                                      STATE OF VERMONT

                                    ENVIRONMENTAL COURT

             In re: Appeal of Jolley Associates     }
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                                                    }   Docket No. 118-8-01 Vtec
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                          Decision and Order on AGood Faith@ Issue

   Appellant Jolley Associates appealed a decision of the Zoning Board of Adjustment (ZBA) of
the Town of Shelburne, applying the amended zoning ordinance rather than the 1995 zoning
ordinance to their application, upon remand of the application to the ZBA after decision by the
Vermont Supreme Court in In re Handy and In re Jolley Associates, 171 Vt. 336 (2000).
Appellant-Applicant is represented by Howard J. Seaver, Esq.; and the Town of Shelburne is
represented by Joseph S. McLean, Esq.

    By agreement of the parties, the merits of this matter were bifurcated, so that the Court first
would consider and rule on whether the application was A validly brought and pursued in good
faith,@ as required by the Vermont Supreme Court in its decision, and then if necessary would
schedule a further evidentiary hearing on the merits of the application. This first stage of the case
was submitted to the Court after an evidentiary hearing and the filing of legal memoranda. Upon
consideration of the evidence and memoranda, the Court finds and concludes as follows on the
issue of A good faith.@

    The Planning Commission met in September and in the fall of 1996 to discuss the preparation
of zoning bylaw amendments, but those amendments were not drafted or prepared for public
discussion at that time.

   On December 3, 1996, the Town published notice of a December 19, 1996 Planning
Commission hearing to consider proposed zoning bylaw amendments. One of these amendments
proposed to eliminate the use category of A gas station@ use in the Residential-Commercial
zoning district.

   At the December 19, 1996 Planning Commission hearing, the Planning Commission voted to
recommend to the Selectboard that the amendments be adopted.

   On January 5, 1997, the Selectboard published notice of a January 21, 1997 public hearing to
consider the proposed zoning bylaw amendments.

    The minutes of the January 21, 1997 public hearing of the Selectboard reflect that a
representative of another developer asked a A procedural question@ regarding an application
including a gas station denied in July 1996 which he described as being A in the process of
reworking.@ The minutes state as follows:

It is his understanding that if these [zoning bylaw] revisions are adopted the Selectboard will have
to hear a request for the new proposal [to] move forward in the approval process. He asked when
the appropriate time will be to do this. [Town Planner] Bortz explained [that] this situation is
addressed by state statute, and she is working with the Town= s attorneys on the specifics of how
to handle this. She said if these revisions are passed at this meeting they will go into effect in 21
days. Any applications filed during the 21 day period must be heard by the Selectboard.
(Emphasis added).

                                                                                   1
    The Astate statute@ referred to in the minutes is 24 V.S.A. ' 4443(c) as then in effect. On
page 3 of the minutes, Ronald I. Bouchard, representing Pizzigalli Investment Co. (owner of the
Shelburne Meadows Business Park), stated that Pizzigalli was under contract to sell the property
at issue in this case to Appellant, and that

they are nearly ready to make a presentation for a gas station facility. He asked, procedurally,
what can be done. [Town Planner] Bortz answered that if the revisions are adopted following
this hearing, an application would have to be heard by the Selectboard. If the revisions are
not adopted, or if the hearing is continued, an application would take the current route. (Emphasis
added).

At the January 21, 1997 meeting of the Selectboard, a majority of the Selectboard voted to adopt
the proposed zoning bylaw amendments. Pursuant to 24 V.S.A. ' 4404(c), the adopted zoning
bylaw amendments became effective February 11, 1997.

    In In re Handy and In re Jolley Associates, 171 Vt. 336 (2000), the Supreme Court struck
down 24 V.S.A. ' 4443(c) as providing no standards for the Selectboard review of an application
during the time before the effective date of the zoning bylaw amendment. The Supreme Court
remanded for the ZBA in the first instance to apply vested rights jurisprudence and to determine
whether each appellant= s application was > validly brought and pursued in good faith,= sufficient
to entitle the applicant to proceed under the older zoning ordinance. The Supreme Court noted as
to Jolley Associates= application that because it A came later in the process, its burden to show
that it did not engage in a race to put in some development proposal before the ordinance
became effective is much higher.@

   Jolley Associates (Appellant) is a real estate holding company in Vermont that owns 41
gasoline stations, of which 30 have convenience stores. A related company, S.B. Collins, is the
petroleum distributor that supplies gasoline and diesel fuel to Appellant= s stations. Appellant
operates 22 of the gas station/convenience stores itself; the rest are operated by lessees. It has
opened at least one a year for the last fifteen years. Since the mid- to late- 1980s, it has included
a deli, sit-down restaurant, or take-out food service in the convenience store wherever possible. It
does not own one in Shelburne, but prior to 1996 had been looking for a suitable property in
Shelburne. Prior to 1996, Appellant had looked at three properties in Shelburne, none of which
was suitable.

   In the early part of 1996, Steven Smith, vice-president and general manager of S.B. Collins
and working on behalf of Appellant, heard that a suitable lot might be available in the business
park owned by Pizzigalli Investment Properties (Pizzigalli) at a signalized intersection on Route 7,
near the new location for Almartin Volvo. He approached Bob Bouchard at Pizzigalli to discuss
the matter. Appellant had done some joint ventures elsewhere in the state with McDonald= s, and
Mr. Smith also contacted a representative of McDonald= s at that time. They discussed a 52-seat
restaurant and convenience store. McDonald= s was interested in doing a joint venture with
Appellant at this location, and provided Appellant with so-called out-of-the-box standard plans for
a building containing a 52-seat restaurant and convenience store, and one for a building
containing a 77-seat restaurant and convenience store. These plans were for the buildings only,
and were not site-specific.

   Appellant then contacted an engineer, who prepared site-specific plans in mid-April 1996,
meeting the setbacks and other requirements of the Shelburne zoning regulations. Appellant had
a purchase and sale agreement with Pizzigalli for the lot at that time, with a closing date in July of
1996. While Appellant was hopeful of concluding an arrangement with McDonald= s, Appellant
was prepared to go ahead with the site with or without McDonald= s, and intended to set a
construction date in the Spring of 1997..

   As of the July 1996 closing date, negotiations with McDonald= s were still ongoing, so
Appellant opted to extend the purchase and sale agreement, for an additional payment of $5,000.
McDonald= s had concerns about the proposed distance of the building from the road and the
proposed signage. Accordingly, Mr. Bouchard from Pizzigalli requested a meeting with the town
planning and zoning officials to discuss the project. That meeting was held in late September
1996, and included Mr. Bouchard for Pizzigalli, Mr. Smith and Appellant= s attorney for Appellant,
an engineer and real estate manager representing McDonald= s and Ms. Kate Bortz and Mr. Bill
Youngblood from the Town= s Planning and Zoning departments, respectively.

   The September 1996 meeting lasted about an hour, at which those present discussed the
proposal for a gas station, convenience store and McDonald= s restaurant, including the site-
specific plans for the property and the elevation drawings of the standard McDonald= s buildings.
They discussed the types of signs and the setback of the buildings. The Town= s representatives
discussed that the Town= s policy was firm regarding its sign ordinance, that the lot probably
would not qualify for a variance from the setback requirements, and especially that the applicants
might want to consider a less standard building design. They discussed the architecture of the
Almartin Volvo building nearby, and its approval in the Town= s zoning process. There was also
some problem with approval of a drive-through window or lane. The McDonald= s representatives
planned to discuss the project, including the architecture and signage, with their regional office.

   The first working meeting of the Planning Commission to consider regulatory changes for the
Residential-Commercial zoning district also occurred at about the same time, on September 24,
1996. The Town officials did not mention the possibility of zoning changes for the district at the
meeting with Appellant. It is not the practice of the Planning Commission or the Town= s planning
staff to discuss regulatory changes with the public at this early a stage of their development.

   Within a week of the meeting, the McDonald= s representatives informed Appellant that
McDonald= s was no longer interested in this project. At some time in the fall of 1996, Pizzigalli=
s representative Bob Bouchard may have mentioned in passing to Ms. Bortz or Mr. Youngblood,
the town zoning and planning officials, that the deal with McDonald= s had fallen through. While
Mr. Bouchard understood that Appellant was still considering the project, either with another fast
food chain or on its own, he did not discuss the details of Appellant= s continued planning for the
project with the town officials, and they were unaware of any continued work on Appellant= s part
towards pursuing the project.

   Appellant then proceeded to consider other fast food chains which might be possible as
partners for the site. Mr. Smith= s last discussion with representatives of an alternative national
fast food chain was with a Taco Bell representative on November 13, 1996; that discussion did
not result in a > deal.= Mr. Smith then discussed the project with Bob Jolley, a principal of
Appellant, who directed him to move forward with the project and to hire an architect to design the
building. If the discussion of the design and architecture of the building had not been the focus of
the September 1996 meeting with the Town officials, Appellant might have considered hiring an
architect in any event, but instead might have considered using plans already designed for its
buildings elsewhere in the state. The next closing date was approaching at the end of November,
1996, and Appellant again opted to extend the purchase and sale agreement to a closing date of
March 27, 1997, for an additional payment of $5,000, still intending to begin construction in the
Spring of 1997.

   Appellant hired Tom Cullins as the architect for the project because he had designed several
projects in Shelburne that had been approved in the zoning process and had been mentioned in
the September 1996 meeting. Approximately November 24, 1996, when meeting with Mr.
Bouchard from Pizzigalli to extend the contract, Mr. Smith asked Mr. Bouchard to set up a
meeting with the architect. The meeting took place on December 3, 1996, with Mr. Cullins, Mr.
Smith, Mr. Ron Bouchard and Mr. Bob Bouchard, at the offices of Pizzigalli. Mr. Smith mentioned
to Mr. Cullins that the Town seemed to be happy with the Almartin building, and directed Mr.
Cullins to design a > unique and different= building that would be acceptable to the Town for that
lot.

   As of the date of that meeting, Appellant= s representatives were not aware that the Planning
Commission were publishing a notice of a public hearing on zoning changes that would prohibit
gas stations as an allowed use in this zone. Mr. Ron Bouchard advised Mr. Smith of that notice
and the scheduled Planning Commission hearing shortly thereafter. Appellant did not change any
aspect of its project and did not change its instructions to the architect based upon learning of the
proposed ordinance change.

   Mr. Smith did not attend the Planning Commission or the Selectboard meeting on the
proposed ordinance change; he knew that Mr. Ron Bouchard was planning to attend. Mr. Smith
met again with the architect on December 17, 1996, reviewed the fees and schedule, and
discussed that Appellant wanted to begin construction in the Spring of 1997. They met again on
January 9, 1997 (postponed from January 6 by the architect= s schedule) with another architect
in Mr. Cullins= firm who would be handling the direct design work; and again on January 15, to
look at preliminary drawings and renderings. Mr. Smith took these to show Mr. Jolley, and
Appellant went forward with the project. At some time in January Mr. Smith became aware that
the Selectboard had approved the amended zoning regulations at its January 21, 1997 meeting,
that the new regulations would prohibit two of the three planned uses for the project, and that the
new regulations= effective date was February 13, 1997. He understood that the application had to
be filed before that effective date to be considered under the old regulations. He directed the
architects to have the application filed before that date; it was filed on February 6, 1997. Appellant
then purchased the property.

   This course of conduct evidences that Appellant developed the concept for and plans for the
project, and had substantial work done and expended funds in furtherance of the project, well in
advance of Appellant= s actual knowledge of the proposed regulation amendment and prior to the
beginning of the > pendency period,= even as counted under the former 24 V.S.A. ' 4443(c), both
approximately December 3, 1996. We conclude that Appellant has met its admittedly high A
burden to show that it did not engage in a race to put in some development proposal before the
ordinance became effective.@ In re Handy and In re Jolley Associates, 171 Vt. 336, 351 (2000).

    The Town argues that the Court should apply the > pending ordinance= exception to
Vermont= s vested rights doctrine, as recently applied by the Vermont Environmental Board in
John A. Russell Corporation and Crushed Rock, Inc., Land Use Permit #1R0489-6-EB(Remand)-
EB (January 17, 2002). While that doctrine is a valuable policy analysis, it should not be applied
automatically to block consideration of the application under the old regulation in this case.
Rather, we must determine from the sequence of events in this particular case whether this
particular applicant acted in good faith. At the time the application was made, the former version
of 24 V.S.A. ' 4443(c) was in effect and the parties were entitled to act according to its provisions
to file an application for review by the Selectboard during the > pendency period.= If the new
regulation were to apply automatically (as it does under the new version of what is now ' 4443(d)),
then the application could not have been considered on its merits as the proposed uses would
have been prohibited in the district. If that had been the case, the assurances given to the
applicant during the January 21, 1997 Selectboard meeting, that the Selectboard would consider
the application if it was filed at any time until the effective date of the new ordinance, would have
been meaningless. As the Supreme Court explained in its decision in this matter, the filing of an
application very late in the ordinance amendment process may raise an inference or even a
presumption that the application was not filed in good faith. But that inference or presumption is
rebuttable, not absolute. It may be overcome by evidence to the contrary, as has been done here.
  Based on the foregoing, it is hereby ORDERED and ADJUDGED that Appellant= s 1997
application was validly brought and pursued in good faith, and that Appellant is entitled to have its
application considered on its merits under the older version of the zoning ordinance.

                                   th
     Dated at Barre, Vermont, this 7 day of March, 2002.




___________________
Merideth Wright
Environmental Judge




                                             Footnote

1.
   This section was struck down by the Vermont Supreme Court in its decision issued on
November 17, 2000 in In re Handy and In re Jolley Associates, 171 Vt. 336 (2000). The currently-
applicable state statute was adopted in the 2001 legislative session, 24 V.S.A. §4443(d). Rather
than establishing standards for the selectboard review in the former statute, it now provides that
applications filed during the five months (150 days) after the public notice of the first public
hearing before the legislative body on a zoning bylaw amendment must be reviewed under the
proposed bylaw. If the bylaw is not adopted or takes longer than the 150 day period, then the
applicant may opt to have the application reviewed under the old bylaw at no additional expense.
