Bd. of APPEALS of GLOUCESTER v. Hous. APPEALS Comm.

BOARD OF APPEALS OF GLOUCESTER v. HOUSING APPEALS COMMITTEE & another. ¹

10-P-361

COMMONWEALTH OF MASSACHUSETTS APPEALS COURT

Entered: April 14, 2011.

NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

This is an appeal by the board of appeals of Gloucester from a decision of the Housing Appeals Committee (HAC). HAC overturned the board's denial of a comprehensive permit pursuant to G. L. c. 40B, for a twelve unit mixed income residential condominium structure in Gloucester. Substantially for the reasons stated by the HAC and the Superior Court, we affirm.

'Because we are examining conclusions of law upon the same record as the Superior Court judge, our review of the judge's decision proceeds de novo.' Zoning Bd. of Appeals of Canton v. Housing Appeals Comm., 76 Mass. App. Ct. 467, 472 (2010). We turn to the facts, keeping in mind that '[i]n reviewing HAC's decision to vacate a permit denial, we must apply the 'substantial evidence' standard in light of the heavy burden borne by a local board that denies a comprehensive permit application; that burden requires proof of a specific health or safety concern of sufficient gravity to outweigh the regional housing need.' Id. at 473.

Background. The locus is comprised of approximately 5.94 acres and is located across the street from Good Harbor Beach and the Atlantic Ocean. The approximately 1.5 acre building site of the locus is located in Gloucester's 'Extensive Business' zoning district while a portion of the locus, consisting of salt marsh, is zoned R-3, Medium/High Density Residential. The locus is also situated within the Coastal Barrier Resources System (CBRS), a Federal classification which restricts Federal expenditures and financial assistance, including flood insurance, to projects that develop coastal barriers in an effort to minimize damage to property, fish, wildlife, and natural resources. 16 U.S.C. §§ 3501-3510. The building site is designated as 'Zone B' by the Federal Emergency Management Agency (FEMA), and is outside the special flood hazard area, or 100-year floodplain. Zone B areas are generally situated within the 500-year floodplain and have a minimal to moderate flood hazard; the properties lying within this zone are not required to carry flood insurance. Other portions of the locus lie within the 100-year floodplain, but the plan does not include construction in that area. Two of the roads that provide the primary access to the site do flood with storms several times per year but the HAC found on the testimony of an abutter that the ways usually remain passable and when they are not, the locus is accessible from the town of Rockport, albeit by a longer route.

The locus is situated amid an area of mixed residential uses except for the property directly across the street, which has a restaurant and is the only other property in the area zoned as extensive business. A restaurant was also formerly located on a part of the locus; the restaurant burned down and was razed and the locus is now vacant. The proposed twelve-unit condominium structure will be built with clapboard siding and white trim to compliment the surrounding residential structures, and each of the twelve condominium units will be equipped with a sprinkler system. Three of the twelve units are restricted as low or moderate income units.

Discussion. The board's principal arguments on appeal stem from its contention that the project is not 'fundable' which, it claims, renders the project ineligible for a comprehensive permit such as that issued here. We agree that the project must be 'fundable by a subsidizing agency under a low or moderate income housing subsidy program,' 760 Code Mass. Regs. § 31.01(1)(b) (2004), as a prerequisite to obtaining a comprehensive permit and maintaining an appeal before the HAC.

The Massachusetts Housing Finance Agency (MassHousing) issued to the developer an eligibility letter stating the project was eligible for funding under both MassHousing's Housing Starts Program and the Federal Home Loan Bank of Boston's New England Fund (NEF). Under then applicable regulations, such a letter creates a rebuttable presumption of fundability, 760 Code Mass. Regs. § 31.07(1)(a) (2004), which may be rebutted with evidence 'as to the status of the project before the subsidizing agency.' 760 Code Mass. Regs. § 31.07(4) (2004). ²

The board, seeking to rebut the presumption, claims that Federal regulations expressly prohibit Federal funding of projects located in the CBRS and that State funding is inconsistent with the public policy evidenced in Executive Order No. 149, regarding construction of structure in areas of potential flood hazard. ³ The claim is not adequate to rebut the presumption.

By regulation, the HAC will not hear evidence concerning fundability other than evidence of a change in status before the subsidizing agency. 760 Code Mass. Regs. § 31.07(4)(a). ⁴ The record includes nothing to indicate that the subsidizing agency has revoked the letter of eligibility or that the status of the project has changed or is being reconsidered by MassHousing. Our decisions have supported HAC's refusal to second-guess the funding agencies' decisions. See Zoning Bd. of Appeals of Amesbury v. Housing Appeals Comm., 457 Mass. 748, 764 & n.20 (2010) ('the question, for example, of who should determine whether a developer ha[s] met the requirements of a limited dividend organization eligible to receive State or Federal subsidy 'is properly left to the appropriate State or Federal funding agency''), quoting from Board of Appeals of Hanover v. Housing Appeals Comm., 363 Mass. 339, 379 (1973).

We reject the board's claim that its challenge is to the 'legality' of the funding and that HAC therefore had the authority to address the issue. Compare Middleborough v. Housing Appeals Comm., 449 Mass. 514, 516, 526-527 (2007) (involving legal issue of whether financing commitment qualified as 'subsidy'). The board's argument turns on the project's eligibility for funding, a question best left to the subsidizing agency. ⁵ Even if were we were to address the merits of the board's argument, it would fare no better. The regulations do not require funding eligibility from more than one source. 760 Code Mass. Regs. § 31.01(1)(b). The board's claim that Executive Order 149 prohibits State funding of the project is not supported by evidence that MassHousing failed to evaluate and take flood hazards into account when issuing the eligibility letter. In the absence of any evidence to the contrary, we assume that the agency complied with the directives of Executive Order...