deemed to be significant affirmative governmental acts allowing development of a specific project: ... (iii) the governing body or board of zoning appeals has granted a special exception or use permit with conditions; ... (vi) the governing body or its designated agent has approved a final subdivision plat, site plan or plan of development of the land owner's property; or (vii) the zoning administrator or other administrative officer has issued a written order, requirement, decision or determination regarding the permissibility of a specific use or density of the land owner's property that is no longer subject to appeal and no longer subject to change, modification or reversal under subsection C of §15.2-2311.
The clear intent of the statute is to provide a property owner with protection from a subsequent amendment to a zoning ordinance when the owner has already received approval for and made substantial efforts to undertake use of the property permitted under the prior version of the ordinance . . . . In short, Code §15.2-2307 provides for the vesting of a right to a permissible use of property against any future attempt to make the use impermissible by amendment of the zoning ordinance; it is not intended to permit, nor does it provide for, the vesting of a right to an impermissible use under the existing ordinance. [Emphasis in original].275 Va. at 243-244, 657 S.E.2d at 159.
Neither Bar nor Hand own Waterside, nor any portion of the land upon which it sits. However, for decisional purposes, the Court ignores these facts as a result of the language of Section 25-11 of the 1992 Zoning Ordinance, regarding special exceptions relating to alcoholic beverage sales. See, Virginia Code § 15.2-2286(A)(3).
Providing entertainment and serving alcoholic beverages to patrons in the D-1 district requires a special exception. No special exception exists to enable either facility to operate as an Entertainment Establishment at Waterside; (nor did one exist when they opened for business). Indeed, Council affirmatively revoked the special exception of the 1999 Ordinance. Moreover, subsection (vii) of Virginia Code §15.2-2307 does not apply to this litigation because the General Assembly enacted that subsection during its 2010 Session and such a substantive statutory provision, absent very clear language to the contrary, operates prospectively only. See, generally, Gloucester Realty Corp. v. Guthrie, 182 Va. 869, 872-874, 30 S.E.2d, 686, 687-688 (1944); Hughey v. Fairfax County Zoning Appeals Board, 41 Va. Cir. 138, 141 (Fairfax County Circuit Court 1996), citing, Virginia Farm Bureau Insurance Company v. Travelers Indemnity Company, 242 Va. 203, 208, 408 S.E.2d 898, 901 (1991). And finally, Bar and Hand simply have not carried their burden to establish the existence of "a significant affirmative governmental act" enabling them to claim entitlement to operate as entertainment establishments absent an applicable special exception. While a significant governmental act may take numerous forms, the Court finds that the gravamen of the statutory language requires something specific be done by a responsible municipal official that unambiguously permits a particular land use. See discussions, Board of Supervisors v. Crucible, 278 Va. 152, 158-160, 677 S.E.2d 283, 286-287 (2009); Board of Zoning Appeals v. CaseLin Systems, Inc., 256 Va. 206, 210-212, 501 S.E.2d, 397,400-401 (1998); Snow v. Amherst County Board of Zoning Appeals, 248 Va. 404, 406-407, 448 S.E.2d 606, 608 (1994). As noted above, neither the original Cash Receipt forms purporting to provide a zoning clearance for business licenses as Eating Places, nor any other municipal permit produced in this litigation provides such specificity or clarity. The fact that the City and its responsible officials acquiesced in Bar and Hand opening to the public as ABC-licensed entertainment establishments prior to the 1999 Ordinance's enactment likewise provides no basis for relief. Such acquiescence, whether accomplished by error, omission or otherwise, does not constitute an "affirmative act" for purposes of founding a vested rights claim under Virginia Code §15.2-2307.
Bar and Hand also appeal regarding the sufficiency of the factual basis upon which Council either did, or might properly have relied on August 18, 2009 to revoke the special exception of the 1999 Ordinance and reject their individual applications for special exceptions. The Court finds that Council's actions amply meet the "fairly debatable" standard and thus it denies these appeals. See, generally Town of Leesburg v. Giordano, 280 Va. 597, 605-606, 701 S.E.2d 783, 787-788 (2010); Board of Supervisors v. Robertson, 266 Va. 525, 532-534, 587 S.E.2d 570, 575-576 (2003). Council, in taking the challenged legislative actions, and based upon the record of its proceedings and the additional information provided at the trial of these cases, acted within its authority with respect to the purpose and intent of zoning provisions relating to the D-1 district and, more generally, to those of the 1992 Zoning Ordinance.
As an independent basis for relief, Bar and Hand also make vested rights claims under Virginia Code §15.2-2311(C). The statute, by its terms, applies to BZA appeals. In Goyoanga, the Court compared this provision with the terms of Virginia Code §15.2-2307, as follows:
That subsection reads as follows:
In no event shall a written order, requirement, decision or determination made by the zoning administrator or other administrative officer be subject to change, modification or reversal by any zoning administrator or other administrative officer after 60 days have elapsed from the date of the written order, requirement, decision or determination or the person aggrieved has materially changed his position in good faith reliance on the action of the zoning administrator or other administrative officer unless it is proven that such written order, requirement, decision or determination was obtained through malfeasance of the zoning administrator or other administrative officer or through fraud. The 60 day limitation period shall not apply in any case where with the concurrence of the attorney for the governing body, modification is required to correct clerical or other non-discretionary errors.
Code §15.2-2311(C), by way of contrast, does provide for the potential vesting of a right to use property in a manner "that otherwise not have been allowed." SnowFor the reasons discussed above, Bar and Hand cannot satisfy their burden. Again, to establish the existence of a vested right to conduct a land use that otherwise would be unlawful the proponent must produce an order, determination or other edict by the zoning administrator or other responsible municipal official that specifically addresses the land use in a way that will clearly create an entitlement to it. In this case, neither the zoning administrator nor any other official made such a specific pronouncement. And, as with the court's interpretation of Virginia Code §15.2-2307, the acquiescence of municipal officers in a particular land use does not fulfill the statutory requirement for the prerequisite municipal edict.
v. Amherst County Board of Zoning Appeals, 248 Va. 404, 407, 448 S.E.2d 606, 608 (1994) . . . the burden of establishing the vesting of a right to an otherwise impermissible use of property under Code §15.2-2311(C) falls upon the property owner. Snow, 248 Va. at 407, 448 S.E.2d at 608.
Thus, the Court concludes that Bar possesses no vested rights to provide entertainment or serve alcoholic beverages at Waterside. Hand likewise possesses no vested right to provide entertainment and holds only an extremely limited right to serve alcoholic beverages by virtue of the applicability of the 1983 Ordinance to a portion of its leased premises.
CONCLUSIONS
With respect to their due process claims, Bar and Hand understandably decry the rapidity of events occurring between August 14 and 18, 2009, that resulted in the revocation of the 1999 Ordinance's blanket special exception and the denial of their individual applications for special exceptions. However, their corporate representatives received actual notice of and actively participated in Council's August 18th proceedings. Council that day undertook legislative actions within the scope of its lawful authority, and the Court therefore concludes that it did not violate either Bar's or Hand's procedural or substantive due process rights so as to entitle them to constitutional-based relief. Bar and Hand representatives received a reasonable opportunity to be heard and Council's actions fell well within the limits of legitimate governmental action respecting local land use regulation.
This Court discussed the elements of procedural and substantive due process claims in Owens v. City Council of the City of Norfolk, 75 Va. Cir. 91, 107-108 (2008).
Thus, the Court now decides the four issues presented by these consolidated cases as follows:
1. The City, pursuant to Virginia Code §15.2-1432 and other applicable law, is entitled to injunctions against Bar and Hand prohibiting them from operating as Entertainment Establishments and serving on-premises alcoholic beverages at Waterside.
As to Hand, respecting alcoholic beverage sales, the injunction must exclude the floor space upon which the general use permit of the 1983 Ordinance continues to apply.
2. Bar and Hand are not entitled to common law injunctive relief against the City so as to prohibit it from interfering with their operating as Entertainment Establishments and serving on-premises alcoholic beverages at Waterside.
3. Bar and Hard are not entitled, pursuant to Virginia Code §8.01-184, et. seq., to declaratory relief holding that Council acted unlawfully on August 18, 2009 when it revoked the blanket special exception respecting the operation of Entertainment Establishments at Waterside and denied the applications of Bar and Hand for individual special exceptions to conduct such business operations at Waterside.
4. The Board of Zoning Appeals correctly ruled that Bar and Hand possess no vested rights to operate as Entertainment Establishments at Waterside, that Bar possessed no vested right to serve on-premises alcoholic beverages at Waterside, and that Hand possessed no vested right to serve on-premises alcoholic beverages at Waterside, except, however, as to the small area of Hand's floor space still subject to the general use permit of the 1983 Ordinance. With respect to this narrow issue, the Court finds that the BZA erred in its decision respecting Hand's vested rights to serve on-premises alcoholic beverages at Waterside.
The BZA also erred in affirming the zoning administrator's specific determination that the 1999 Ordinance "replaced and superceded" the 1983 Ordinance. --------
The Court directs counsel for the City to prepare and circulate a final Order that encompasses this Court's rulings as embodied in this letter-opinion, and as applicable to each of the cases consolidated herein for trial and disposition. After its circulation among counsel, the Order is to be submitted to the Court for its signature no later than Wednesday, January 18, 2012. Should counsel reach an impasse as to the language of that Order, counsel shall schedule a conference call or hearing with the Court on or before the January 18th deadline.
As the Court stated to counsel on the record at the conclusion of the trial proceedings, it sincerely appreciates the professionalism and civility shown by all counsel throughout the conduct of this significant litigation.
Very truly yours,
/s/
Norman A. Thomas
Judge NAT/nm