Court OK’s Rezoning That Thwarted CarMax Deal

DENVER (CN) - Property owners cannot sue after a Colorado county's rezoning measures killed their plans to develop a dealership for CarMax, the 10th Circuit ruled.

Jordan-Arapahoe and Jacob Maxin Co. argued that they held a protected property interest in land that they purchased from Arapahoe County. One of the permitted uses for the land, which was zoned for mixed use and planned unit development, was "automotive sales and repair."

Jordan-Arapahoe invested about $2.6 million to groom the land for a car lot - adding streets, water drainage and sewer lines - and intended to sell it to used-car dealer CarMax before the defendant county rezoned the space and prevented the sale.

Rezoning the land replaced the preliminary development plan's original 30-foot setback with a 1,500-foot setback for all public paths surrounding the property, according to court documents.

"The 1,500-foot setback only applies to automobile or vehicle sales uses and makes it impossible to build a car dealership on the property, effectively negating Jordan-Arapahoe's contract with CarMax," the ruling states.

The property owners in turn filed suit against the county commissioners in District Court, claiming that their property interest could be established under Colorado's Vested Property Rights Act or Colorado common law.

A federal judge dismissed the arguments, however, finding that the plaintiffs failed to show protected interest since its development proposal had not yet become final or vested.

Last week, the 10th Circuit agreed and dismissed the complaint for failure to state a claim.

"Under Colorado law a property owner does not obtain a vested property right absent (1) the approval of a site specific development plan, or (2) the landowner's substantial and detrimental reliance on representations and affirmative actions by the local government," Judge Timothy Tymkovich wrote for the three-judge appeals panel. "Neither condition was met here."

"No vested right exists until Arapahoe County approves a final development plan," the judge continued, bluntly.

Jordan-Arapahoe and Jacob Maxin cited Eason v. Bd. of County Commissioners of Boulder, which vested property rights by virtue of a zoning classification, and contended that they had relied on the county's representations or affirmative action when they developed the land.

The 10th Circuit noted, however, that it could not find an affirmative action.

"The preliminary development plan ("PDP") establishes general land uses and siting restrictions, including proposed site development criteria," Tymkovich wrote. "Approval of the PDP alone cannot qualify as an affirmative action or representation because Jordan-Arapahoe could not have reasonably relied on the PDP approval as creating a vested right absent the second-step final approval."

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