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The applicable standard of review in a zoning case is based on the finding that the zoning power is not unlimited; the power to zone derives from the police power of the state, and zoning ordinances must therefore bear a reasonable relation to goals properly pursued by the state through its police power. A strong presumption exists in favor of the validity of local zoning ordinances. The burden of proving that the ordinance is invalid rests upon the party challenging its validity and the presumption in favor of validity can be overcome only by a clear showing that the ordinance as applied is confiscatory, arbitrary, unreasonable and capricious. Where there is a basis for a reasonable difference of opinion, or if the validity of legislative classification for zoning purposes is debatable, a court may not substitute its judgment for that of the local zoning authority.
In 1973, the City of Hailey and McCulloch Properties, Inc. (MPI), the predecessor to appellant Sprenger, Grubb & Associates (SGA), entered into a development agreement designating 12.6 acres of land as "business." In 1993, the city rezoned the land as "limited business." SGA challenged the City’s zoning reclassification, arguing that the development agreement between the City and MPI was a bonding contract, wherein the City agreed to a regulatory freeze, or to zone consistent with MPI's development plan. SGA contended that the rezoning was a breach of the development agreement. The district court upheld the City’s zoning reclassification. SGA appealed.
Did the zoning reclassification violate the development agreement between the City and MPI?
On review, the court held that the rezoning did not breach the development agreement, which did not include any language amounting to a regulatory freeze or agreement for permanent zoning. According to the court, the restrictions imposed by the rezoning did not constitute a taking of property without just compensation under either the U.S. Const. or the Idaho Const. The court held that SGA did not demonstrate detrimental reliance upon the existence of the business zoning. The rezoning ordinance bore a reasonable relation to goals properly pursued by the city through its police power. The rezoning did not deny SGA procedural due process and was not the result of an unlawful procedure. The court found that the city's factual finding that the rezoning was not inconsistent with the its comprehensive plan was not clearly erroneous, nor was the rezoning arbitrary and capricious, because the record supported the city's contention that its actions were decided in accordance with the plan.