Change is inevitable. Projects evolve. Seemingly simple changes to approved projects can sometimes cause unexpected complications. One project we recently worked on illustrates this. A client had obtained site plan approval for a restaurant. Before beginning construction, the client desired to increase the size of the restaurant by approximately 10% and make several other relatively minor modifications to what had been specified in the site plan. There was plenty of room on site for the larger building, and there were no problems with open space, lot size, building coverage, setbacks, parking, etc. The client approached the town about how best to modify its approved site plan. The client was informed that since the time of the original approval, the zoning ordinance had been modified to include a reduction in allowable signage. Although the proposed modifications involved absolutely no changes to the proposed signage for the project, the town planner took the position that (1) the proposed changes to the approved site plan, if implemented, would forfeit the grandfathered status of the original approval, (2) the entire site plan, as modified, would now need to comply with the new zoning ordinance amendments, and (3) a new, full site plan review process would be required. Whoa!! Is that right??

New Hampshire RSA Chapter 674:39 and Harborside Associates, LP v. Portsmouth, 163 NH 439 (2012) provide guidance on how to properly analyze this situation.

RSA Chapter 674:39. provides in relevant part: “Every subdivision plat approved by the planning board and properly recorded in the registry of deeds and every site plan approved by the planning board and properly recorded in the registry of deeds … shall be exempt from all subsequent changes in … zoning ordinances … for a period of 5 years after the date of approval; provided that …active and substantial development or building has begun on the site … in accordance with the approved subdivision plat within 24 months after the date of approval, or in accordance with the terms of the approval … ” (emphasis added).

RSA Chapter 674:39 does not by its terms expressly address whether an amendment to a site plan approval that is exempt under the statute is also exempt. Harborside Associates addresses that issue. Harborside Associates involved a site plan approval for a five-story hotel with a restaurant and ground floor retail. Construction of the project began in 2009. The City adopted a new zoning ordinance that became effective on January 1, 2010. The amended zoning ordinance contained different parking requirements from those in effect at the time of the original site plan approval. On January 19, 2010, the developer submitted a revised site plan that changed the ground floor retail space to a 300-person conference center. An abutter claimed that the project needed to comply with the amended zoning ordinance because of the change to the approved site plan. The developer argued that RSA Chapter 674:39 exempted the approval (and the proposed amendment) from the amended zoning ordinance. The town agreed with the developer. The abutter appealed, and the case was ultimately heard by the NH Supreme Court.

In deciding the case, the NH Supreme Court focused on the language in the statute stating that approvals are exempt from subsequent zoning ordinance changes, provided that the project is ultimately constructed “in accordance with the terms of the approval.” The court recognized that some incidental changes are inevitable and would not forfeit exempt status. However, in so finding, the court held that RSA Chapter 674:39 exempts from subsequent zoning changes, only those amendments to approved site plans that do not alter the development to such an extent that it is no longer in accordance with the terms of the original approval. The court also noted that whether a site plan change amounts to a substantial change from the terms of the original approval will turn upon the facts and circumstances of each case. In the case of the proposed revisions to the hotel project, the Court noted that the original approved site plan, which was for a hotel, a restaurant, and retail space, did not include the construction of a conference center. The court noted that a conference center, which is designed to host large meetings, seminars, and other events, is qualitatively different from retail space, which is designed to provide a commercial environment where customers may purchase goods and services. This difference was also reflected in the zoning ordinance, where conference centers, retail space, hotels, and restaurants were different designated uses. As such, the court found that the change was materially different from what was originally proposed and was not in accordance with the terms of the original approval. Therefore, the revised site plan was not exempt from the amendments to the zoning ordinance. In the absence of express statutory language, we believe that the decision makes good practical sense.

Going back to our restaurant case, the client submitted information to the planning board that demonstrated that any increase in traffic from the expanded building would be de minimus. We argued that (1) because the use was not changing, (2) because there would be no increase in traffic, and (3) because all other modifications were only refinements to the original project – all of the proposed changes were in accordance with the terms of the original approval and that therefore the amended site plan was exempt from the changes to the zoning ordinance under the decision in Harborside Associates. The town tried to extract concessions from the developer, using delaying tactics to try to force a reduction in the approved signage. The client, in part to be a good corporate citizen and in part to move forward expeditiously with its project, negotiated a mutually satisfactory compromise on the signage issue. This may have been the right result from a practical perspective, but from a legal perspective, we were and remain convinced that under the Harborside Associates decision, the project was exempt from the new signage regulations.

This is a classic example of how sometimes a very simple, straightforward change in an approval can have an unexpected and unwanted ripple effect. When making revisions to an approved project make sure you are aware of all relevant factors that could affect implementation of the desired changes. Many times they are not obvious.