The Delaware Supreme Court overturned and remanded one condition and affirmed another related to a proposed Sussex County residential subdivision.

The lengthy court battle began with a hearing before the Sussex County Planning & Zoning Commission in October 2022. Developer Smokey Hollow LLC proposed to build an 82-lot cluster subdivision on 66 acres zoned GR, general residential, near Selbyville. Attached to the preliminary approval were 19 conditions. The developer agreed to all but two – eliminating one lot and requiring a 25-foot fixed buffer from nontidal wetlands.

After the commission refused to reconsider the conditions, the developer filed a lawsuit in Superior Court, which struck both conditions. Sussex County appealed that decision to the state Supreme Court, arguing the court erred by applying a faulty reasonableness analysis.

At the P&Z public hearing, homeowners in the adjacent Fox Haven residential subdivision raised a number of concerns, including that a specific lot on the plan posed flooding and runoff risks to their neighborhood.

In creating a condition to eliminate the lot, the commission said the lot was isolated from the rest of the plan, access was dependent on crossing wetlands, and the lot and surrounding area are subject to frequent flooding.

The commission did not explain why it imposed the fixed buffer condition.

As a compromise, the developer proposed a 100-foot forested or landscaped buffer for the isolated lot and an average – not fixed – 30-foot buffer from all nontidal wetlands around certain lots.

When the commission refused to reconsider, the developer filed a lawsuit in Superior Court claiming the conditions were unreasonable and contrary to county code. Judge Craig Karsnitz agreed, declaring both conditions as unreasonable. Karsnitz determined the commission imposed the condition to eliminate the isolated lot in response to neighborhood opposition rather than to minimize impacts on the neighborhood. He also determined a 30-foot average buffer was sufficient given Sussex County Council adopted an ordinance requiring just that about a month after Smokey Hollow’s preliminary approval.

Much of the Supreme Court’s consideration related to a former case in which the Kent County Regional Planning Commission denied a developer’s application even though it complied with Kent County Code. In that case, the commission denied the application based on concerns raised by state agencies.

Kent County Levy Court, the equivalent to Sussex County Council, upheld the denial. The Superior Court also affirmed the decision. But Delaware Supreme Court reversed it, determining the commission exceeded its statutory authority by denying a subdivision application that met county code’s requirements. The majority on the Supreme Court concluded the state statute did not permit the commission to deny a conforming application. However, it determined the commission could approve an application subject to reasonable conditions.

So as it pertains to the Smokey Hollow case, the question became, what are reasonable conditions?

Sussex County argued a condition should meet some, if not all, of nine factors such as non-code factors like agency comments, school capacity issues and concerns related to health, safety and the welfare of the community. Among other factors is the commission’s discretion to harmonize and coordinate regional planning.

The developer argued conditions should be more nuisance-based. It contended local governments apply land-use regulations to define reasonable property uses and prevent potential nuisances. It argued because a plan satisfies all code requirements, it is presumed to be reasonable and further restrictions are not necessary unless a property’s proposed development creates a nuisance.

The Supreme Court declined to rule in favor of either side, saying the course is already charted by zoning code and the previously litigated Kent County case.

As for why it reversed the Superior Court’s ruling on Smokey Hollow’s isolated lot, the Supreme Court said the lower court failed to consider the commission’s primary stated reason for the condition – environmental concerns unique to the lot.

However, the Supreme Court’s ruling does not mean the condition is reasonable. Instead, it remanded the issue back to the commission because it does not appear a code-required environmental assessment was done to support the unique concerns leading to the condition.

“We do not mean to minimize the neighbors’ firsthand observations about environmental and flooding concerns for lot 64. That is the purpose of the public hearing – to receive input from affected communities. But before the commission can condition subdivision approval on eliminating lot 64, it must do more than rely on anecdotal statements from neighbors,” the opinion reads.

The other condition was more straightforward for the Supreme Court. It said the commission never stated why a fixed – not average – buffer was required. The commission’s counsel simply read the condition into the record. By doing so, it failed to explain the need for the condition.