McKee Family I, LLC and JD McCormick Company, LLC, Plaintiffs-Appellants-Cross-Respondents-Petitioners,
City of Fitchburg, Defendant-Respondent-Cross-Appellant.
Argument: November 3, 2016
Court Dane County, John C. Albert
OF A DECISION OF THE COURT OF APPEALS Reported at: 366 Wis.2d
329, 873 N.W.2d 99
the plaintiff-appellant-cross-respondent-petitioners, there
were briefs by Matthew Fleming and Murphy Desmond, S.C.,
Madison, and oral argument by Matthew J. Fleming
the defendants-respondent-cross-appellant, there was a brief
by Lisa M. Lawless, Ross A. Anderson, Husch Blackwell, LLP,
Milwaukee and Mark R. Sewell, Fitchburg City Attorney, and
oral argument by Lisa M. Lawless
amicus curiae brief was filed by Thomas Larson, Madison for
Wisconsin Realtors Association, NALOP Wisconsin and the
Wisconsin Builders Association.
amicus curiae brief was filed by Ryan J. Walsh, Chief Deputy
Solicitor General with whom on the brief was Brad D. Schimel,
Attorney General and Misha Tseytlin, Solicitor General for
Wisconsin Attorney General and Department of Justice.
amicus curiae brief was filed by Daniel M. Olson, Madison for
League of Wisconsin Municipalities.
WALSH BRADLEY, J.
Petitioner, McKee Family I, LLC ("McKee") appeals
an unpublished decision of the court of appeals affirming a
circuit court grant of summary judgment in favor of the City
of Fitchburg. The court of appeals determined that McKee
did not have a vested right under a planned development
district zoning classification and that its constitutional
claim failed as a result.
McKee contends that the court of appeals erred and that it is
entitled to summary judgment in its favor. Acknowledging the
fact that it did not submit an application for a building
permit, it nevertheless argues that it had a vested right in
developing land under the zoning classification.
According to McKee, vested rights accrue when a developer has
made substantial expenditures or incurred substantial
liability based upon reasonable expectations established by
government action. It contends that to the extent that the
zoning classification is contractual in nature it also
creates expectations upon which developers may rely.
Contingent on its vested rights arguments, McKee further
asserts that it has a claim for damages under the Takings
Clause of the United States Constitution.
We conclude that McKee did not have a vested right in
developing the property under the planned development
district zoning classification because it did not apply for a
building permit. Wisconsin follows the bright-line building
permit rule that a property owner's rights do not vest
until the developer has submitted an application for a
building permit that conforms to the zoning or building code
requirements in effect at the time of application. Lake
Bluff Hous. Partners v. City of S. Milwaukee, 197 Wis.2d
157, 172, 540 N.W.2d 189 (1995).
Additionally, we determine that a planned development
district zoning classification does not create contractual
expectations upon which developers may rely. There is a very
strong presumption that legislative enactments do not create
contractual or vested rights. Dunn v. Milwaukee
Cty., 2005 WI.App. 27, ¶8, 279 Wis.2d 370, 693
N.W.2d 82 (citation omitted) . Further, there must be a clear
indication that a legislative body intends to bind itself
contractually in order to overcome the presumption.
Nat'1 R.R. Passenger Corp. v. Atchinson, Topeka and
Santa Fe Ry. Co., 470 U.S. 451, 465-66 (1985). McKee
failed to overcome the presumption that Fitchburg did not
intend to enter into a binding contract when it enacted an
ordinance approving the zoning classification.
Finally, we do not need to reach McKee's constitutional
takings claim because McKee conditioned its takings claim on
its claim for vested rights. Because McKee has no vested
right in a planned development district zoning
classification, it cannot succeed on its asserted contingent
Accordingly, we affirm the decision of the court of appeals
affirming the circuit court's grant of summary judgment
in favor of the City of Fitchburg.
This case involves a dispute about a change in the municipal
zoning classification of property that McKee owns in
Fitchburg. Specifically, McKee objects to Fitchburg's
rezoning of two lots (53 and 54) from a planned development
district ("PDD") zoning classification to a
residential-medium ("R-M") zoning classification.
To provide the necessary context, we begin by explaining
Fitchburg's process for adopting a zoning classification.
Pursuant to Wis.Stat. § 62.23 (2013-14), municipalities
may use a PDD zoning classification to establish planned
mixed-use developments that have a higher density than is
allowed under an R-M classification. The R-M zoning
classification allows development of only single-family or
Before a property owner can develop land that is zoned under
the PDD classification, Fitchburg's General Ordinances
require the property owner to submit a general implementation
plan ("GIP") to Fitchburg's Plan Commission.
Fitchburg, Wis., Gen. Ordinances §§ 22-593, 22-594
(2015). The Plan Commission then makes a
determination and recommendation whether to advise the
Fitchburg Common Council to approve the rezoning and GIP, to
approve it with modifications, or to deny it. Id.
§ 22-594 (b) .
If Fitchburg approves a general plan, a property owner is
then required to submit a specific implementation plan
("SIP") . Id. § 22-599. A property
owner is allowed to apply for a building permit if Fitchburg
approves the SIP. Id. § 22-597.
The relevant zoning history of this case extends back to
1989, when McKee Brothers Partnership agreed to dedicate
approximately 60 acres of farmland to the City of Fitchburg.
This farmland, which became McKee Farms Park, was donated to
fulfill Fitchburg's park land dedication requirements for
a variety of McKee Brothers' projects, including the
property at issue in this case. Credit for the parkland
allocation was determined by a settlement agreement, which
gave McKee Brothers the right to build 600 dwelling units on
a variety of lands it owned.
Over the years, the property at issue has been transferred
between various McKee entities. After the parkland
dedication, McKee Brothers transferred the property to MAF
Development, Inc., to create the Plat of Chapel
Valley. The plat included four lots, the two
undeveloped lots at issue (53 and 54), as well as two
additional lots that have already been developed (10 and 11)
In conjunction with the creation of the Plat of Chapel
Valley, MAF Development entered into an agreement with
Fitchburg that it would make improvements in preparation for
developing its land. The required improvements included:
standard street improvements, installation of sidewalks,
walkways and driveways, sanitary sewers, water mains laterals
and easements, drainage facilities, grading and landscaping,
erosion control, and electric, communications and gas
At the time the plat was created, it had an R-M zoning
classification, but MAF Development applied for and received
approval for rezoning to a PDD classification. When Fitchburg
enacted Ordinance No. 94-0-11 rezoning Lots 10, 11, 53, and
54 from R-M to PDD zoning, it also approved MAF
Development's general implementation plan for developing
As the general plan explained, the proposed development would
provide "high quality multi-family housing that is in
strong demand" for "mature adults." Citing the
"lack of housing options for mature adults in the
Fitchburg area, " the proposed development was intended
to complement the "Independent Living" and
"Elder Care" developments nearby. The GIP explained
that the "formation of such a 'senior community'
will serve the community by making the most efficient use of
public and private services these people will require."
Lots 10 and 11, which are not at issue in this case, were
developed between 1995 and 2002 under the PDD-GIP zoning plan
with assisted living facilities, senior housing and senior
condominiums. Lots 53 and 54 were not developed and were
eventually deeded from MAF Development to McKee in 2007.
In 2008, more than a decade after Fitchburg approved the
planned development district zoning and MAF Development's
general implementation plan, McKee and JD McCormick Company,
LLC ("McCormick"), entered into negotiations for
McCormick to purchase the undeveloped lots 53 and 54 from
McKee. The purchase agreement was contingent on
McCormick's ability to obtain approval from Fitchburg to
build 128 apartment units on the lots.
McCormick presented a plan for a 128-unit apartment complex
on Lots 53 and 54 at a Fitchburg neighborhood meeting.
Fitchburg residents expressed concern about the effect of the
proposed development on traffic, crime and housing values.
The neighborhood's objections were set forth in a
petition signed by 600 ...