Wednesday, May 15, 2013

TNCPA §208 (d): Demolition/Reconstruction of NCFPs

We’ve been discussing, over the last week or so, the Tennessee Non-Conforming Property Act, Tenn. Code Ann. §13-7-208 (TNCPA). Last time we considered the expansion of a non-conforming property under §208 (c); in this post, we will take a look at the demolition/reconstruction of a non-conforming property under §208 (d).

Section 208 (d) allows the destruction and reconstruction of any structures on the non-conforming property. There is one important additional requirement that is not present in either §208 (b) or (c), and that is that the demolition/reconstruction must be “necessary to the conduct” of the commercial or industrial business. Under certain circumstances then, it may be best simply to expand under §208 (c) rather than destroy/reconstruct under §208 (d); sometimes business necessity is difficult to prove. Further, guidance from the courts has not been clear on what constitutes business necessity for this purpose. I believe that the business necessity test should be leniently construed, otherwise it actually encourages the property owner to expand the business rather than tear down and reconstruct. Let’s take a quick example.

If I have a business that makes widgets and I’d like to tear down my building and build a new one to improve efficiency and output, I would normally have to show business necessity under §208 (d). But suppose I simply decide to build a new building and leave the first one standing (assuming I have sufficient room on the property). I use the new building to make my widgets, and convert the original building to office and storage space. I submit that this expansion is permitted under §208 (c), and I need not make any showing of business necessity under §208 (d). But in effect, my business has expanded more than I actually needed, and to the extent that any case can be made that the use of the property is inconsistent with the surrounding land uses, the situation is probably even worse than if I had torn down the original building and replaced it with another. Thus perhaps a lenient position with regard to business necessity is called for.

Furthermore, under §208 (i), not only must the demolition and reconstruction be necessary for the continuation of the business, but in addition, the reconstructed facilities must comply with the bulk regulations contained in the zoning ordinance. Section 208 (i) expressly mentions setbacks, height, bulk, or requirements as to the physical location of a structure upon the site as existing zoning regulations which must be met if reconstructed under subsection (d). Again, compliance with these bulk regulations is often difficult and frequently the best advice is to simply expand under subsection (c) as opposed to reconstructing under subsection (d). Remember that under subsection (d), the reconstructed buildings must meet the bulk regulations. But under subsection (c), any additional facilities constructed do not need to meet the bulk regulations, and only in fact need to avoid becoming a nuisance. Obviously, the latter is a much lower standard to meet.

There is an express exception concerning off-site signs in subsection (i); the bulk regulations do not apply to reconstructed off-premise signs. There remains a significant question in my mind as to whether this distinction is constitutionally reasonable. It seems difficult to come up with an explanation as to why an off-site sign need not comply with the bulk regulations when another structure, such as, for example, an on-site sign does.

But perhaps my constitutional concern is groundless. Perhaps §208 (i) doesn’t really apply in the first place. Take a look at the final proviso of subsection (g)(4) which provides in part: the restrictions of subsection (i) shall apply only “if the property owner intentionally and voluntarily abandons the non-conforming use of the property.”  It is difficult to make any sense of this whatsoever. Subsection (g) (4) deals with discontinuation clauses and we will discuss it in detail in a later post. Why suddenly, at the end of the subsection, there is a reference to subsection (i) is hard to fathom. Furthermore, subsection (i) would ordinarily require that a property demolished and then reconstructed comply with the bulk regulations. Yet subsection (g) indicates that if the owner does not intentionally abandon the use, subsection (i) is inapplicable.

Seemingly, this makes no sense. If the property owner has demolished the structures on the property with the intent of rebuilding pursuant to subsection (d), then there is certainly no present intent to voluntarily abandon the non-conforming property. Yet, if there is no such intent, subsection (i) seems inapplicable. If that is true, then when would it ever apply?

Or is it possible that the statutory intent was that subsection (i) applied only after some period of inactivity. Again, that doesn’t help us much. If that’s the answer, then any owner wishing to invoke the protection of the statute and remove the restrictions of subsection (i), would simply cease operations for a few days or months and then begin the reconstruction process. If inactivity is necessary in order to invoke the proviso, that is easily done and once again it simply undermines the entire intent behind subsection (i).  

One other interesting comment is worth noting here. Let’s assume for a moment that the use of the property was permitted but the regulations which changed had only to do with the location of the structure on the property, that is, the bulk regulations were changed. For example, perhaps the local government now requires a greater setback from the street, or a larger side yard. Assume further that the non-conforming activity stops, perhaps because of a fire rendering the interior of the building unusable. The owner intends to demolish and reconstruct the entire building but allows it to sit for a year before applying for a building permit. Does subsection (i) permit the reconstruction of the building at the same location in violation of the bulk regulations? It would appear not. Even under subsection (g)(4)’s final proviso, the bulk regulations do not apply only if the property owner abandons the non-conforming use of the property. Since the use of the property in this hypothetical actually conforms, it would appear that the bulk regulations apply to the new construction. These are some very strange and convoluted statutory provisions. Hopefully, the courts will at some point give us additional instruction and how they are to be applied.

In the meantime, we can say that with regard to §208 (d) a non-conforming property can be demolished/reconstructed if the reconstructed facilities are necessary to the continuation of the business. It may be that the reconstructed buildings must comply with the bulk regulations of the local zoning ordinance, although this is unclear. Furthermore, it is certainly true that the destruction/reconstruction of an off-site sign need not comply with the local bulk regulations, but that any expansion of an off-site sign (under §208 (c) or (d)) must comply with the provisions of §208 (h) regarding the permitted size of any expansion.

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