John Dimondi Enterprises LLC v. Board of Adjustment of New Castle

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
JOHN DIMONDI )
ENTERPRISES LLC, )
)
Appellant, )
)
v. ) C.A. No. N23A-03-008 PAW
)
)
BOARD OF ADJUSTMENT OF )
THE CITY OF NEW CASTLE, )
JAKSN, LLC, )
and BATTERY FEE )
OWNER LLC, )
)
)
Appellees. )
Submitted: November 30, 2023
Decided: February 29, 2024
On Appeal from the Board of Adjustment of the City of New Castle;
AFFIRMED.
MEMORANDUM OPINION AND ORDER
Josiah R. Wolcott, Esq. of Connolly Gallagher LLP, P.A., Attorney for Appellant.
John E. Tracey, Esq. of Young Conaway Stargatt & Taylor, LLP, Attorney for
Appellees JAKSN, LLC and Battery Fee Owner LLC.
Michael J. Hoffman, Esq. of Tarabicos, Grosso & Hoffman, LLP, Attorney for
Appellee Board of Adjustment of the City of New Castle.
WINSTON, J.
I. INTRODUCTION
This appeal derives from a decision by the Board of Adjustment of the City
of New Castle (the “Board”) granting an application to build an apartment complex.
Appellant, John DiMondi Enterprises, LLC (“DiMondi”), argues the Board erred in
granting certain variances contained in the application and that the record lacks
substantial evidence to support its decision. For the reasons set forth below, the
Board’s decision is AFFIRMED.
II. FACTUAL AND PROCEDURAL BACKGROUND
On October 19, 2022, Battery Fee Owner LLC (the “Applicant”) sought a
special exception under the Zoning Code of the City of New Castle for a mixed-use
residential property with commercial retail space (the “Project”) for the property
located on West Seventh Street in New Castle, Delaware (the “Property”).1 The
Applicant also sought five variances.2 The variances at issue on appeal involve: (i)
a square footage variance which requested relief from the maximum building
footprint of 40,000 square feet to permit a project containing two buildings with a
combined footprint of 52,273 square feet; and (ii) a density variance which sought
relief from 10 residential units per acre within a mixed use project to 36 units per
acre, totaling 152 residential units.3 After notice was given, a public hearing was
1
Record (“R. at __.”) at 0022-24. JAKSN, LLC owns the Property. Id.
2
Id.
3
R. at 0024.
2
held on December 22, 2022.4 At the hearing, the Applicant explained that the City
of New Castle’s Comprehensive Plan (“CP”) states that former industrial properties
in the Downtown Gateway (“DG”) zoning district are “envisioned to be redeveloped
as a new pedestrian-oriented neighborhood district supporting the CP’s goals of
encouraging mixed residential/retail/offices uses, and incentivizing private
investment in the City’s remaining undeveloped parcels and [Brownfields]
harmoniously with nearby land uses.”5 In support of the CP’s goals, the Applicant
further noted that due to the new residential unit deficiency, the Project is in “the
best interest of the City, the convenience of the community and benefit[s] the public
welfare.”6 Further, the “[P]roject would not substantially injure or detract from the
use of the neighboring property or the character of the neighborhood, but rather
would improve the aesthetic of the City’s gateway by improving a largely paved and
unimproved parcel that currently contains only the existing liquor store.”7
As to the variances at issue, the Applicant first commented that the density
variance is prompted by the CP’s desire to encourage the mixed use aspect of the
Project favored by the CP and DG zoning.8 In addition, the density variance is
“minimal in nature as evidenced by the fact that if the [P]roject were purely
4
R. at 0028-32 and 136-203.
5
R. at 0128-129.
6
R. at 0129.
7
Id.
8
R. at 0129-30.
3
residential there would be no residential density cap… under the [Zoning] Code.”9
Turning to the square footage variance, the Applicant observed that most of the
properties within the DG zoning classification could not accommodate 40,000
square foot buildings because they are all on less than one acre of land.10 However,
larger properties in the DG zone, including the Property, could accommodate more
than 40,000 square feet.11 For such properties, it is reasonable that the Zoning
Code’s 40,000 square foot limitation applies per-building as opposed to per-
property.12 If the 40,000 square foot limitation is imposed on larger properties, it
would create heavily underutilized real estate.13 A per-building limitation allows
these larger properties to take full advantage of their size.14 Additionally, the
Applicant remarked upon the unique features of the property that justified expansion
of the total building footprint including the need for remediation.15 Absent the
ability to reclaim its expenses for remediation, the Applicant declared the Project not
viable.16
9
R. at 0130.
10
Id.
11
R. at 0131.
12
Id.
13
Id.
14
Id.
15
Id.
16
Id.
4
During its business meeting, the Board noted that the Property was a
“contaminated eyesore and should be redeveloped in conformance with DG zoning
and the CP.”17 In approving the special exception, the Board reasoned that the
Project is: “(a) consistent with the CP and DG zoning; (b) similar and in harmony
with other developments in the area; (c) [] good for the City in that it [] aesthetically
improves and remediates a Brownfields site; (d) unlikely to have negative impact on
City services; and (e) conditioned upon applicant’s verified traffic data illustrating
no worsening levels of service at 7th St[reet] and Washington St[reet] intersection.”18
As to the square footage variance, the Board found exceptional practical difficulty
in making reasonable, cost effective improvements to the Property due to necessary
remediation.19 The Board also found the request not injurious to surrounding uses
and consistent with DG zoning.20 In approving the square footage variance, the
Board again found that the Property’s unique site characteristics presented
exceptional practical difficulty and the evidence established that the requested unit
count was essential to building a viable project.21 In closing, the Board concluded
that due to the fact that a majority of the Project’s units will be one bedroom and
17
R. at 133.
18
R. at 0134.
19
Id.
20
Id.
21
R. at 0135.
5
studio apartments, lower population density will be experienced, unlike with larger
apartment units.22
Shortly after the Board issued its decision, DiMondi filed a Petition for Writ
of Certiorari23 and Opening Brief.24 The Applicant, JAKSN, LLC, and the Board
(collectively, the “Appellees”) jointly filed their Answering Brief.25 After DiMondi
submitted its Reply Brief,26 the Court held oral argument and reserved its decision.
III. PARTIES’ CONTENTIONS
On appeal, DiMondi argues the square footage and density variances were
solely economically motivated and the Board erred as a matter of law in finding
exceptional practical difficulty because the variances were not “minimal” and failed
to find that the variances would not affect the public.27 DiMondi also contends the
record lacks substantial evidence to support the Board’s decision.28 In response,
Appellees contend DiMondi does not have standing to challenge the Board’s
decision.29 Second, Appellees assert the Board’s decision: (i) is not contrary to the
22
Id.
23
D.I. 1.
24
D.I. 15.
25
D.I. 16.
26
D.I. 17.
27
Op. Br. at 9-11.
28
Id. at 12.
29
Ans. Br. at 10-12.
6
public interest; (ii) does not violate any requirements that the variances be
“minimal”; and (iii) is supported by substantial evidence in the record.30
IV. STANDARD OF REVIEW
This Court hears appeals from boards of adjustment pursuant to 22 Del. C. §
382 and the Court’s review of an administrative board’s decision is limited. The
Court merely determines whether the Board’s findings are free from legal error and
supported by substantial evidence.31 Substantial evidence means such relevant
evidence as a reasonable mind would accept as adequate to support a conclusion. 32
The Court will not reweigh the evidence, determine questions of credibility, or make
its own factual findings.33 Questions of law are reviewed de novo.34 When
reviewing a decision on appeal from an agency, the Court is required to search the
entire record to determine whether, on the basis of all of the testimony and exhibits
before the agency, it could fairly and reasonably reach the conclusion that it did.35
“The burden of persuasion is on the party seeking to overturn a decision of the Board
30
Id. at 14-24.
31
Dexter v. New Castle Cnty Bd. of Adjustment, 1996 WL 658861, at *2 (Del. Super.
Sept. 17, 1996), aff'd, 692 A.2d 414, 1997 WL 123583, at *1 (Del. Mar. 5, 1997)
(TABLE).
32
Id. (citations omitted).
33
Lingo v. Georgetown Bd. of Adjustment, 2023 WL 2906162, at *2 (Del. Super.
Apr. 11, 2023) (citations omitted).
34
Id.35
Holowka v. New Castle Cnty Bd. of Adjustment, 2003 WL 21001026, at *4 (Del.
Super. Apr. 15, 2003).
7
to show that the decision was arbitrary and unreasonable.”36 During the appeal
process, “the court will consider the record in the light most favorable to the
prevailing party below.”37
V. ANALYSIS
A. DiMondi Does Not Have Standing
As a threshold matter, the Appellees argue that DiMondi does not have
standing to challenge the Board’s decision.38 “Standing” refers to the right of a party
to invoke the jurisdiction of a court to enforce a claim or redress a grievance.39 “To
establish standing, a plaintiff or petitioner must demonstrate first, that he or she
sustained an ‘injury-in-fact’; and second, that the interests he or she seeks to be
protected are within the zone of interests to be protected.”40 To determine whether
an appellant’s grievances lie within the zone of interests, the Court examines
“whether the interest sought to be protected by the complainant is arguably within
the zone of interests to be protected or regulated by the statute in question” which in
this case, seeks to “promot[e] health, safety, morals or the general welfare of the
36
Id. (citing Mellow, 565 A.2d at 955-56).
37
Id. (citing Holowka, 2003 WL 21001026, at *4).
38
Ans. Br. at 10-12.
39
Dover Hist. Soc’y. v. Dover Plan. Comm’n, 838 A.2d 1103, 1110 (Del. 2003)
(citing Stuart Kingston, Inc. v. Robinson, 596 A.2d 1378, 1382 (Del. 1991)).
40
Id. at 1110.
8
community.”41 However, grievances shared by the general public cannot be a basis
for standing, unless the petitioner can demonstrate a concrete and particularized
injury.42
DiMondi argues it is an aggrieved party with interests distinguishable from
the general public because it owns a series of properties directly across from the
Property, “which will likely see a significant increase in population and traffic,
among other things.”43 DiMondi’s grievances, however, are not distinguishable
from the general public and it has failed to assert any injury, much less a concrete
and particularized injury. Merely alleging close proximity to the Project and
potential increase in population and traffic does not demonstrate that DiMondi
suffered concrete and particularized harm.
41
Riverfront Hotel LLC v. Bd. of Adjustment of Wilm., 213 A.3d 89, 2019 WL
3884031, at *1 (Del. 2019) (TABLE). See also, 22 Del. C. § 328.
42
838 A.2d at 1113.
43
Reply Br. at 5. In reviewing the record, DiMondi voiced its grievances to the
Board via email, dated December 14, 2022, stating the “[A]pplicant seeks relief from
existing rules and regulations for their own benefit” and it is not the Board’s position
to “[overrule] these just for the financial benefit of an applicant.” R. at 0118. A
public interest in lawfulness is insufficient for zone-of-interests standing in a zoning
case. Riverfront Hotel LLC, 213 A.2d 89, 2019 WL 384031, at *2 (Del. July 11,
2019) (TABLE) (citing Citizens for Smyrna-Clayton First v. Town of Smyrna, 202
WL 31926613, at *5 (Del. Ch. Dec. 24, 2002), aff’d, 818 A.2d 970 (Del. 2003) (no
standing where neighborhood property owner’s interest “is no more than a keener
variation of the interest of every member of the public in seeing the zoning
ordinances enforced.”).
9
As to taxpayer status, at oral argument, the Appellees admitted they would not
have raised a standing argument but for the Delaware Supreme Court’s decision in
Riverfront Hotel LLC v. Bd. of Adjustment of Wilm.44 Under 22 Del. C. Section 328,
“[a]ny person … aggrieved by any decision of the board of adjustment, or any
taxpayer … may present to the Superior Court a petition, duly verified, setting forth
that such decision is illegal, in whole or in part, specifying the grounds of the
illegality.” The Riverfront Hotel Court explained that although Section 328
“seemingly provides that ‘any taxpayer’ may petition for review of a board of
adjustment decision, we do not read [Section] 328 to permit [the Appellants] to
bypass the ordinary test for standing in this case, which is one that does not directly
implicate taxation or spending.”45 Absent a showing of an interest within the zone
of interests protected by the zoning law, under Riverfront Hotel, mere status as a
44
213 A.3d 89, 2019 WL 384031, at *1 (Del. July 11, 2019) (TABLE).
45
Id. at *1 fn. 8. Prior to Riverfront Hotel, the Delaware Supreme and Superior
Courts held a person’s status as a taxpayer was sufficient for standing under Section
328. See Marriott Corp. v. Concord Hotel Mgmt., 578 A.2d 1097, 1990 WL 109878,
at *1 (Del. July 13, 1990) (TABLE) (affirming the Superior Court’s ruling that
appellants as taxpayers have standing); Wallace v. Bd. of Adjustment, 1988 WL
97899, at *1 (Del. Super. Sept. 15, 1988) (finding two natural persons had standing
as taxpayers under Section 328). Although the Court in Markert v. Bd. of Adjustment
of Rehoboth Beach concludes that Riverfront Hotel was not intended to sub silentio
overrule Marriott Corp.v. Concord Hotel Mgmt, DiMondi’s reliance on Markert is
misplaced because the Markert Court did not find standing based solely upon the
appellant’s taxpayer status. Indeed, in addition to taxpayer status, the Court found
the “[a]pplicant’s proposed hotel would negatively impact his health and safety,
which the zoning code is designed to protect.” Id. at 2.
10
taxpayer does not provide DiMondi with standing. Accordingly, DiMondi does not
have standing.
B. The Board Did Not Err and Substantial Evidence Supports its
Decision
Even if DiMondi had standing, the Board did not err as a matter of law and
there is substantial evidence to support the Board’s decision. DiMondi’s first two
challenges relate to the Board’s application of two of the four factors set forth in Bd.
of Adjustment of New Castle Cty. v. Kwik-Check Realty, Inc. (the “Kwik-Check”
factors).46 Lastly, because the Board failed to properly apply the Kwik-Check
factors, DiMondi argues that the Board’s decision is not supported by substantial
evidence.47
1. The Board’s Decision is Free from Legal Error
DiMondi initially argues the variances are not minimal as a matter of law
because the Applicant’s requests are not the least increase possible.48 In support of
its position, DiMondi concedes that the “Board need not make a separate finding
that an economically motivated variance request is minimal.”49 Yet, in its Reply
46
389 A.2d 1289, 1290 (Del. 1978).
47
Op. Br. at 12-13; Reply Br. at 6-8.
48
Op. Br. at 9 and 11. DiMondi centers the interpretation of “minimal” around the
definition used in Merriam-Webster’s Collegiate Dictionary for the word,
“minimum” (“the least possible”).
49
Id. at 9 (citing to McLaughlin v. Bd. of Adjustment of New Castle Cnty, 984 A.2d
1190, 1192 (Del. 2009) (explaining that the application of the Kwik-Check factors
11
Brief and at oral argument, DiMondi argues the exact opposite. DiMondi now
contends that the Board erred by “not engag[ing] in an analysis to determine whether
the dimensional changes were minimal….”50 Thus, DiMondi maintains that when
the sole motivation for a variance is economically based, the board of adjustment
may only grant the variance if it finds that the variance is “minimal.”
Before directly addressing DiMondi’s position, it is necessary to note that the
two variances at issue are area variances. Area variances relate to the practical
difficulty in using a particular property for a permitted use.51 To determine whether
an area variance should be permitted, the four Kwik-Check factors are applied.52
Under Kwik-Check, to determine whether exceptional practical difficulties exist, the
administrative board should take into consideration: (i) the nature of the zone in
which the property lies; (ii) the character of the immediate vicinity and the uses
contained therein; (iii) whether the removal of the restriction would seriously affect
neighboring property and uses; and (iv) if the restriction is not removed, would it
create unnecessary hardship or exceptional practical difficulty for the owner in
relation to his efforts to make normal improvements under the use provisions of the
does mandate a “separate analytic step when considering an ‘economically
motivated’ application for an area variance”).
50
Reply Br. at 11. DiMondi notes that the Board’s decision observes the Applicant’s
indication that the density variance was a minimal dimensional change. Op. Br. at
3 (citing R. at 0130).
51
Kwik-Check Realty, Inc., 389 A.2d at 1290.
52
Id.
12
ordinance.53 When a board finds an exceptional practical difficulty, it finds the
inability to improve one’s business or to stay competitive as result of area
limitations.54
Turning to DiMondi’s contention that under the fourth factor, “exceptional
practical difficulty,” a finding of minimal must also be reached. The term “minimal”
arises from the Kwik-Check Court’s statement that “[a] practical difficulty is present
where the requested dimensional change is minimal and the harm to the applicant if
the variance is denied will be greater than the probable effect on neighboring
properties if the variance is granted.”55 The Delaware Supreme Court explained this
“observation [is] a specific example of how the Board should consider the four
factors, weighing the potential harm to the neighboring properties by granting the
variance against the potential harm to the property owner by denying it.”56
Accordingly, the Board does not need to make a separate finding of “minimal” when
considering an economically motivated area variance.57 Because DiMondi’s claim
of error rests on an incorrect premise, it fails.58
53
Id.
54
Id.
55
389 A.2d at 1289.
56
984 A.2d at 1192.
57
McLaughlin v. Bd. of Adjustment of New Castle Cnty, 984 A.2d 1190, 1192 (Del.
2009).
58
Id. (rejecting an appellant’s argument that a board may not grant an area variance
solely for economic reasons unless it finds that the variance is minimal). DiMondi’s
argument also fails under its own analysis. DiMondi claims, without any support,
13
DiMondi’s second contention is that the Board failed to consider the third
Kwik-Check factor – affect on neighboring properties. This argument raises a factual
issue without regard to the record. As to the square footage variance, the Board
determined that the Property will not adversely affect neighboring properties by
considering that the removal of the restriction would not make an unwanted impact
on the neighboring properties, and that it would be good for the community to further
develop the area.59 The Board also considered the impact on neighboring properties
in relation to the density variance. Despite two Board members’ disapproval, the
Board approved the density variance after hearing the proposed configuration of the
Property, the number of residents it will attract, and that the residences will be built
vertically rather than spread across an acre of land.60 Therefore, the record
that the variances were solely economically motivated. However, the Applicant
testified, and the Board found that the density variance request was “prompted by
the CP’s desire to encourage the mixed use [sic] aspect of the project favored by the
CP and DG zoning.” R. at 0130. Similarly, as to the square footage variance, the
Board found the “request to be consistent with DG zoning and not injurious to
surrounding uses.” R at 0134. Additionally, the entire project proposal was
motivated by the goals of the CP – “encouraging mixed residential/retail/office uses,
and incentivizing private investment in the City’s remaining undeveloped parcels …
harmoniously with nearby land uses.” R. at 0128-29. Also, the Board found, among
other things, the Project consistent with the CP and DG zoning, and good for the
City because it improves and remediates a Brownfields site. R. at 0134.
Accordingly, under DiMondi’s analysis a separate finding of minimal would not be
warranted. See also, Section B.2, below.
59
R. at 0194-95.
60
R. at 0202-03.
14
sufficiently demonstrates that the Board properly applied the Kwik-Check factors by
considering the affect of the variances to the neighboring properties.
2. The Board’s Decision is Supported by Substantial Evidence
As set forth above, under the substantial evidence standard, the Court is
merely required to review the record and determine whether, on the basis of all of
the testimony and exhibits before the agency, it could fairly and reasonably reach
the conclusion that it did. It is not the Court’s position to reweigh the evidence.
After a thorough review of the record, the Court finds there is more than sufficient
evidence on the record to support the Board’s decision.
V. CONCLUSION
Substantial evidence exists to support the Board’s decision and no legal error
exists. Accordingly, the Board’s decision is AFFIRMED.
IT IS SO ORDERED.
/s/Patricia A. Winston
Patricia A. Winston, Judge
15