Neighbors First for Bywater, Inc. v. The City of New Orleans

         APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2016-06148, DIVISION "B" Honorable Regina H. Woods, Judge

          Scott M. Galante Salvador I. Bivalacqua Lauren M. Bergeron GALANTE & BIVALACQUA, LLC FOR PLAINTIFF/APPELLANT

          Cherrell S. Taplin SENIOR CHIEF DEPUTY CITY ATTORNEY Adam J. Swensek, CHIEF DEPUTY CITY ATTORNEY Daniel T. Smith ASSISTANT CITY ATTORNEY Tanya L. Irvin ASSISTANT CITY ATTORNEY Rebecca H. Dietz CITY ATTORNEY FOR DEFENDANTS/APPELLEES

          Roy C. Cheatwood Matthew A. Woolf Meghan E. Carter BAKER DONELSON BEARMAN CALDWELL & BERKOWITZ, PC Ike Spears SPEARS & SPEARS FOR DEFENDANTS/APPELLEE, PELICAN ROYAL, LLC

          Court composed of Judge Joy Cossich Lobrano, Judge Sandra Cabrina Jenkins, Judge Paula A. Brown

          Paula A. Brown, Judge

          This matter arises out of Appellee's, the City of New Orleans, through the New Orleans City Council ("the City Council"), decision to grant a Conditional Use Permit to Appellee, Pelican Royal, LLC ("Pelican Royal"). Appellants, Neighbors First for Bywater Inc., John Andrews, Georgia Ainsworth, Lane Lacoy, Bart Theriot, Joe Brown, and Kathy Brown (collectively, "Appellants"), argue that the district court erred in denying its appeal of the City Council's decision. For the reasons that follow, we affirm the judgment.

         FACTUAL AND PROCEDURAL BACKGROUND

         On January 4, 2016, Pelican Royal submitted an application to the City Planning Commission ("the CPC") for a Conditional Use Permit to build and operate a hotel/hostel ("the Project") for property located in the historically designated Bywater District of New Orleans. Before the hearing, the CPC Staff reviewed the application and recommended its approval, subject to fourteen provisos to address community concerns.

         On March 22, 2016, the CPC held a hearing, wherein parties were able to voice their opinion in support of or in opposition to the Project. David Wool worth-Pelican Royal's acoustics and noise control consultant-told the CPC that he had been recently retained to conduct a noise analysis. He explained that it was the developer's intention to minimize noise; however, he acknowledged that his report on the noise levels was incomplete. Other supporters of the Project said the Project would spur economic development, and bring amenities to the community-such as a coffee shop and a laundromat.

         In contrast, the opponents to the Project argued that the Project was out of scale and did not fit the character of the neighborhood. Opponents raised concerns about the increased noise that would be generated by visitors to the Project and traffic congestion in the surrounding area. The opponents also questioned whether the Project would encourage community residents to convert their homes into short-term rentals.

         After hearing public comments, the CPC voted to deny the application by a vote of seven to zero. The CPC provided the following "Reasons for Recommendation, " outlining their denial of the Project:

1. Despite the attempts from the applicant to address the concerns of neighbors, the development proposal is out of scale with the neighborhood.

2. The sound study done by the applicant's consultant is not complete so the true noise impact cannot be accurately evaluated.

3. There were some concerns raised by the Commissioners that the hotel would contribute to the trend of displacement of long-term residents in the area in favor of transient housing.

         Shortly after the denial by the CPC, Pelican Royal applied to the City Council to have the decision of the CPC reversed.^[1] The hearing was held on May 19, 2016.

         Eight people spoke in favor of the Project, including Pelican Royal representatives. The representatives explained that the Project's scale had been modified to address concerns voiced by residents and the CPC in its recommendation for denial. They specifically referenced the reduction of the Project's size by several thousand square feet and the implementation of a noise abatement plan. Their acoustics consultant expert, Mr. Woolworth, provided an updated sound/noise level report that addressed methods to reduce noise levels. Supporters disputed that the Project would result in displacement of residents. They noted that the Project's proposed location was currently a vacant lot and stressed the Project's objective is to bring employment opportunities to the community and generate revenue. Neighborhood supporters also emphasized that the Project would attract more businesses, expand the tax base, and create jobs.

         Four opponents spoke against the Project and underscored that the Project would negatively impact the community's quality of life. They reiterated concerns previously voiced at the CPC hearing, including excessive noise levels, the scale of the Project, parking availability, and traffic congestion. Residents expressed doubts that Pelican Royal could control noise or crowd levels. They also complained that they had just recently received Pelican Royal's updated noise level report; consequently, they challenged the report's validity and requested more time to review its conclusions.

         Each City Council member offered their respective views on the Project. Councilmember Ramsey-in whose district the proposed Project is located-stated that she and her staff had met with the developers and the residents on multiple occasions. Councilmember Ramsey noted that the Bywater District is historically a mixed use neighborhood with industrial and commercial uses. She explained that:

The lots at issue and the conditional use are zoned "HMC-2 commercial." The definition of "HMC" states that it is intended to permit more intense commercial uses especially on major traffic arteries. Some of the design and use-design goals and use of the land use plan of the Master Plan-are to have retail and other uses at neighborhood edges on under-utilized industrial commercial land, to establish gradual transitions between small scale and larger scale developments, to promote infield development on vacant lots in existing neighborhoods, to design mixed-use neighborhood centers on large sites, such as under-utilized or vacant retail or industrial parcels which integrate large mixed-use sites into the surrounding street grid. This project meets all of those goals in many ways. It's a former industrial site that has been vacant for years. It has a mix of uses: a restaurant, community space, laundromat, coffee and juice bar; it will employ at least 50 people and the applicant has worked very hard and has committed to work with training programs and to hire locally.

         Councilmember Ramsey acknowledged some initial reservations about the Project, which caused her to ask Pelican Royal to submit more detailed plans. She also added provisos which were more restrictive than the fourteen recommended in the CPC Staff Report. She noted that Pelican Royal agreed to seventeen provisos suggested by the City Council, some of which included: a noise abatement plan approved by the Department of Safety and Permits; architectural design plan approval by the Historic District Landmarks Commission (HDLC); a complete Stormwater Management Plan; revised landscaping plans; installation of short-term bicycle parking spaces; limitations on signage; a litter abatement plan approved by the Department of Sanitation; limitations on amplified noise in common areas; limitations on bar operating hours; and limitations on capacity in outdoor areas.

         Councilmember Ramsey disputed that the Project included any outdoors mega-bar and commented that the Project also included more parking spaces than required. After careful study of the Project, the goals of the Master Plan, and the addition of her recommended provisos, Councilmember Ramsey concluded that the Project's proposed use fit into the Bywater District mixed-use neighborhood, and the goals of the Master Plan. She, then, moved to approve Pelican Royal's request for the Conditional Use Permit.

         Councilmember Williams lauded Pelican Royal for its efforts to respond to community concerns. However, he said he was compelled to say "no" to the Project. He cited the Project's prime location and questioned whether its use, which catered to tourists, made sense for Bywater residents.

         Councilmember Head noted the Project's proposed location was presently on vacant land. She determined the Project's intended use did not contradict the City's Master Plan and was allowed by law; accordingly, she stated that she would vote for the Project.

         Councilmember Gray also supported the Project. He stressed that business people should be able to review the City of New Orleans' ("the City") regulations and have some predictability about the City's decision-making process. He also explained that the Project would create jobs and increase the City's tax revenue.

         Councilmember Guidry, likewise, stated her support for the Project. She believed the developers were "straight shooters." She concluded the Project would help the neighborhood, the provisos were thoughtful, and the overall proposal fit with the Master Plan.

         Councilmember Cantrell acknowledged the community was divided over the Project. She favored the Project, after weighing the residential and commercial interests, considering the Master Plan, and acknowledging that the Bywater area was zoned for the use proposed by the Project.

         Councilmember Brossett also expressed support for the Project. He highlighted the positive economic impact of the Project and that property on vacant lot would be returned to commerce.

         At the end of their discussion-and after hearing from opponents and supporters of the Project-the City Council passed Motion Number M-16-206 ("the Ordinance") to grant Pelican Royal a Conditional Use Permit, by a vote of six to one. Councilmember Jason Williams opposed the motion.

         On June 17, 2016, Appellants filed a "Petition For Declaratory Judgment and Injunctive Relief And For Issuance Of Writ Of Review And/Or Certiorari" (the "Petition") in the Civil District for the Parish of Orleans to review the City Council's decision.^[2] The Petition named the City, through its City Council, as a defendant.^[3] In the Petition, Appellants asserted the City Council's decisionmaking process violated the City's Comprehensive Zoning Ordinance ("the CZO"), the City's Master Plan, and represented a clear abuse of discretion. Appellants' prayer for relief included the following: 1) a declaratory judgment finding the changes approved by the City Council null and void; 2) alternatively, reversal of the City Council's decision and a remand to the appropriate City agencies to review in accordance with appropriate procedures; 3) issuance of an injunction to suspend the passing of any ordinances regarding Pelican Royal's Conditional Use Permit; 4) rendition of a declaratory judgment finding that the City acted in violation of the Louisiana Constitution, the laws of the State of Louisiana and the City of New Orleans; and 5) issuance of a judgment declaring that the City and its administrative agencies exceeded their authority and acted arbitrarily and capriciously in granting the Conditional Use Permit. In response to Appellants' Petition, Pelican Royal filed a "Petition for Intervention" to protect its rights and enforce its interests.

         The district court ordered the City, Pelican Royal, and the Appellants to provide briefs prior to the hearing. After submission of the briefs, the district court heard oral argument on October 14, 2016; and following the hearing, took the matter under advisement following the hearing. On November 22, 2016, the district court rendered its Judgment and Incorporated Reasons for Judgment, which denied Appellant's appeal. The judgment and its incorporated reasons stated, in pertinent part:

For the reasons provided, and in accordance with the statutory and jurisprudential authorities, it is HEREBY ORDERED, ADJUDGED, AND DECREED that ...