Custom zoning for existing business could have major impact

The rezoning of a manufacturing site can have major consequences for the owner and user of those lands. It occurs with some regularity that the rezoning does not match the existing activity or that the permitted activity is restricted. This affects the marketability of the land. It is therefore very important as a landowner or user of a production site to be alert to zoning plan revisions.

Date: Jan. 09, 2019

Modified November 14, 2023

Reading time: +/- 2 minutes

The rezoning of a manufacturing site can have major consequences for the owner and user of those lands. It occurs with some regularity that the rezoning does not match the existing activity or that the permitted activity is restricted. This affects the marketability of the land. It is therefore very important as a landowner or user of a production site to be alert to zoning plan revisions.

Zoning ordinances are generally reviewed once every few years. There may also be nearby developments, such as housing developments, that necessitate a plan review.

In the case of industrial and business parks, it often plays out that most zoning plans allow a range of activities. The permitted activities are then limited only by allowing certain environmental categories. In that case, it is difficult to be able to map all potential environmental consequences during the plan review, since a large number of businesses are possible and all those businesses have their own environmental consequences.

When revising zoning plans, therefore, with some regularity only the existing business operations are taken into account, instead of all business activity that was initially permitted on site. Especially if other developments, such as housing, are also planned in the vicinity of the industrial area.

Repurposing existing business operations

The basic principle is that no permanent rights can be derived from a zoning plan. The fact that business activity is allowed in more environmental categories is therefore not in itself a reason to leave it that way in a revision. Of course, a weighing of interests must take place if a permitted use is to be removed.

If the choice is made to zoning only the existing business, then of course it must be done carefully. However, this unfortunately goes wrong quite often.

In a case(ECLI:NL:RVS:2018:2081) about an asphalt plant in Koudekerk aan de Rijn, things also went wrong. The municipal council had intended to zone the asphalt plant's existing operations. However, the council had established an environmental category that did not correspond to the actual production (capacity) of the asphalt plant and thus the zoning plan was partially annulled.

This company had fortunately noticed the error. If it had not, the existing operation would have been subject to the transitional law and any change in operation could have caused problems.

Future implications

But even if existing business operations are zoned, there is caution. At first glance, zoning the existing business operations is not necessarily a problem for the owner or user of the land. Existing production processes and business operations are not affected.

A dimensional zoning may get in the way if the business located there wants to change or expand its operations. This is often not provided for in a dimensional zoning.

Plan damage

Moreover, land with a bespoke zoning is considerably more difficult to sell than land with a more general business zoning. Given the municipal council's policy latitude, this argument generally has no chance of success in zoning proceedings (see on this, for example: ECLI:NL:RVS:2016:2689), but this does not take away from the fact that imposing a bespoke zoning may result in substantial planning damage.

They know all about that at the Maasdriel municipality by now. In my blog of May 4, 2018, I described a case in which rezoning a production site for plastic packaging materials with a bespoke zoning has cost the Maasdriel municipality approximately €570,000 in planning damage.

Limitation on plan damage claim

It is not inconceivable for manufacturing companies to miss out on such a planning claim. If their own business is zoned neatly, there is nothing to worry about for day-to-day operations. Certainly not if there are no concrete plans for sale.

However, the planning damage claim lapses five years after the zoning plan becomes irrevocable. If one finds out after more than five years, for example when selling the land, that the possibilities are not as broad as they once were after all, then no more planning damage can be recovered from the municipality. This is a major latent risk. So it is important to always keep a close eye on this, even if at first glance nothing seems wrong.

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