MBC Realty, LLC v. Mayor of Baltimore

DEBORAH S. EYLER, Judge. In 2000, the Mayor and City Council of Baltimore (“the City”) enacted an ordinance imposing a moratorium on new billboards (“the Billboard Moratorium”). This appeal concerns three ordinances subsequently enacted that together 1) created an exception to the Billboard Moratorium, as a conditional use, for publicly-owned stadia and arenas in the B-5 zoning district; and 2) approved as a conditional use the erection of 14 billboards on the First Mariner Arena (“the Arena”), which is located in that district. 1 The Arena is owned by the City. Its primary tenant is First Mariner Bancorp, whose Chief Executive Officer, Edwin F. Hale, Sr., owns the Baltimore Blast, a professional indoor soccer team.

The Blast plays its home games at the Arena. The three ordinances were challenged in the Circuit Court for Baltimore City by various opponents who own or have interests in properties in the vicinity of the Arena. The better part of the next five years was spent in court proceedings, including an appeal in this Court and then in the Court of Appeals, over the proper procedural means to challenge the ordinances. See MBC Realty, LLC v. Mayor & City Council of Baltimore, 403 Md. 216 , 941 A.2d 1052 (2008), aff'ing in part and rev’ing in part, 160 Md.App. 376 , 864 A.2d 218 (2004).

Ultimately, the Court of Appeals held that a declaratory judgment action, under Md.Code (2006 Repl.Vol.), sections 3-401 through 3-415 of the Courts and Judicial Proceedings ²²⁴ Article, was the proper legal vehicle to challenge the ordinance that created the conditional use as an exception to the Billboard Moratorium; and an administrative appeal, under Md. Code (2003 RepLVol.), article 66B, section 2.09(a)(ii), by way of an action for judicial review, under title 7, chapter 200 of the Maryland Rules, was the proper legal vehicle to challenge the ordinance that granted the conditional use to the City, for the Arena. The case was remanded to the circuit court, which, after further proceedings, issued two judgments: one declaring the ordinance creating the conditional use exception valid and one upholding the City Council’s grant of the conditional use to the City, for the Arena. This appeal is taken from those judgments. The appellants before this Court are the parties who challenged the ordinances below. 2 The appellees are the City and the private companies that manage the arena by contract with the City, Arena Ventures, LLC, and SMG, Inc. We have reworded and separated the questions presented by the appellants as follows: I. Did the circuit court err by declaring legal the ordinance that created a conditional use for publicly-owned stadia and arenas in the B-5 zoning district?

II

Was there substantial evidence to support the City Council’s decision to grant the conditional use in question to the City, as owner of the Arena, and was that decision in accordance with the law?

III

On remand, did the circuit court err “in challenging [the appellants’] standing to challenge” the ordinance granting the conditional use to the City as the owner of the Arena? 3 ²²⁵ For the reasons that follow, we shall affirm the judgments of the circuit court. FACTS AND PROCEEDINGS On March 27, 2000, the City enacted Ordinance 00-0001, a text amendment to several sections of the Baltimore City Zoning Code (“Zoning Code” or “Zg”), which had the effect of prohibiting all new billboards in the City. 4 Before the Billboard Moratorium was enacted, new billboards had been allowed as conditional uses in some zoning districts, including the B-5 district. The B-5 district is the “Central Commercial District,” which is covered by Title 6, Subtitle 6 of the Zoning Code. A year after the Billboard Moratorium was enacted, the City Council passed and the Mayor approved Ordinance 01-230, which carved out an exception for general advertising signs at bus shelters.

That ordinance amended the definition of “general advertising sign” in the Zoning Code to exclude “a sign that: (I) is attached to a bus passenger shelter; and (II) ²²⁶ complies fully with the requirements of § 11-424 of this title.” Section 11-424 of the Zoning Code imposed specific limitations on the design, size, and content of advertising signs on bus shelters and specified the procedure for obtaining approval to erect signs of that sort. Almost three years after the Billboard Moratorium was enacted, on September 23, 2002, three bills were introduced before the City Council that, if enacted, together would allow a second exception to the moratorium. The bills would create a conditional use for new billboards on publicly owned stadia and arenas in the B-5 zoning district and grant such a conditional use to the City, as owner of the Arena. The bills proposed the following Ordinances: 1) 03-513, amending the text of the Urban Renewal Plan for the Market Center Area of Baltimore City (in which the Arena is located) to allow new billboards approved by ordinance as a conditional use on publicly owned stadia and arenas; 2) 03-514, amending the text of the Zoning Code to create for the B-5 district a conditional use for new billboards on publicly owned stadia and arenas; and 3) 03-515, granting such a conditional use to the City for 14 new billboards on the exterior of the Arena.

The applicant for the bills was listed as the “Administration (Baltimore Development Corporation).” 5 At the time, the only publicly owned stadia and arenas in the B-5 zone were the Arena, Oriole Park at Camden Yards, and the M & T Bank Stadium. “The latter two are owned by the State of Maryland and thus are not subject to zoning regulations by Baltimore City. See Mayor & City Council of Balt. v. State, 281 Md. 217, 223-24 , 378 A.2d 1326, 1329-30 (1977).” MBC, 403 Md. at 223 n. 7, 941 A.2d 1052 . Thus, when the legislation was proposed, the Arena was the only property that not only was eligible for such a conditional use but also would have any need to apply for it. ²²⁷ The bills were referred to the City Planning Commission, Department of Planning (“Commission”). Its staff prepared a report (“Staff Report”) describing the bills and recommending their approval.

The Staff Report identified Hale as a petitioner for the bills and as an applicant for the conditional use. The report further recommended, at the suggestion of the Citizens Planning and Housing Association (“CPHA”), an established grass roots advocacy group that had championed enactment of the Billboard Moratorium, that, if the conditional use were granted so that the new signs would be allowed on the exterior of the Arena, the City also would require that an equal number of existing billboards in the City be removed. On January 9, 2003, the Commission considered the bills and, with certain amendments not relevant here, recommended that the City Council pass them. On February 19, 2003, hearings on the bills were held before the Land Use and Planning Committee of the City Council.

The bills were amended to require, as lobbied by CPHA, that for each new billboard the Arena would be permitted to erect, one billboard elsewhere in Baltimore City would be removed. On March 24, 2003, the City Council passed Ordinance 03-513, which took effect immediately, and Ordinance 03-514, which took effect 30 days later. Then, on April 7, 2003, it passed Ordinance 03-515, which took effect 30 days after that. The Mayor signed the three ordinances into law on April 9, 2003. 6 ²²⁸ As mentioned above, there followed actions for judicial review in the Circuit Court for Baltimore City and appeals, all of which concerned, as the Court of Appeals put it, the “modalities of legal process [that] may be available to obtain judicial scrutiny of these enactments by the Mayor and City Council.” MBC, 403 Md. at 219 , 941 A.2d 1052 .

Those thorny procedural issues were put to rest when the Court held that [the appellants] must pursue via their declaratory/injunctive action their grievances with regard to Ordinance 03-514, the zoning ordinance text amendment to the Baltimore City Zoning Article, but should be allowed to amend that action to frame in a petition for judicial review their claims as to Ordinance 03-515 granting the specific conditional use to the Arena. Id. at 242 , 941 A.2d 1052 . The Court referenced only Ordinances 03-514 and 03-515 because, as it had noted elsewhere in its opinion, by then, the appellants were not seeking declaratory and injunctive relief respecting Ordinance 03-513, the text amendment to the Urban Renewal Plan, given that that ordinance would be ineffective or inconsequential if Ordinance 03-514 were found illegal. That remains the case, and therefore, for ease of discussion, in this opinion we shall focus only on Ordinances 03-514 and 03-515.

On remand, the appellants filed a second amended complaint refashioning their claims to comport with the holding of the Court of Appeals, ie., by including counts for declaratory and injunctive relief respecting Ordinance 03-514 and counts for judicial review respecting Ordinance 03-515. The parties filed motions for summary judgment and oppositions on the declaratory judgment counts and submitted memoranda of law under Rule 7-207 with respect to the judicial review counts. The court held a hearing on all motions, and held the matter sub curia. The court issued a declaratory judgment ruling legal the City’s creation, by enactment of Ordinance 03-514, of the conditional use in question.

It also issued an order in the action for judicial review upholding the City Council’s decision ²²⁹ to grant the newly created conditional use to the City, as owner of the Arena property. The circuit court judge explained these rulings in an accompanying 32-page memorandum opinion. This timely appeal followed. DISCUSSION I. Ordinance 03-514 (Declaratory Judgment) The State’s police power encompasses the power to regulate land use, including the power to plan and zone.

For property within the City of Baltimore, the State has delegated planning and zoning power to the Mayor and City Council by article 66B, sections 2.01 through 2.13 of the Maryland Code (2003 RepLVol., 2009 Supp.). Section 2.02(a) empowers the City to divide the municipality into zoning districts and within them “regulate and restrict the erection, construction, reconstruction, alteration, repair, or use of buildings, structures, or land.” In addition, by virtue of section 2.05(a)(1), the City is empowered to “periodically amend or repeal regulations, restrictions, and boundaries.” As Judge Harrell explained in People’s Counsel for Baltimore County v. Loyola College in Md., 406 Md. 54, 70 , 956 A.2d 166 (2008), traditional “Euclidean” zoning, which divides a geographic area into use districts, is a “ ‘fairly static and rigid form of zoning.’ ” (quoting Mayor & Council of Rockville v. Rylyns Enterprises, Inc., 372 Md. 514, 534 , 814 A.2d 469 (2002)). 7 A conditional use or special exception is a zoning device that “introduces some flexibility to a ‘fairly static and rigid’ Euclidean zoning scheme ... by serving as a ‘middle ²³⁰ ground’ between permitted uses and prohibited uses in a particular zone.” Id. at 71, 956 A.2d 166 . A permitted use in a given zone is permitted as of right within the zone, without regard to any potential or actual adverse effect that the use will have on neighboring properties. A special exception, by contrast, is merely deemed prima facie compatible in a given zone.

The special exception requires a case-by-case evaluation by an administrative zoning body or officer according to legislatively-defined standards. That case-by-case evaluation is what enables special exception uses to achieve some flexibility in an otherwise semi-rigid comprehensive legislative zoning scheme. Id. at 71-72 , 956 A.2d 166 (footnote omitted). The leading Maryland case on special exceptions (and therefore on conditional uses), is Schultz v. Pritts, 291 Md. 1 , 432 A.2d 1319 (1981), in which the Court described the zoning device as follows: The special exception use is a part of the comprehensive zoning plan sharing the presumption that, as such, it is in the interest of the general welfare, and therefore, valid.

The special exception is a valid zoning mechanism that delegates to an administrative board a limited authority to allow enumerated uses which the legislature has determined to be permissible absent any fact or circumstances negating the presumption. The duties given the Board are to judge whether the neighboring properties in the general neighborhood would be adversely affected and whether the use in the particular case is in harmony with the general purpose and intent of the plan. 291 Md. at 11 , 432 A.2d 1319 (emphasis in original). As already noted, before the Billboard Moratorium was enacted for Baltimore City, some zoning districts allowed new billboards as a conditional use. 8 The ordinance effectuating ²³¹ the moratorium was an amendment to the text of the Zoning Code that eliminated that conditional use in the districts in which it had been allowed and made the use a prohibited one in all districts. See Ordinance 00-0001 (amending Zg section 10.0-1 to prohibit the “erection, placement, or construction of new general advertising signs” and to prohibit the City from issuing permits for such signs).

Thus, in 2000, by a legislative act that amended the text of the Zoning Code, new billboards no longer could be erected in the City. Enactment of the Billboard Moratorium did not involve any change in zoning classifications. The zoning districts in Baltimore City remained the same as they had been before the moratorium was enacted. Rather, by text amendment, the language of the Zoning Code was changed to prohibit erection of new billboards.

Like the law adopting the Billboard Moratorium itself, Ordinance 03-514 was a text amendment that did not change any zoning classification within the City. Before Ordinance OS-514 was enacted, the Arena property was located in the B-5 district; and it remained in that district thereafter. However, because it is a publicly-owned arena, its owner (the City) became eligible to seek a conditional use permit to erect new billboards on the property. As a text amendment to the Zoning Code, Ordinance 03-514 was a legislative act by the City Council, not a “zoning action” by the City Council subject to judicial review under article 66B section 2.09(a)(l)(ii).

MBC, 403 Md. at 241-42 , 941 A.2d 1052 (citing Anderson House, LLC v. Mayor of Rockville, 402 Md. 689 , 939 A.2d 116 (2008); Md. Overpak, supra, 395 Md. 16 , 909 A.2d 235 ). Md. Overpak, of course, was the basis for the Court of Appeals’s decision in this case that the legality of Ordinance 03-514 is properly determined in a declaratory judgment action, not an administrative appeal/action for judicial review. Id. at 242, 941 A.2d 1052 . 9 ²³² The appellants contend Ordinance 03-514 was illegally enacted, for several reasons. We shall address each reason in turn.

(A) Comprehensive Rezoning/Presumption of Correctness of Legislative Action/Favoritism “[T]he act of zoning either may be original or comprehensive (covering a large area and ordinarily initiated by local government) or piecemeal (covering individual parcels, lots, assemblages, and ordinarily initiated by the property owner).” Mayor & Council of Rockville v. Rylyns Enterprises, Inc., supra, 372 Md. 514 , 814 A.2d 469 . As Judge Harrell explained for the Court of Appeals in Rylyns: The requirements which must be met for an act of zoning to qualify as proper comprehensive zoning are that the legislative act of zoning must: 1) cover a substantial area; 2) be the product of careful study and consideration; 3) control and direct the use of land and development according to present and planned future conditions, consistent with the public interest; and 4) set forth and regulate all permitted land uses in all or substantially all of a given political subdivision, though it need not zone or rezone all of the land in the jurisdiction. Id. at 535 , 814 A.2d 469 (citations omitted). There is a “strong presumption of correctness and validity” in favor of the “motives or wisdom of the legislative body in adopting original or comprehensive zoning.” Id.

(citation omitted). For that reason, the zoning established by original or comprehensive zoning only may be changed by subsequent comprehensive rezoning or, in the case of piece ²³³ meal rezoning, upon a showing that the original or comprehensive zoning was a mistake or that, since that zoning, there has been “a substantial change in the character of the neighborhood.” Id. at 536-37 , 814 A.2d 469 . In the case at bar, the appellants maintain that Ordinance 03-514 is invalid because it was not enacted by way of comprehensive zoning; and that, because it was not enacted by comprehensive zoning, it does not carry a presumption of validity. Instead, they argue, it was enacted outside the ordinary comprehensive zoning processes that are in place, in part, to eliminate favoritism in zoning changes and decisions.

Therefore, the appellants continue, the circuit court should not have applied the presumption of correctness to the enactment of Ordinance 03-514 (especially in combination with Ordinance 03-515) in deciding, by declaratory judgment, the legality of the ordinance; and without the presumption, the ordinance should have been found illegal. Our standard of review of a circuit court’s ruling on a declaratory judgment action is governed by Rule 8 — 131(c). We review the court’s factual findings for clear error and its legal findings de novo. See, e.g., Garfink v. Cloisters at Charles, Inc., 392 Md. 374, 383 , 897 A.2d 206 (2006).

In the case at bar, the material facts are not in dispute. Accordingly, our review is plenary. As mentioned above, original zoning and comprehensive zoning happen when a community establishes, by legislation, zoning classifications for property within the area. Rylyns, supra, 372 Md. at 535 , 814 A.2d 469 .

See also Maryland National Capital Park and Planning Commission v. Greater Baden-Aquasco Citizens Assoc., 412 Md. 73, 85 , 985 A.2d 1160 (2009) (quoting E.C. Yokley, Zoning Law and Practice, § 5-2 (4th ed. 2003)). It results from extensive study of the community, or a substantial area within it, often over a period of years. Greater Baden-Aquasco, supra, 412 Md. at 85 , 985 A.2d 1160 . The product of original zoning (the first zoning enactment for a jurisdiction) or comprehensive zoning (a new or broadly revised zoning enactment for the jurisdiction) is a ²³⁴ detailed zoning map and regulation of uses.

Montgomery County v. Woodward & Lothrop, Inc., 280 Md. 686, 702 , 376 A.2d 483 (1977). The original zoning for Baltimore City took place in 1923. Rockville Fuel and Feed Co. v. City of Gaithersburg, 266 Md. 117, 128 , 291 A.2d 672 (1972). The last comprehensive zoning legislation for Baltimore City was enacted in 1971.

Armstrong v. Mayor and City Council of Baltimore, 410 Md. 426 , 447 & n. 27, 979 A.2d 98 (2009). The appellants are incorrect in their assertion that, in .order to add a new conditional use (or special exception) for a zoning district, the legislative body having zoning power— here, the Baltimore City Council — must engage in the comprehensive zoning process. A conditional use may be adopted by means of a text amendment, i.e., a change to the language of the existing zoning ordinance. MBC, 403 Md. at 242 , 941 A.2d 1052 .

As noted above, under article 66B, section 2.05(a)(1), the City is empowered to “periodically amend or repeal regulations, restrictions, and boundaries.” The City points out that every conditional use that has been added to the Baltimore City Zoning Code since 1971 has been effectuated by means of a text amendment, not by means of the comprehensive zoning process. In any event, the appellants’ comprehensive zoning argument does not support their assertion that the enactment of Ordinance 03-314 was not entitled to a presumption of validity. Although passage of a text amendment is not original or comprehensive zoning, it has been held to be in the nature of a legislative action. Md. Overpak, 395 Md. at 35 , 909 A.2d 235 (citing Bd. of County Comm’rs of Carroll County v. Stephans, 286 Md. 384, 390 , 408 A.2d 1017 (1979)) (emphasis added).

As such, it is treated as legislative action; and it is the legislative nature of a zoning enactment that gives rise to the presumption that it is valid. Therefore, the City Council’s enactment of Ordinance 03-514 via text amendment was entitled to a presumption of validity, and the circuit court did not ²³⁵ err in applying that presumption. 10 The appellants maintain, however, that the timing of the three enactments made the new conditional use for the B-5 district created by Ordinance 03-514 so atypical, and so unlike legislative action, that it should not receive the favorable presumption ordinarily afforded legislative actions. Specifically, they assert that, because in passing Ordinances 03-514 and 03-515 virtually in tandem, the City Council added to the B-5 district a conditional use for which only one property (the Arena) was eligible, and then immediately granted the conditional use to that property, the rationale for the presumption in favor of legislative action does not apply. In support, the appellants quote the following passage from Rylyns, 372 Md. at 541-42 , 814 A.2d 469 : During the legislative process of defining zones and identifying the permitted uses for each zone, the local legislature also identifies additional uses which may be conditionally compatible in each zone, but which should not be allowed unless specific statutory standards assuring compatibility are met by the applicant at the time separate approval of the use is sought. “The special exception use is a valid zoning mechanism that delegates to an administrative Board limited authority to allow enumerated uses which the legislature has determined to be permissible absent any fact or circumstance negating the presumption.” [citation omitted].

Put another way, a special exception use is an additional use which the controlling zoning ordinance states will be allowed in a given zone unless there is a showing that the use would have unique adverse affects on the neighboring properties. ²³⁶ (Emphasis added by the appellants.) They argue that the ordinances at issue here 1) do not qualify as a conditional use because they were not enacted during the legislative process for establishing the permitted uses in the B-5 zone and 2) violate the “requirement,” as they put it, in Rylyns , that an application for the conditional use be made separately and at a later time than the creation of the conditional use to begin with. We already have addressed and rejected the first argument. Legislative revision of the language of a zoning ordinance by means of a text amendment is in the nature of a legislative action, and therefore is comparable to original zoning and comprehensive zoning. The City Council passed Ordinance 03-514 by engaging in a legislative process.

We also find no merit in the appellants’ second argument, which is at the heart of this appeal. The essence of this argument is that, because there was no significant time lapse between the legislative creation of the conditional use and the legislative grant of the conditional use, the use was not adopted as an abstraction, with only the welfare of the people, and not the welfare of a particular applicant, in mind; and the timing thus defeated an important objective of legislative planning and zoning — to regulate land use without engaging in favoritism. We do not read the quoted language from Rylyns to impose a requirement that, for a conditional use to be validly adopted by a legislative body, the adoption must take place so far in advance of any decision upon an application for the conditional use that there can be no overlap in the legislative thought processes about the two. The quoted passage describes generally how the legislative process of establishing zoning districts and determining the permitted uses in each district also involves determining uses that will be permitted and prohibited in the district when special conditions are met.

The passage does not impose a time or knowledge limitation upon the legislative act. Also, the passage from Rylyns is broadly worded, and appears to speak of the general compre ²³⁷ hensive zoning process, in which, by planning and study over a period of time, districts and uses are defined and identified across the map. Here, we are dealing with a text amendment process that, while legislative in nature, is not part of an overall planning process. It is noteworthy, moreover, that, although the conditional use in this case was created close in time to the grant of the conditional use, the conditional use standards that had to be satisfied to allow the grant are long-standing criteria, codified at sections 14-204 (“Required findings”) and 14-205 (“Required considerations”) of the Zoning Code.

Thus, regardless of the closeness in time of the ordinance creating a conditional use for the erection of new billboards on publicly-owned stadia and arenas in the B-5 district and the ordinance granting the conditional use to the City, for the Arena property, the conditional use could not have been granted unless it comported with the same standards applicable to all conditional uses in Baltimore City that were legislatively adopted in Baltimore City decades ago. It is that requirement, and not a matter of timing, that removes arbitrariness and therefore favoritism from the process. At oral argument, in response to a hypothetical question, counsel for the appellants agreed that enactment of Ordinance 03-514, creating the conditional use at issue, would have been valid if it had occurred a year before enactment of Ordinance 03-515, granting the conditional use to the City, for the Arena. We have found no authority requiring such a time lag, and see no reason to impose one judicially, and to engage in the numbers game that would follow.

The conditional use criteria in the Baltimore City Zoning Code sufficiently protect against favoritism; if a time lag is to be superimposed, the City Council always may amend the Zoning Code to include one. (B) Piecemeal Zoning The appellants assert that Ordinance 03-514 is an illegal enactment because it constitutes “piecemeal zoning.” ²³⁸ The presumption of validity that attaches to original and comprehensive zoning does not attach to piecemeal zoning, which is the rezoning, i.e., change from one zoning classification to another, of a particular property. As we have discussed above, it is to the contrary: because original and comprehensive zoning are presumed correct and valid, a piecemeal zoning change, which by definition is in derogation of the comprehensive zoning scheme, only will be approved upon “a satisfactory showing that there has been significant and unanticipated change in a relatively well-defined area (the “neighborhood”) surrounding the property in question since its original or last comprehensive rezoning, whichever occurred most recently” or that “the underlying assumptions or premises relied upon by the legislative body during the immediately preceding original or comprehensive rezoning were mistakes in judgment.” Rylyns, 372 Md. at 538 , 814 A.2d 469 . Piecemeal rezoning is carried out by means of a quasi-judicial process that focuses on individual grounds and scrutinizes a particular property.

Md. Overpak, 395 Md. at 35 , 909 A.2d 235 . See also Anderson House, LLC, 402 Md. at 708 n. 17, 939 A.2d 116 . Here, there was no change in the zoning classification for the Arena property. It was in the B-5 zoning district before Ordinance 03-514 was enacted and remained in that district after it was enacted.

What changed was the addition of a conditional use to the uses allowed in the B-5 district. Accordingly, there was no piecemeal zoning in this case. (C) Spot Zoning Next, the appellants argue that Ordinance 03-514 was illegal spot zoning, or tantamount to illegal spot zoning, and therefore must be struck down. “ ‘Spot zoning occurs when a small area in a [zoning district] is placed in a different zoning classification than the surrounding property.’” Rylyns, 372 Md. at 546 , 814 A.2d 469 (quoting