In a very recent decision by a District Court in New Jersey, the provisions of RLUIPA have been applied to a city which allegedly delayed the approval of a necessary variance for approximately 4 years. The city defended by saying that most of the delay was the fault of the church, but on this motion to dismiss, the court had to accept as true the allegations of the complaint, and based on those allegations, the court found there was clearly a substantial burden on religious exercise.
This case, Israelite Church of God v City of Hackensack, presented some other interesting issues such as whether individual defendants could be held liable under the terms of the federal statute. Given appropriate pleadings, the court held that they could be, broadly based along the same lines as the federal Civil Rights Act, 42 USC §1983.
It is a very interesting case, and one can only speculate that the Tennessee state statute could also be applied in the same way; that is, a delay in obtaining the permit for that period of time would be seen as a substantial burden on religious exercise.