Transcript: Judge Rodgers' Referendum Ruling

The following is a transcript of Judge Philip Rodgers' ruling in 13th Circuit Court Monday on a request to issue a temporary restraining order against the proposed Pine Street development, and to certify petitons submitted to the city seeking to put building heights to a public vote. This transcript was created by The Ticker based on its recordings of the proceedings.

Judge Philip Rodgers' Ruling: Northern Michigan Environmental Action Council, T. Michael Jackson and Priscilla Townsend versus City of Traverse City

"In this case, the plaintiffs seek injunctive relief temporarily prohibiting the Traverse City commission from voting on the Pine Street special land use permit application until a referendum election is held. The goal of a referendum election would be to amend those portions of the city’s zoning code that allow a building height to exceed 60 feet. This court has jurisdiction to hear plaintiffs’ complaint for equitable relief, and the parties have standing to address the issues now before it.

The threshold issue is whether plaintiffs’ petitions were properly and timely supplemented. Section 144 of the city charter requires the preapproval of petitions as to form by the city attorney. Approval was received. Each petition also requires an attached sworn affidavit of the circulator. This was not done. Section 144 also contains curative or remedial provisions. They read as follows: ‘If found to contain an insufficient number of names of qualified electors of the city, or to be improper as to form or compliance with the provisions of this section, 10 days shall be allowed for the filing of supplemental petition papers.’

Circulators of the petitions can fail to satisfy the Section 144 requirements in three distinct ways: too few electors, an error as to form or the failure to attach the proper sworn affidavit. Each defect may be cured within 10 days. Here, the form was preapproved, and there were more than enough signatures of qualified electors. Although the petitions were signed by the circulator, no sworn affidavit was attached.

The court has already expressed its frustration at the city’s use of a form that states no additional document is needed when in fact a sworn affidavit must be attached. But the mistakes of governmental officials may not be used to estop the requirements of valid ordinances. Statutes and ordinances are interpreted according to longstanding rules. We first look to the ordinance’s plain language and give all words their common and ordinary meaning in consideration of the context in which they are used and the general purpose sought to be accomplished.

Important to the analysis of the remedial portion of Section 144 is the rule that whenever possible, a phrase should not be interpreted so as to conflict with or deny effect to any other portion of the statute. In other words, a construction should be avoided that renders any part of the statute surplusage or nugatory. Applying these rules to the petitions before the court, it is evident the affidavits were not attached and the petitions were initially properly rejected. The law also precludes their return once filed.

However, the failure to attach the affidavits is a compliance failure, and it may be remedied within 10 days. Plaintiffs did so by submitting the affidavits attached to photocopies of the original petitions. The purpose of the affidavit is to make certain the signatures are genuine and were made in the affiant’s presence. The supplemental papers accomplished this purpose and should have been accepted. No defect in the affidavits themselves having been identified, the clerk was obligated to accept and certify them. Having found the referendum petitions to have been properly supplemented, constitutional challenges to the affidavit requirement are therefore moot.

The consideration of equitable relief turns on a number of factors, including the claimed right to amend the zoning ordinance by referendum. In inverse order, the court will begin with an examination of those factors by first considering the public interest. The city asserts the public interest lies in enforcing its zoning code and its charter and protecting the deliberative rights of its commission. Plaintiffs counter that the public interest is manifestly more focused on citizens’ desire to vote for or against this very significant development by eliminating any zoning provision allowing buildings greater than 60 feet in height.

In balancing these competing public interest claims, the court is cognizant that the city’s zoning code has contemplated a 100-foot structure in the C-4 district since 1999. No such structure has been built, and arguably, this one would not be proposed absent the basket of taxpayer gifts offered the developer by the city commission. These include brownfield and tax increment financing, tax abatement and MSHDA housing grants. Whether these taxpayer-provided incentives are appropriate is a political and not a legal question. I mention them not to demean the developers, who are happy to accept them, but to frame a more salient political question. How long will the city commission continue to starve its own general fund and those of other governmental units that need the tax dollars in the quixotic quest for so-called workforce housing, when the discrimination called for to so allocate subsidized public space seems patently illegal?

In sum, if a referendum election is a viable way to address the height of buildings, the public interest would (be) in its favor. Consideration of a balance of harm by granting a temporary restraining order involves a review of the competing interests of those citizens who have signed the petitions and the developers. The city would not be harmed, but merely slowed down in its ongoing quest to erode its taxbase. The developers’ financial losses may well be significant, and the developers have no way to be compensated for those losses, as they have no vested rights.

These damages would be of far more concern if the developers’ tactical decisions had not vitiated any argument that time is of the essence. There is absolutely nothing wrong with any lawful effort to obtain a political advantage for any project or proposition. However, by withdrawing its application in September and resubmitting a materially unchanged document three weeks later, the developers may well have improved Pine Street’s political chances. If so, good for them, but in so doing the developers have forfeited any argument that time is of the essence. The balance of harm favors the public if they have been denied a lawful right to vote.

Irreparable harm and an adequate remedy at law are factors relevant to the analysis of every request for injunctive relief. Here, if there is an adequate remedy at law, there can be no irreparable harm. Plaintiffs distinguish the appeal of a SLUP hypothetically favoring Pine Street from a claimed right to amend a portion of the zoning ordinance by referendum before Pine Street rights become vested. Without question, any party with standing to do so may timely appeal a commission decision granting or denying the SLUP. The appeal is administrative and governed by long-recognized standards. Since no decision has been made by the commission on the Pine Street project, consideration of it at this time by this court would – absent the referendum issue – fail, as the issue is not right and would result in an improper intrusion by the court into the legislative actions of the commission.

This discussion leads us then finally to the dispositive question raised by plaintiffs’ complaint and the defendant’s answers. Do the citizens of Traverse City have a lawful right to amend the building height portions of their zoning code by referendum? A determination of a likelihood of success on the merits must be made in the context of this question. As already noted, the court has found plaintiffs’ petitions were properly supplemented. If the right to such a referendum exists, then allowing the commission to act without regard to a scheduled election may well merit injunctive relief pending an analysis of the election date relative to the developer acquiring vested rights.

The parties’ rights here are controlled by state law. The amendment of the city’s zoning code may only be accomplished in the manner provided by the Michigan Zoning Enabling Act as it was revised in 2006. Following the 2006 promulgation of that act, the Michigan Supreme Court reviewed the role of municipalities and zoning in the 2013 decision Maple BPA versus Bloomfield Charter Township. There, the Supreme Court held that municipalities have the authority to regulate land use through zoning only because the legislature has specifically granted them that authority in the Michigan Zoning Enabling Act. Thus, the court held that a municipality can exercise zoning authority only to the limited extent authorized by that legislation. Section 3202 (part) one of the act states that ‘amendments or supplements to the zoning ordinance shall be adopted in the same manner as provided under this act for the adoption of the original ordinance.’ For this reason, all counsel agree that a municipal zoning ordinance such as Traverse City’s cannot be amended by citizen initiative.

If initiative is foreclosed, may citizens amend the ordinance by referendum? Prior to 2006, it was generally recognized that citizens could challenge the entirety of an ordinance or the entirety of an amendment to a zoning ordinance by referendum. The 1959 Michigan Supreme Court case of Reva versus Portage Township only held a statute could not contemplate a referendum on a portion of an amendment. Section 143 of the city charter distinguishes referendum from initiative as follows: ‘An ordinance may be initiated by petition, or a referendum on an ordinance enacted by the city commission may be had by a petition.’ A referendum as described in the Traverse City charter contemplates a citizen vote on the entirety of an ordinance or amendments to an ordinance passed by the city commission. The Reva analysis regarding a referendum on part or all of amendments to a zoning ordinance is overshadowed by the subsequently enacted Michigan Zoning Enabling Act. Section 3402 of that act allows a referendum on a township or county zoning ordinance. But notice of the challenge must be filed within seven days of promulgation, and signatures gathered within 30 days. The arguable time for a referendum on the city’s 1999 amendments has long passed.

Further, Section 3402 only applies to county and township zoning. Municipalities and villages are addressed in the very next section, 3403, which was enacted at the same time. There, municipal and village zoning ordinances and amendments are not subject to a referendum election, but instead to a protest petition process. Filing the requisite number of petitions does not trigger an election, but the requirement that the legislation pass by a supermajority vote. This remedy must be implemented before final legislative action.

In summary, Michigan law prior to 2006 including the Reva decision and the Traverse City charter allowed a referendum on the entirety of an ordinance or the entirety of amendments to it. So, in 1999, when these amendments involving the height of buildings were promulgated, petitions promptly filed could have caused a referendum to be held on all the 1999 amendments. Today, or at least since 2006, a referendum on all or part of amendments to a zoning ordinance in a municipality or village is precluded by Section 3403. A protest petition process has been established in its place. The plaintiffs’ hope to delete buildings of a height greater than 60 feet from the zoning code at this time can be accomplished neither by initiative nor referendum. Even if Section 3402 were read to include municipalities and villages, which it clearly does not, the time limits have long since passed.

In conclusion, plaintiffs’ petitions were properly approved as to form and certified as to the appropriate number of qualified electors. The constitutionality of the requirement that a sworn affidavit be attached need not be addressed as the petitions were completely and lawfully supplemented consistent with the remedial portion of Section 144. And finally, while the equities almost invariably favor an election in such circumstances, Michigan law does not allow one in this narrow area of municipal legislation.

Accordingly, this court will not interfere in the timing of the commission’s legislative deliberations on the Pine Street SLUP application. But – in anticipation of an appeal by either side, I strongly suggest particular attention be paid to those detailed factual findings relevant to Section 1364.02 regarding harmonious compatibility with the intended character of the neighborhood, recalling that all words have meaning and none are to be rendered surplusage. Finally, if any commissioner or the developer believe they can discriminate in favor of downtown workers in the leasing of publicly subsidized housing, as opposed to other eligible low-income persons, the law on that point should clearly be developed.

The motion for a TRO is denied. No costs or fees will be taxed on this public question. This opinion resolves all issues raised, and the case is hereby closed."