135 WELLS AVENUE, LLC, v. HOUSING APPEALS COMMITTEE; BROOKE K. LIPSITT, VINCENT FARINA, TREFF LAFLECHE, MICHAEL ROSSI AND BARBARA HUGGINS, AS THEY ARE MEMBERS OF THE NEWTON ZONING BOARD OF APPEALS; AND THE CITY OF NEWTON.

135 Wells Avenue, LLC (Wells Avenue) owns a parcel located at 135 Wells Avenue, Newton, Massachusetts (Site) that it seeks to develop as affordable housing (Project) under G.L. c. 40B, §§ 20-23 (c. 40B). The Site is subject to restrictions enforceable by the City of Newton (City) that limit the use of the Site and surrounding sub-parcels to certain light manufacturing and commercial uses along with other restrictions on development. Wells Avenue has brought this action pursuant to G.L. c. 30A on appeal from the Housing Appeals Committee’s (Committee’s) Summary Decision to affirm the Zoning Board of Appeals for the City of Newton’s (Board’s) denial of its application for an amendment or waiver of the restrictions to allow the construction of the Project. On these cross-motions for judgment on the pleadings, the Court finds that the City’s modifications of the restrictions do not change the fact that the restrictions are a municipal interest in real property, and neither the Board nor the Committee has the authority to modify or waive them under c. 40B. The Court finds further that changed conditions at or in the vicinity of the Site have not rendered the restrictions unenforceable.

Procedural History

On May 27, 2014, Wells Avenue applied for a comprehensive permit with the Board, pursuant to c. 40B. Administrative Record (A.R.) at 72. In conjunction with the permit application, Wells Avenue also filed a petition with the Board of Aldermen (Aldermen) for a waiver, amendment, or release from certain deed restrictions on the Site. A.R. at 72. Public hearings were held on June 25, October 28, and November 10, 2014; the petition was denied on November 17, 2014. A.R. at 72-73. The City’s law department advised the Board that it lacked authority under c. 40B to amend, waive, or release the restrictions because they amounted to an interest in land held by the municipality, and it voted to deny the application. A.R. at 73-74. The Board’s decision was filed with the City Clerk on January 16, 2015. A.R. at 74.

On December 29, 2014, Wells Avenue filed its appeal with the Committee. A.R. at 521. On appeal, the Board asserted as its sole contention that it has no authority to amend or waive the deed restrictions at issue because the amendment or waiver is not a local “permit or approval” within the meaning of G.L. c. 40B, § 21. A.R. at 52, 781. The Committee’s presiding officer conducted an oral argument session on October 20, 2015, and in its Summary Decision, dated December 15, 2015, the Committee affirmed the Board’s decision. A.R. at 52, 65.

On January 14, 2016, pursuant to G.L. c. 30A, § 14, Wells Avenue filed its Complaint seeking judicial review of the Committee’s decision to affirm the Board. The parties filed their Joint Statement on February 5, 2016, and a case management conference was held on February 12, 2016. Wells Avenue filed its Motion for Judgment on the Pleadings and Memorandum in Support of its Motion for Judgment on the Pleadings (Pl. Mot.) on April 1, 2016. The Board and the City of Newton responded with their Oppositions to Wells Avenue’s Motion for Judgment on the Pleadings and Cross-Motions for Judgment on the Pleadings on May 2, 2016 (City Cross- Mot.). The Committee filed its Cross-Motion for Judgment on the Pleadings and its Brief in Opposition to Wells Avenue’s Motion for Judgment on the Pleadings and in Support of Cross- Motion for Judgment on the Pleadings (Comm. Br.) on the same date. Wells Avenue filed its Reply in Support of its Motion for Judgment on the Pleadings and Opposition to Cross-Motions for Judgment on the Pleadings (Pl. Reply) on May 16, 2016. The Court heard the cross-motions on June 7, 2016, and took them under advisement. This memorandum and order follows.

Standard of Judicial Review under G.L. c. 30A, § 14

Decisions of the Committee are reviewed “in accordance with the provisions of chapter thirty A.” G.L. c. 40B, § 22. Judicial review under G.L. c. 30A, § 14, “shall be confined to the record” except in limited situations not present in this case. G.L. c. 30A, §§ 14(5), (6). The Court may “set aside or modify” the agency decision “if it determines that the substantial rights of any party may have been prejudiced because the agency decision is . . . [b]ased upon an error of law . . . or otherwise not in accordance with law.” G.L. c. 30A, § 14(7); see Zoning Bd. of Appeals of Sunderland v. Sugarbush Meadow, LLC, 464 Mass. 166 , 172 (2013). In reaching its decision, the Court “shall give due weight to the experience, technical competence, and specialized knowledge of the agency, as well as to the discretionary authority conferred upon it.”

Board of Appeals of Woburn v. Housing Appeals Comm., 451 Mass. 581 , 590 (2008), quoting G.L. c. 30A, § 14(7).

Undisputed Facts

Based on the pleadings and the administrative record, the following facts are undisputed or deemed admitted.

1. Wells Avenue’s application to the Board described the Project, to be built at 135 Wells Avenue, Newton, MA on the Site, a 6.3 acre sub-parcel located in a limited manufacturing district under the City’s Zoning Ordinance (Ordinance). A.R. at 53.

2. Residential uses are prohibited in the limited manufacturing district. A.R. at 53.

3. The Project consists of 334 rental units, of which 84 will be affordable housing serving households at or below 80% of area median income. A.R. at 53.

4. The Site is a sub-parcel of a 153.6 acre parcel (Parcel 1) which was reclassified by the Ordinance from a single residence A district to a limited manufacturing district on June 27, 1960. A.R. at 53. The reclassification resulted in litigation that was resolved in Sylvania Elec. Prods., Inc. v. Newton, 344 Mass. 428 (1962). See id. at 437.

5. In 1960, Sylvania Electric Products (Sylvania) had an option to purchase a parcel of land in Newton containing 180 acres. A.R. at 53. At that time, Sylvania petitioned the Aldermen to reclassify a portion of that parcel, comprising Parcel 1, from residential to limited manufacturing. A.R. at 53. Sylvania also discussed with the City executing an option agreement whereby the City could purchase from Sylvania a 30.5-acre sub-parcel of Parcel 1 (Parcel 2) that would be restricted in use and would hold restrictions on Parcel 1. A.R. at 53-54.

6. When the Aldermen approved the Ordinance, they authorized the mayor to accept the proposed option agreement for Parcel 2. Sylvania, 344 Mass. at 429-32; A.R. at 54.

7. Following the Ordinance’s enactment, Sylvania took title to the 180-acre parcel and executed the option agreement granting the City an option to purchase Parcel 2. A.R. at 54. The option agreement was executed on July 6, 1960 and recorded at the Middlesex (South) Registry of Deeds (registry) in Book 9630, Page 48 on July 8, 1960. A.R. at 332- 37.

8. The Ordinance was challenged by abutting landowners, but in Sylvania, the Supreme Judicial Court (SJC) upheld the Board’s reclassification of Parcel 1. Sylvania, 344 Mass. at 437; A.R. at 53-54.

9. In 1969, Newton exercised its option on Parcel 2, and a deed from Sylvania’s successor- in-interest conveyed Parcel 2 to the City. A.R. at 54. The deed was executed on May 22, 1969 and recorded at the registry in Book 11699, Page 535 on June 26, 1969. It provides that Parcel 2 is subject to restrictions for the benefit of Parcel 1 for 99 years from the date of execution prohibiting the construction of buildings or structures except for recreation, conservation, or parkland purposes, and also allows for fences. A.R. at 54, 117.

10. The 1969 deed also restricts Parcel 1 for the benefit of Parcel 2 for 99 years, beginning on December 1, 1968 (Restrictions). A.R. at 118. The Restrictions include the following: limiting the floor area of buildings to be constructed on the premises; requiring that a percentage of the ground area be maintained in open space not occupied by buildings, parking areas, or roadways; imposing setbacks, height restrictions, and a buffer zone; restricting the number and type of signs and the type of lighting; and limiting the use of buildings to certain, but not all, of the uses permitted in a limited manufacturing district. A.R. at 54, 118-22.

11. The Restrictions further provide that the Aldermen must give prior approval with respect to finished grading and topography, drainage, parking, and landscaping before any building or structure can be erected on Parcel 1 or one of its sub-parcels. A.R. at 54-55, 118.

12. There have been at least 19 orders of the Aldermen between 1971 and 2014 granting waivers and amendments to the Restrictions leading to various uses of parts of Parcel 1, including: a tennis club, skating facility, squash and racquetball facility, tennis and fitness club; health club, health research and monitoring center, retail shop and food service area, whirlpool, gymnastics academy, dance school, for-profit mathematics school, day care center, “bouncy house” amusement center, religious educational use, an increase in the amount of allowed office space “floor to area” ratio, and an allowance for construction partially within the no-build area. A.R. at 55, 123-56. Of the 19 orders included in the administrative record, four orders make the Board’s approval contingent on the petitioner recording the plan approval at the registry, 11 orders authorize the mayor to execute such recordable documents as necessary to give the Aldermen’s orders effect, and four orders make no reference to the recordation of any document. A.R. at 123-56.

13. Current uses on Parcel 1 include the Russian School of Mathematics, the Solomon Schecter Day School, Newton-Wellesley Hospital’s Ambulatory Care Center, the Massachusetts School of Professional Psychology, the Newton Childcare Academy, New England Cable News, Exxcel Gymnastics and Climbing Center, Valeo Sports Center, Upromise, and Neurocare Inc. Sleep. A.R. at 55.

14. In addition to their legislative authority, the Aldermen act as the City’s special-permit granting authority. A.R. at 299-301.

Discussion

In its Motion for Judgment on the Pleadings, Wells Avenue alleges that the amendments or waivers of the Restrictions that the City regularly grants are local “permit[s] or approval[s]” under c. 40B that may be waived by the Board. Pl. Mot. at 10-11. Alternatively, Wells Avenue argues that the Restrictions are not enforceable because of changed conditions at the Site and Parcel 1 that undermine the purpose for which the Restrictions were granted. Pl. Mot. at 11. These arguments are addressed in turn.

I – Whether the Amendment or Waiver is a c. 40B “Permit or Approval”

The Restrictions are a property interest of the City; they cannot be transformed into a zoning restriction that can be amended or waived under c. 40B. Zoning Bd. of Appeals of Groton v. Housing Appeals Comm., 451 Mass. 35 , 40 (2008) (“An order directing the conveyance of an easement, however, cannot logically or reasonably derive from, or be equated with, a local board’s power to grant ‘permits or approvals.’”); see Sylvania, 344 Mass. at 434 (distinguishing option restriction on deed from simultaneous zoning decision to classify same parcel as limited manufacturing district); Killorin v. Zoning Bd. of Appeals of Andover, 80 Mass. App. Ct. 655 , 658 (2011) (distinguishing restrictions created by deed, instrument, or will under G.L. c. 184, § 23 from those created by a board granting a special permit and governed by G.L. c. 40A); see also Town of Brookline v. MassDevelopment Fin. Agency, No. 14-P-1817, 2015 Mass. App. Ct. LEXIS 928, at *2 (Mass. App. Ct. Sept. 25, 2015) (unpublished decision) (holding that a deed restriction entered into by the parties incidental to property owner’s request for a change in town zoning by-law “does not alter the essential nature of the instrument itself”).

In Sylvania, the SJC determined that the Restrictions on Parcel 1 are a property interest, not a zoning restriction. Sylvania, 344 Mass. at 434-35. The SJC found that while the City induced Sylvania to include the option restrictions in the deed, the zoning change simply reclassified land already so restricted by that deed. See id. at 434. As the SJC stated, “[i]t does not infringe zoning principles that, in connection with a zoning amendment, land use is regulated otherwise than by the amendment. Zoning regulations . . . exist unaffected by, and do not affect, deed restrictions.” Id. While it is true, as Wells Avenue alleges, that “the Restrictive Covenant arose in the context of the City’s decision to re-zone the Sylvania parcel,” Pl. Mot. at 16, this context does not change the SJC’s holding that zoning restrictions are distinct from restrictions on a property interest. Sylvania, 344 Mass. at 434-35.

Notwithstanding Sylvania, Wells Avenue argues that in granting the numerous amendments and waivers to the restrictions between 1971 and 2014, the Aldermen, as a “local board,” used the amendments and waivers as land-use “permits or approvals” under G.L. c. 40B, § 21, and thus the Board had the authority under c. 40B to grant an amendment or waiver. Pl. Mot. at 13-15. Wells Avenue points to the text of the statute, which states:

The board of appeals . . . shall have the same power to issue permits or approvals as any local board or official who would otherwise act with respect to such application, including but not limited to the power to attach to said permit or approval conditions and requirements with respect to height, site plan, size or shape, or building materials.

G.L. c. 40B, § 21 (emphasis added). Wells Avenue asserts that the Aldermen compose the type of local board “whose approval [through covenant amendments or waivers] would otherwise be required for a housing development to go forward.” Groton, 451 Mass. at 40; Pl. Mot. at 13-14. In effect, Wells Avenue is making an “if it walks like a duck and quacks like a duck” argument: if the Alderman act like a zoning board in waiving and amending the Restrictions, they should be treated as one for the purposes of c. 40B, and their waivers of the Restrictions should be subject to the Board’s authority to issue permits and waive other regulations under c. 40B.

The Aldermen do act as the City’s special-permit granting authority and the Restrictions on the Site do govern typical land-use issues such as those illustrated in the statute. However, these functional similarities do not erase the division between the Aldermen’s authority to control the City’s property interests and their permitting authority. It is only their permitting authority that is subject to waiver under c. 40B. Zoning Bd. of Appeals of Amesbury v. Housing Appeals Comm., 457 Mass. 748 , 749 (2010). “[U]nder § 21, the local zoning board’s power to impose conditions . . . is limited to the types of conditions that the various local boards in whose stead the local zoning board acts might impose, such as those concerning matters of building construction and design, siting, zoning, health, safety, environment, and the like.” Id.; see Groton, 451 Mass. at 41 (stating that c. 40B only reaches local permitting barriers, not restrictions imposed by G.L. c. 40, §§ 3, 15A on the conveyance of municipally-held easements); see also Town of Brookline, 2015 Mass. App. Ct. LEXIS 928 at *2-3 (distinguishing a deed restriction governed by G.L. c. 184, § 23 from a rezoning amendment as an exercise of municipal police power).

The claim that the Legislature intended c. 40B to be read broadly and remove local impediments to affordable housing only reaches as far as other statutes constrain it. See Dennis Housing Corp. v. Zoning Bd. of Appeals, 439 Mass. 71 , 80 (2003) (stating that c. 40B is meant to override local obstacles to affordable housing development, not State law that is general in its implementation and application). The Legislature regulates the municipal power to convey, transfer, or abandon any interest in municipal property through the mandatory proceeding of G.L. c. 40, §§ 3, 15, 15A. The Aldermen’s various exercises of their authority to amend or waive the City’s property interest in the Restrictions were made pursuant to G.L. c. 40. However formal or informal those acts were, they were not exercises of the Aldermen’s permitting or zoning authority that are subject to waiver under c. 40B. The Board therefore lacked the authority to, in effect, step into the shoes of the Aldermen and grant a “permit or approval” in the form of a waiver of the Restrictions. See Blakeley v. Gorin, 365 Mass. 590 , 595 (1974) (“The settled law of this Commonwealth is that deed restrictions of this type are a property interest in land.”); Restatement (Third) of Property (Servitudes), § 1.1(1), (3) (2000) (“A servitude is a legal device that creates a right or an obligation that runs with land or an interest in land. . . . Zoning and other public land use regulations . . . are not servitudes within the meaning of the term as used in this Restatement.”). In other words, even if the Aldermen walk and talk like a zoning board with respect to the Restrictions, the Restrictions are still a property interest not subject to c. 40B, and the Aldermen’s actions do not create a regulatory regime that subjects the Restrictions to the Board’s waiver power under c. 40B. [Note 1]

Having established that the Restrictions are a property interest outside the purview of c. 40B, this Court need not reach Wells Avenue’s assertion that if the amendments and waivers were conveyances of a municipal interest in property, they were conveyed illegally. See Pl. Mot. at 20 (alleging that the Aldermen failed to follow G.L. c. 30B, §§ 16(a),16(b) and Section 2-7 of the Newton Ordinances). Regardless of the legality of the amendment and waiver procedures, it does not alter the nature of the Restrictions or the Board’s inability to waive or amend them.

Furthermore, the Committee properly understood its limited authority to review the actions of the Board. See G.L. c. 40B, § 23 (limiting Committee authority to deciding whether board of appeals decisions impose “uneconomic” conditions or are “consistent with local needs”). The Committee has “the same power to issue permits or approvals as any local board or official who would otherwise act with respect to such application,” G.L. c. 40B, § 21, and the authority to override local regulations only when they impose “uneconomic” conditions or are not “consistent with local needs” as defined in G.L. c. 40, § 20. Groton, 451 Mass. at 40; see Dennis, 439 Mass. at 77. Wells Avenue’s appeal was on the grounds that the Board erred when it found it did not have the authority to waive the Restrictions. The Committee properly denied the appeal on the ground that the Board was correct that it did not have such authority, and therefore, the Committee did not have the power to issue the permit where the Board could not.

As the Committee noted, although State law recognizes the distinction between deed restrictions and zoning restrictions, the Committee must be sensitive to potential situations in which a municipality restricts a property interest to impede c. 40B affordable housing development. See A.R. at 64-65; Comm. Br. At 17-19. In Chelmsford v. Di Biase, 370 Mass. 90 (1976), the SJC found that the municipal taking of a proposed c. 40B property was done in good faith and was initiated before the developer submitted its application for a c. 40B comprehensive permit, and thus did not fall under the board of appeals’ or the Committee’s authority. Id. at 91- 92. The Court explicitly reserved its authority to reach a different conclusion if presented with a future situation “in which good faith or public purpose is negated.” Id. at 95. In this case, because the restrictions on the Site were granted based on an option agreement that predated c. 40B’s enactment in 1969, there is no bad faith present, and this Court’s holding does not reach such a situation.

II – Whether the Deed Restriction is Unenforceable due to Changed Conditions.

Wells Avenue claims in the alternative that the Restrictions should be declared unenforceable because they were never enforced and are antithetical to Parcel 1’s current uses. Pl. Mot. at 22-24. Further, it asserts that the City does not derive a benefit from the restrictions nor has it claimed one. Pl. Reply at 13. In their cross-motion, the City and the Board counter that while Parcel 1’s uses have shifted to a commercial nature as the economy has evolved, the Aldermen have never amended or waived the Restrictions to allow a residential use, and they still confer a benefit. City Cross-Mot. at 21-22.

General Laws c. 184, § 30 states that even where the dominant estate still derives an “actual and substantial benefit” from the restriction,

[n]o restriction determined to be of such benefit shall be enforced or declared to be enforceable . . . if (1) changes in the character of the properties affected or their neighborhood . . . reduce materially the need for the restriction or the likelihood of the restriction accomplishing its original purposes or render it obsolete or inequitable to enforce except by award of money damages.

In determining whether conditions have changed to such an extent, the law looks to whether enforcement of the restriction would be “merely quixotic – failing to serve the grantor’s original purpose and impeding present desirable and feasible uses.” Cogliano v. Lyman, 370 Mass. 508 , 512 (1976); see McArthur v. Hood Rubber Co., 221 Mass. 372 , 376 (1915) (“The change in the character of the neighborhood is so radical that it seems plain that there can be no further life in the restriction.”); Jackson v. Stevenson, 156 Mass. 496 , 502 (1892) (finding that the purpose for which the restriction was originally granted “can no longer be accomplished”).

The Restrictions and the negotiations that resulted in their execution demonstrate that the City intended Parcel 1 to be a non-residential area. Not only do the Restrictions prohibit residential uses on any sub-parcel comprising Parcel 1, but the agreement with Sylvania was expressly predicated on Sylvania ceding three acres to be kept as a residential district and increasing the depth of a strip of land on Nahanton Street within the residential district from 140 feet to 180 feet. Sylvania, 344 Mass. at 430-32. In creating a general plan for this area, the City considered how best to balance residential and non-residential uses, and the restrictions secure that benefit. See id. at 431 (finding that the purpose of the option agreement was to give the city a dominant estate by which it could enforce the restrictions).

The City and the other servient estates on Parcel 1 still benefit from the Restrictions. While Parcel 1 has evolved away from a limited manufacturing use, it does not and has never had a residential use. In that way, Parcel 1 is different from the parcels in Cogliano, which were restricted to residential use but became entirely surrounded by industrial and office buildings and an expanded Route 128. Cogliano, 370 Mass. at 511. Further, in contrast to a process where “said restriction has been for a long time entirely disregarded and universally violated by nearly all, if not all, the present owners,” McArthur, 221 Mass at 375, the amendment or waiver process is a legally sanctioned procedure that put each applicant on notice of the as-of-right uses and the prohibited uses—namely, residential. Whether the day care center or “bouncy house” would find a metal casting plant offensive is speculative, but the waiver application process did or should have made them aware that its presence was more legally permissible than an apartment building. Even as amended, the Restrictions benefit the City and the other servient estates by concentrating certain commercial uses in one area. Thus, enforcement of the Restrictions is not “quixotic” and does not impede “present desirable and feasible uses.” Cogliano, 370 Mass. at 512.

Conclusion

For the foregoing reasons, Wells Avenue’s Motion for Judgment on the Pleadings is DENIED, and the Defendants’ Cross-Motions for Judgment on the Pleadings are each ALLOWED. Judgment shall enter affirming the Committee’s Summary Decision in favor of the Board and dismissing the complaint with prejudice.

SO ORDERED