Land & Renewables Connection

AUUE, Inc. v. Borough of Jefferson Hills Zoning Hearing Board

In a July 17, 2024 Opinion, the Pennsylvania Supreme Court decided in AUUE, Inc. v. Borough of Jefferson Hills Zoning Hearing Board, No. 28 WAP 2022, ___ A.3d ___ (Pa. 2024), that the Pennsylvania Municipalities Planning Code and a municipal zoning ordinance authorized a zoning officer to issue a zoning use permit to a property owner who was seeking a determination that a proposed medical center was authorized “by right” without the zoning officer requiring the applicant to first comply with all aspects of the zoning ordinance (Ordinance). Although the AUUE Court was careful to limit its holding to the narrow question of the zoning officer’s authority to issue the permit, the practical application of the AUUE decision may be problematic because of potential misunderstandings about the relief being sought from a zoning officer or the breadth of a zoning officer’s decision in such a scenario.

The General Background

The facts at the heart of the AUUE decision unfold in Jefferson Hills, a suburban municipality south of Pittsburgh. AUUE owned 5 contiguous parcels of land in Jefferson Hills and sought to develop its “UPMC South” medical facility on that property. The borough had a zoning Ordinance and associated zoning map which identified AUUE’s 5 parcels being within the municipality’s Office Park zoning district, the Highway Commercial zoning district, and the Residential-Agricultural zoning district. Id. at *2. The Ordinance authorized “hospitals” and “medical clinics” as permitted uses “by right” in the Office Park zoning district. Id. at *2. “In zoning terminology, the term ‘permitted use’ generally refers to those uses allowed absolutely and unconditionally.” Lex v. Zoning Hearing Board of Hampton Township, 725 A.2d 236, 237 (Pa. Commw. Ct. 1999).

In 2018, AUUE filed its Zoning Application with Jefferson Hills for the UPMC South development which would consist of a “[m]edical [c]enter comprised of a [h]ospital, [a] [m]edical [c]linic, [m]edical [p]rofessional [o]ffices, and a [h]elipad as an accessory use.” AUUE at *2. The Zoning Application listed all 5 of AUUE’s parcels, but identified the Office Park zoning district ‘as the current zoning classification’ for the Property.” Id. at *2. AUUE appended its proposed UPMC South plan to the Zoning Application. That proposed plan depicted:

• the medical center entirely within the Office Park zoning district;
• a staff parking lot on a parcel that was split-zoned between the Office Park zoning district and the Residential-Agricultural Zoning District;
• a parking lot in a parcel entirely within the Office Park zoning district;
• no development on the two lots entirely zoned as Residential-Agricultural, other than a potential use as an access road which could connect to another access road leading to a parking lot.

Id. at *2. The Zoning Application was submitted on a form bearing the header “Application for Temporary or Final Zoning Approval for Occupancy and Use [a]nd Certificate of Use and Occupancy.” Id. at *2. Despite the form’s broad title, “AUUE made clear that the Zoning Application was ‘only for zoning approval and not for occupancy.’” Id. at *2.

After some back and forth interactions with AUUE, the Jefferson Hills zoning officer approved AUUE’s Zoning Application, subject to certain conditions. Id. at *2. The zoning officer’s approval letter to AUUE (Use Permit) stated that:

This approval applies to ZONING ONLY and shall not relieve [AUUE] from obtaining other such approvals and permits as may be required by [the] Ordinance including, but not limited to, those identified below. Further, the issuance of this permit is conditioned specifically on the following:

• The MEDICAL CENTER use (comprised of hospital, medical clinic, and medical professional offices), with a helipad as an accessory use, is approved for the parcels indicated on the [zoning] permit, within the O-P ... District.

• No development activity may occur on the site until [AUUE] secures approval for land development from the Borough.

• Issuance of this zoning permit does not relieve [AUUE] of any requirements of the ... Ordinance as part of the land development application review process required by the Borough[’s] Subdivision and Land Development Ordinance [(SALDO)].

• No grading or earthwork activity may occur on the site until [AUUE] secures a grading permit or land development approval from the Borough.

• No building construction may occur until [AUUE] secures a building permit from the Borough.

• This [zoning] permit shall expire twelve months from the date of issuance as indicated by the date of this letter, above.

AUUE at *3. According to the zoning officer, the approval of AUUE’s Zoning Application was a “use permit” and not a “full zoning permit”, leaving additional zoning issues open for future review. Id. at *3. The Supreme Court summarized that posture by writing that “[i]n other words, although [the zoning officer] acknowledged that AUUE's Zoning Application did not fully comply with the Ordinance's requirements, the Zoning Officer did not consider any violations of the Ordinance when he issued the zoning permit to AUUE and, instead, only considered whether AUUE's proposed medical center was a use permitted by right in the [Office Park] District in which the Property is located.” Id. at *3.

Setting the Scene for the Supreme Court

Nearby residents appealed the Use Permit to the Jefferson Hills Zoning Hearing Board, which reversed the zoning officer’s decision. AUUE at *4. The Zoning Hearing Board concluded that the zoning officer had misinterpreted the zoning ordinance which purportedly provided for only one hospital in the municipality (which already existed), that the zoning officer “. . . exceeded the scope of his authority under Section 614 of the Municipalities Planning Code and Section 1201.2 of the [Zoning] Ordinance when he granted AUUE a use permit for the Property without first ensuring that the Zoning Application complied with all relevant provisions of the Ordinance”, and that “ . . there were numerous violations of the Ordinance apparent on the face of AUUE's Zoning Application, each of which served as a basis for it to deny the Zoning Application.” AUUE at *3-4.

The Zoning Hearing Board’s decision was appealed to the Allegheny County Court of Common Pleas which affirmed the Zoning Hearing Board. AUUE at *4. That decision was appealed to the Pennsylvania Commonwealth Court, which reversed. AUUE at *5. The Pennsylvania Supreme Court, in turn, affirmed the decision of the Commonwealth Court. Functionally, that had the effect of approving the propriety of the zoning officer’s issuance of the Use Permit to AUUE.

The Supreme Court’s Reasoning Regarding the Use Permit

The AUUE Court specifically avoided the question of whether the entirety of the Zoning Application and proposed UPMC South plan complied with the Ordinance in all respects. Instead, the Pennsylvania Supreme Court focused its analysis and conclusion on the limited question of whether the zoning officer was authorized by the Municipalities Planning Code and Ordinance to issue the Use Permit. Framing the question presented for review, the Supreme Court wrote that it:

. . . must decide whether the Borough’s Zoning Officer had the authority under the [Municipalities Planning Code] and the Borough’s Ordinance to issue a ‘use’ permit - i.e., a zoning permit that simply recognizes that a proposed use is allowed by right in a particular zoning district - to Appellee AUUE, Inc. (AUUE), or whether, before issuing that permit, the Zoning Officer was required to ensure that AUUE’s zoning permit application (Zoning Application) complied with all relevant provisions of the Ordinance.

AUUE at *2. The High Court concluded that Section 614 of the Municipalities Planning Code and Sections 1201.1(a) and 1201.2 of the Ordinance vested the zoning officer with the “broad and expansive authority to issue zoning permits for any purpose, however limited, provided that such purpose conforms to the requirements of the Ordinance” without more broadly determining compliance with all parts of the Ordinance. AUUE at *8.

According to the Supreme Court, the Jefferson Hills zoning officer “. . . issued the zoning permit in question to AUUE for the sole and limited purpose of establishing that AUUE's desired/intended use for the Property was permitted by right in the [Office Park]-District.” Id. at *8. And, agreeing with the Commonwealth Court’s reasoning, the Supreme Court further wrote that “AUUE's desired/intended use for the Property—i.e., a medical center, consisting of a hospital, a medical clinic, and medical professional offices—is a use permitted by right in the [Office Park] District. Thus, the limited purpose for which the Zoning Officer issued the zoning permit to AUUE conforms to and complies with the requirements of the Ordinance.” Id.

The Supreme Court’s Narrow Decision Answers a Specific Question but Creates Uncertainty

If one focuses on the limited holding and the narrow premises underlying that conclusion, the AUUE decision is makes sense. The Ordinance authorized a medical center as a permitted use by right in the Office Park zoning district, AUUE sought recognition that a medical center was a permitted use by right in the Office Park zoning district, and both the Municipalities Planning Code and Ordinance authorized the zoning officer to issue a permit confirming that a medical center was a permitted use by right in the Office Park zoning district. In other words, the Municipalities Planning Code and Ordinance allowed the zoning officer to respond to an application seeking confirmation that a particular use was allowed in a zoning district. That seems uncontroversial.

The uncertainty and potential problems with the practical application of the AUUE decision arise from a lack of clarity about when that rationale is implicated. In other words, how does one know whether a zoning “use permit” reflects a narrow decision by a zoning officer about the general permissibility of a land use within a zoning district versus a more expansive decision that all aspects of a specific proposed development comply with a zoning ordinance? While the Supreme Court made it clear that the “Use Permit” in question did not resolve all zoning issues, which could be addressed later, the AUUE decision does not resolve the practical questions about how interested parties can discern the intended purpose of similar permits. That creates uncertainty and the potential for expectations that do not match reality, which can unnecessarily complicate the zoning process.

Part of the problem in AUUE, and in zoning more broadly, comes from municipal forms that are confusing and serve multiple purposes. For instance, the title of the Jefferson Hills form “Application for Temporary or Final Zoning Approval for Occupancy and Use [a]nd Certificate of Use and Occupancy” encompasses “temporary” zoning approval “final” zoning approval, “occupancy”, “use” and “use and occupancy” certificates. While an applicant completing and submitting that form may only seek an initial determination, as in AUUE, that a proposed land use is authorized within a given zoning district, the form itself suggests a more expansive purpose. Jefferson Hills is not alone in this. Many municipalities have forms that serve multiple purposes, or whose headings or contents are unclear, very broad or implicate different types of relief. This can lead to several problems if/when a zoning officer issues a “Use Permit” or similar determination.

First, an applicant may misconstrue the “Use Permit” as a broader determination by a zoning officer about the specific project’s compliance with all parts of a zoning ordinance. An applicant may believe that a zoning officer was confirming that the project as a whole satisfied all components of a zoning ordinance, while the zoning officer may only be issuing the permit, as in AUUE, responding to a narrower question. That could result in a developer proceeding to invest substantial resources in a development based on an incorrect, but reasonable, interpretation of a zoning officer’s determination.

Second, individuals or entities opposing a proposed development project may not know the purpose or legal effect of the zoning officer’s issuance of a “Use Permit” or similar determination. While the AUUE court ultimately concluded that the “Use Permit” was narrowly focused and future zoning issues remained outstanding, that may not be clear to opponents of a development project, who may find it preferable to preserve their rights by appealing any zoning officer’s decision to avoid waiver. That could lead to an unnecessary expenditure of time and resources for all parties litigating an appeal of a determination that is not a final approval of a project.

Third, in a combination of the points above, a developer may present the issuance of a “Use Permit” as a form of municipal approval of the merits of the project, or compliance with the zoning ordinance as a whole. Individuals or entities opposing a project may incorrectly believe that issuance of a “Use Permit” forecloses further investigation into the project’s compliance with all details of an ordinance when that is not the case.

The points above could, and should, be resolved by clearer municipal forms that provide all parties with an understanding of “what” a zoning officer is being asked to decide. If it was clear in AUUE that the zoning officer was only being asked to essentially render a decision confirming the contents of the Ordinance and zoning map about the permissibility of a land use within a given zoning district, it is likely that the AUUE case would likely have never made it to the Pennsylvania Supreme Court, with the parties saving the time and resources that were expended on several levels of appellate review.

Beyond the problems created by unclear municipal forms is the broader question about the issuance of the “Use Permit” itself. While the Ordinance enumerated a “medical center” as a permitted use by right in the Office Park zoning district, there were questions about whether the whole development project would be entirely located in that Office Park zoning district, or whether it would extend into other zoning districts where that use was not allowed. In a footnote, the Supreme Court wrote that

As to the uncertainty regarding Lot 660-S-40 and the staff parking lot, although AUUE’s proposed plans suggest that the staff parking lot would be situated entirely within the [Office Park] District, the boundary line between the portion of Lot 660-S-40 located in the [Office Park] District and the portion of Lot 660-S-40 located in the R-1 District is not known, and, therefore, it is possible that the staff parking lot would either extend into the R-1 District or would not be located the required distance from the R-1 District.

AUUE at *5, fn. 8. While the Pennsylvania Supreme Court was clear that the Use Permit did not foreclose further evaluations of the UPMC South development’s compliance with the Ordinance, it is not unreasonable to construe the “Use Permit” as an approval of this particular development location. That creates uncertainty about the extent and effect of the zoning officer’s Use Permit.

While the “Use Permit” focused on the medical center buildings, that development does not occur without parking. And there were questions about the zoning of proposed parking areas. Given these facts, it becomes very difficult to determine whether the zoning officer was implicitly indicating that all integral parts of the proposed development were authorized, or whether the Use Permit was really an academic question that merely repeated what the Ordinance and zoning map already showed. To this end, AUUE’s opponents contended that the Use Permit amounted to an improper “advisory opinion” if it was merely confirming what the Ordinance already provided. The Supreme Court rejected that argument.

In sum, the Pennsylvania Supreme Court took great pains to issue a limited and focused holding in AUUE that, at its core, is not particularly controversial. But, the narrow focus of the AUUE decision does not resolve many of the practical issues that may arise in the future. Thus, both developers and those opposed to a development may be forced to spend time and resources precautionarily litigating issues to obtain clarity about what is, and what is not, being determined in a particular zoning interaction with a municipality. That does not seem like an ideal outcome.

For more information about the AUUE decision or zoning matters, please contact the author, Brendan A. O’Donnell at 412-288-2226 or odonnellba@hh-law.com or see our Renewable Energy, Zoning and Land Use practice.