Docket: LA93010

Order: LA93-10

IN THE MATTER of the Planning Act, R.S.P.E.I. 1988 Cap. P-8;

and

IN THE MATTER of an appeal to The Island Regulatory and Appeals Commission (the Commission), under Section 28 of the Planning Act, by Hilda Hilchey and Faye Fraser (the Appellants) of Montague, against a decision of the Montague Town Council to re-zone property owned by Gertrude MacIntyre (Provincial Property Number 198192) located in Montague, P.E.I., from Residential (R1) to Commercial (C1).

DATED the 15th day of September, 1993.

John L. Blakney, Vice-Chairman
Anne McPhee, Commissioner
Michael Ryan, Commissioner

Order

Appearances

1. For the Appellants

Hilda Hilchey and Faye Fraser Appellants

John Hughes Spokesman

2. For the Town of Montague

Sean Halley Legal Counsel

3. For the Property Owner

Alfred Fraser Legal Counsel for Gertrude MacIntyre 

Reasons for Decision

I. BACKGROUND

In accordance with the Planning Act and the Town of Montague Zoning and Subdivision Bylaws, specifically Part 15, Sections 9 and 10, the Town Council of Montague may change a zoning designation of any parcel of land.

The matter before the Commission involves an appeal by Hilda Hilchey and Faye Fraser, both residents of Fraser Street, against a decision of the Montague Town Council to re-zone property (Provincial Property Number 198192) from Residential (R1) to Commercial General (C1).

On July 20, 1993, Gertrude MacIntyre of Montague made application to the Montague Town Council to re-zone her property (Provincial Property Number 198192) located at 151 Fraser Street from Residential (R1) to Commercial General (C1). (Exhibit 9)

Town Council held a public meeting on Friday, August 6, 1993 and, according to the minutes of the meeting, the majority in attendance spoke against the re-zoning application with some in favour. (Exhibit 6)

At a regular meeting of the Montague Town Council, on Monday, August 9, 1993, Council gave first reading and passed a motion in favour of re-zoning the property. (Exhibit 4)

At a special meeting of the Montague Town Council, on Thursday, August 12, 1993, Council gave second reading to the re-zoning request and voted in favour of re-zoning the property. (Exhibit 3)

On August 16, 1993, Hilda Hilchey and Faye Fraser appealed the decision of the Town Council to The Island Regulatory and Appeals Commission. (Exhibit 2)

The Commission heard the appeal on Wednesday, August 25, 1993, in Montague.

II. EVIDENCE AND ARGUMENTS

A. Appellants

Arguments for the Appellants can be summarized as follows:

1. Town Council gave little consideration to the concerns of the residents living on Fraser Street and treated them unfairly and unjustly in reaching the decision to re-zone the land.

2. The Town is allowing the commercial zone to surround Mrs. Hilchey's residential lot which is a similar circumstance to the situation that occurred with the other lots zoned to commercial on Fraser Street. It is an improper approach to zoning. The residents have witnessed a deterioration of their residential neighbourhood quality of life on Fraser Street with the encroachment of commercial land uses.

3. New commercial activities or expansion of the commercial activities will cause greater deterioration of the residential neighbourhood and the quality of life that should be associated with such a neighbourhood.

Mr. John Hughes, on behalf of the Appellants, argued that Council did not deal with the re-zoning issue in accordance with normal planning practices. In addition, Section 61 of the Municipalities Act allows for expression of opinion from residents and therefore Council must consider these opinions in making their decision.

B. Town of Montague

Arguments for the Town of Montague can be summarized as follows:

Counsel for the Town argued that the Town Council did not err in its decision. Council considered the merits of the proposed re-zoning and voted in favour of re-zoning the property from residential to general commercial. As such, Council made its decision based on what they believe is for the common good of the community. There has been no denial of natural justice.

The character of Fraser Street has and continues to change. The land use is now mixed with a variety of developments including the school, dentist office and commercial lots. As the Town requires more services it is natural that existing commercial development be allowed to expand into the Fraser Street area. This re-zoning and proposed expansion is appropriate and must be viewed as a natural progression of the existing commercial development. Sobey's Inc. is a good corporate citizen and has contributed to the Town, both in taxes and with the creation of employment.

As to the arguments of increased noise, traffic and declining property values, these are purely speculative on the part of the Appellants. The proposed expansion will discourage such problems.

C. Property Owner - Gertrude MacIntyre

Arguments for Mrs. MacIntyre can be summarized as follows:

Counsel for Mrs. MacIntyre argued that Council, as elected officials, made a decision in accordance with its bylaws. Council did not err in its decision to re-zone the property from residential to general commercial.

Previous decisions of the Land Use Commission show that there is a reluctance to set aside municipal decisions.

D. Others

The Commission heard comments from other interested persons.

III. DECISION

Having considered the evidence presented during the hearing, the Commission decided to allow the appeal. The reasons for this decision are as follows:

The Commission finds that although the request for re-zoning was made by Gertrude MacIntyre, it was agreed by all parties that plans for expanding the Sobey's grocery store facility are an integral part of the reason for the request to re-zone.

The Commission believes that in a re-zoning application, no land owner has a statutory right to a re-zoning. In the absence of bylaws, regulations, official plans or even guidelines or criteria to determine re-zoning applications, the Commission agrees with the Land Use Commission's finding that the Council for the Town of Montague can grant a re-zoning only if it is convinced that a granting of the request would be in the long-term interest of the Town, as well as the Appellant.1

The Commission finds that, pursuant to Part 15, Sections 9 and 10 of the Town of Montague Zoning Bylaw, Council has the authority to amend the zoning designations but is required to first give public notice of its intention.

Section 9.

Before changing the zone designation of any parcel of land, the Town Council of Montague shall insert an advertisement giving notice of its intention to do so at least once a week for two successive weeks in a newspaper published or circulating in the area affected; the first of such notices to be published at least two clear weeks before the date fixed for consideration of objections.

Section 10.

The notice shall state the place where and the hours during which the regulations and the proposed amendment may be inspected by any interested persons and a time and place set for the consideration by the Council for objections.

In considering re-zoning appeals, the Commission takes the position that it is reluctant to interfere with the decision of the elected representatives in the exercise of their discretion except where it is shown that their action is clearly not for the greatest common good, that it creates an undue hardship, or that they have acted arbitrarily. This approach is consistent with that of the former Land Use Commission.2

In this case, even though the Commission believes that Council made its decision with a view to the common good and benefit of the community as a whole, we do not agree with the planning strategy Council has used to re-zone the land. Also, the Commission believes that the Councillors were comforted by a number of assumptions related to controlling the development of the lot that are incorrect.

With respect to the planning strategy applied to the re-zoning, it appears Council has adopted a method of spot zoning, which has been an approach taken by Town Council to re-zone other lots located on Fraser Street from residential to commercial. However, in other areas such as Sackville Street it has taken a very different approach—one that ensures a certain stability for land owners and a level of confidence for land owners in how the immediate area will develop.

On November 2, 1976, the Land Use Commission heard an appeal by Mrs. W.A. Hilchey, et al., of Montague against a decision of the Town of Montague to re-zone two lots on Fraser Street (Property Numbers 197400 and 198234) from residential to commercial use. In reaching its decision to uphold the decision of the Montague Town Council, the Land Use Commission considered the following points:

· nuisance to the residents

· effects on the market value of other properties in the area

· the need for commercial land

· the Town Zoning Bylaw, specifically (Section 25(4))

· increased traffic in the area.

On January 23, 1990, the Land Use Commission heard an appeal by Food City Limited and Sobey's Inc., Montague, against a decision by the Montague Town Council to deny a request to re-zone property (Provincial Property Number 198242 ) from residential to commercial. On January 24, 1990, the Land Use Commission voted to allow the appeal and ordered that the Town Council re-zone the property (Provincial Property Number 198242) from Residential (R1) to Commercial (C1).

The Land Use Commission stated that the encroachment of commercial development into residential areas creates major land use conflicts and usually an unwanted transition in land use. Because the lot in the Food City case was isolated within a commercial zone, the Land Use Commission found that to re-zone the property to commercial use would not result in further encroachment into the residential neighbourhood.

In that case, the Land Use Commission found that the Town Council made its decision to deny the re-zoning with a view to the common good, however it found a single property left zoned residential while the surrounding properties were zoned commercial. It was the Land Use Commission's view that the property could not be enjoyed in the manner one would normally expect from a residential property.

The method used to re-zone or convert lots from residential to commercial zoning along Fraser Street, specifically the planning strategy for re-zoning adopted by Council, has particular relevance to this appeal and the Commission's decision.

The Commission heard evidence by several councillors and a former Mayor of the Town that the Town has been unsuccessful in developing an Official Plan, and as a result successive Councils are faced with dealing with re-zoning applications on the basis of individual requests. This approach leads to spot zoning, which is simply changing the existing zoning for one or two lots, or a small area within a larger area zoned for another purpose.

It is the Commission's opinion that piecemeal zoning or spot zoning should only be used under exceptional circumstances. The Commission finds that this is a particularly irrational approach to planning and one which has very little validity based on sound planning principles. A major problem associated with this approach to re-zoning is that residents of a residential neighbourhood lack confidence in the zoning bylaws because of the instability of the zones. Several residents testified that at one time Fraser Street could be characterized as a residential area but now the residential character is being undermined by the encroachment of commercial development through spot zoning. The Commission heard evidence from area residents indicating that, associated with the commercial encroachment has been a decrease in their quality of life along Fraser Street, due to an increase in noise at any time of the day, litter and traffic. After considering the submission of the residents', the Commission agrees that the encroachment of commercial activity has and will continue to interfere with the residential quality of life in the neighbourhood of Fraser Street.

Residents stated they fear that their property assessments will be reduced. Although the Appellants were not prepared to present any expert documents or reports to support their contention of detrimental impact, the Commission notes that concerns expressed by the residents over the de-valuing of their residential properties is a usual argument in re-zoning cases. However, as in this case, little expert evidence is presented by either party. It is the Commission's view that the assessed values of the residential properties would most likely be affected, however, commercial uses are normally considered a higher order use in terms of value, and that the sale of residential properties as commercial properties would probably be an economic benefit. In regards to Mrs. Hilchey's lot there is little question that if the lot next to her is re-zoned commercial, her property as a residential property would be negatively affected, in that, the sale as a residential property would be unlikely. This is evident by the inquiries made by Sobey's Inc. to Mrs. Hilchey for the acquisition of her lot, presumably for commercial use.

It is clear from the evidence that it is the intention of the Town Council to allow the conversion of the residential use of the lots along Fraser Street to accommodate commercial development. The Commission believes that the incremental approach or spot zoning does not address the real issue confronting the neighbourhood of Fraser Street, the Council or the adjacent commercial land owners. The real issue is: What are the limits for commercial encroachment into the Fraser Street residential neighbourhood? The Commission believes that the approach by Council can only continue to cause undue hardship to the residents of Fraser Street by slowly but surely consuming the residential neighbourhood for commercial purposes. For the Town Council to decide the limits of the commercial boundary will ensure at least a level of confidence in the zoning on the part of the lot owners, even if they are opposed to those limits. The present approach to re-zoning is clearly unacceptable. Consequently, the Commission cannot allow a re-zoning based on a planning strategy that, in effect, undermines the quality of life for the residents of Fraser Street and leads to continued uncertainty in a neighbourhood.

The second issue addressed by the Commission in this decision is the set of assumptions upon which Council based its decision to re-zone which are:

1. Under the re-zoning application, Council assumed they could re-zone the lot to commercial and then control or limit the actual use or development on the lot.

2. In terms of the building permit application, Council assumed that certain conditions could be attached to the building permit, which would limit or control the use of the property. It would seem that Council thought that a development agreement could be entered into to control the actual development.

The Commission finds that these assumptions are incorrect and that the councillors should not be comforted in the thought that Council has unlimited control over development of the lot once it is re-zoned.

It is clear to the Commission that Council voted in favour of approving the re-zoning of the property on the premise that Sobey's would eventually purchase the property from the MacIntyres and use the lot to accommodate the expansion of their present operation.

The Commission finds, however, that Council is required to permit any of the uses listed under the Commercial General (C1) Zone. There is no guarantee—nor can it be guaranteed—that the aspiration of the Councillors will be realized and the company will buy and develop the lot as part of its plans to expand.

According to Rogers', Canadian Law of Planning and Zoning, most bylaws prohibit all uses except those that are expressly permitted, which involves listing the latter and often causes the omission of acceptable uses that might have been included.3 These bylaws are viewed as exclusionary bylaws and as such prohibit any use of land or building except for those defined as permitted uses so that any use that is not specifically permitted is excluded.

The Town of Montague Zoning Bylaws expressly permits the following uses and sets out development standards:

Part 10: Commercial General (C1) Zone.

Section 1.

No development permit shall be issued in a Commercial General (C1) Zone except for one or more of the following uses:

Animal Hospital and Veterinary Establishments

Automobile Service Stations, including automobile washing establishments as an accessory use conducted on the same lot

Banks and Financial Institutions

Business and Professional Offices

Churches and Religious Institutions

Clubs

Commercial Schools

Dressmaking and Tailoring

Funeral Homes

Hotels, Motels, and Other Tourist Establishments

Indoor Recreational Establishments

Institutional Uses

Medical Clinics

Parking Lots and Parking Structures

Places of Entertainment, Recreation and Assembly, which are conducted within wholly enclosed buildings

Private Clubs and Fraternal Organizations

Photography Studios

Printing Establishments

Repair Shops

Restaurants

Retail Stores

Service and Personal Service Shops

Taxi and Bus Stations

Parks and Community Centres, subject to the Open Space (O1) Zone Requirements

Section 2.

In a Commercial General (C1) Zone, no development permit shall be issued except in conformity with the following requirements:

Minimum lot area 20,000 sq. ft.

Minimum lot frontage 100 ft.

Minimum front yard 25 ft.

Minimum side yard 10 ft.

Minimum rear yard 25 ft.

Maximum building height 35 ft.

Parking for retail stores 1 space/150 sq. ft. of floor area.

The Commission has concluded that the zoning bylaw does not provide Council with the discretion to control development to the degree which the Councillors believe exists—specifically, once the lot is re-zoned to commercial to prevent any other commercial use other than a retail store owned by Sobey's. The Commission finds that the Bylaws are void of any enabling legislation which would allow Council to deny a development which would qualify as a permitted use.

In order to reinforce zoning bylaws, municipalities sometimes require developers to enter into development agreements which have the effect of ensuring that the builder is obliged to carry out the conditions imposed on granting of approval of the project. According to Rogers, the general rule applicable to municipal authorities is that they must be expressly or implicitly authorized to enter into a contract.4 One which is outside their power is ultra vires, and one which is not authorized in the manner prescribed by statute may be unenforceable. However, if a developer voluntarily enters into an agreement it would appear to be enforceable even without statutory authority.

The Commission believes that if the lot is re-zoned it would be possible for the present owner or the future owner to sell or develop the property for other permitted uses. Council would have no legal authority to deny a building permit for any use permitted in accordance with Part 10 of the Bylaw.

In regard to the use of development agreements, the Commission heard evidence from several Councillors that Council could enter into an agreement with the developer to control the type of development. Council has acted under the premise that they could control the type and form of development when a building permit was applied for by attaching certain conditions to the building permit—for example, no access to Fraser Street and guaranteeing that Sobey's develops the lot as part of an expansion of the present or new store.

In the Commission's opinion, the zoning bylaw does not give the enabling authority required for Council to re-zone a parcel subject to the owner entering into a collateral agreement further restricting its use. Although Council has assumed that under their current bylaws this enabling clause exists, the Commission finds no evidence that Council has such powers or that Sobey's has agreed to enter into such an agreement. During the hearing, several Councillors stated that entering into development agreements or attaching conditions to building permits is a common practice. However, the Commission finds that the Town of Montague has not passed any enabling legislation, which authorizes it to negotiate agreements with a developer to control uses.

As a result, the Commission cannot affirm Council's decision to re-zone the lot when it believes Councillors based their decision on powers to control the future commercial development of the lot, powers which are absent. The Commission cannot help but question whether Council would have reached the same decision to re-zone if it understood that it did not have the powers to control permitted uses and development.

The Commission is cognizant that this area has and continues to be pressured by non-residential development. As such, the residential land owners of Fraser Street have experienced the proliferation of commercial and institutional development. The area is surrounded by mixed development with commercial development on Main Street, a dentist office at the corner of Queen Street and Fraser Street, a school at the end of Fraser Street, commercial lots on Fraser Street and the nearby location of the Town Hall.

Development decisions over time have changed and continue to change the nature and role of the Fraser Street neighbourhood in the Town. Based on past land use decisions, the Commission believes that it is incumbent upon Council to address the broader issue of whether the Fraser Street neighborhood should either be commercial or remain residential—instead of taking the piecemeal approach it has in the past. The Commission realizes that dealing with this land use issue will be burdensome, however Council has a responsibility to the residents of this neighbourhood and the Community to set a long-term plan and add stability and confidence for all land owners—commercial, residential, institutional or public service.

Area residents must be aware of the changing role of their neighbourhood on Fraser Street and that pressures associated with commercial development will continue. The reality is that residents will continue to find it difficult to enjoy their residential neighbourhood as they once did in the past. However, for the aforementioned reasons, the Commission hereby allows the appeal.

IN THE MATTER of the Planning Act, R.S.P.E.I. 1988 Cap. P-8;

and

IN THE MATTER of an appeal to The Island Regulatory and Appeals Commission (the Commission), under Section 28 of the Planning Act, by Hilda Hilchey and Faye Fraser (the Appellants) of Montague, against a decision of the Montague Town Council to re-zone property owned by Gertrude MacIntyre (Provincial Property Number 198192) located in Montague, P.E.I., from Residential (R1) to Commercial (C1).

Order

WHEREAS Hilda Hilchey and Faye Fraser (the Appellants) appealed to The Island Regulatory and Appeals Commission (the Commission), in written notice dated August 16, 1993, against a decision of the Montague Town Council;

AND WHEREAS the Commission heard the appeal at a public hearing conducted in Montague, P.E.I., on Wednesday, August 25, 1993, after due public notice;

AND WHEREAS the Commission has made a decision in accordance with the stated reasons;

NOW THEREFORE, pursuant to the Planning Act;

IT IS ORDERED THAT the appeal is hereby allowed.

DATED at Charlottetown, Prince Edward Island this 15th day of September, 1993.

BY THE COMMISSION:

John L. Blakney, Vice-Chairman

Anne McPhee, Commissioner

Michael Ryan, Commissioner

1 February 12, 1990, Decision of the Land Use Commission on an Appeal by Food City Limited and Sobey's Inc. Against a Decision of the Montague Town Council

2 Ibid.

3 Rogers, Canadian Law of Planning and Zoning, 1993, p.167.

4 Rogers, Canadian Law of Planning and Zoning, 1993, p.210.60.