Zoning – Overlay District – Downtown Revitalization – Prohibited Retail Uses – First Impression – Reverse Spot Zoning

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In an effort to revitalize its downtown and promote family tourism, the City of Myrtle Beach created the Ocean Boulevard Entertainment Overlay District (OBEOD), in which retailers would no longer be allowed to sell CBD or sexually oriented products, and retailers would only be allowed to make incidental sales of tobacco products. We reject appellants’ argument that the OBEOD constitutes reverse spot zoning.

We affirm the circuit court’s decision to uphold the ordinance.

Reverse Spot Zoning

Reverse spot zoning is a novel issue in South Carolina.

Traditional spot zoning typically singles out and reclassifies a relatively small tract that is owned by a single person and surrounded by a much larger, uniformly zoned area, such that the small tract is relieved from restrictions to which the rest of the area is subjected.

In contrast, reverse spot zoning occurs when a zoning ordinance restricts the use of a property when virtually all the property’s adjoining neighbors are not subject to the use restriction. Oftentimes, reverse spot zoning occurs where a zoning “island” develops as the result of a municipality’s failure to rezone a portion of land to bring it into conformity with similar surrounding parcels that are otherwise indistinguishable.

The creation of the OBEOD does not fit within the accepted definition of reverse spot zoning. The prohibited retail uses in the OBEOD were not the result of a zoning “island” that developed as the surrounding area was rezoned while the OBEOD was left behind; rather, the OBEOD was created by an affirmative legislative act by the city.

If the OBEOD constituted spot zoning in some fashion, such spot zoning would nevertheless be legally permissible.

First, the ordinance was consistent with the city’s comprehensive plan.

Second, it is “fairly debatable” that city council enacted the ordinance to promote the public welfare.

Third, the ordinance did not result in clear injustice to appellants: even after the creation of the OBEOD, appellants retained ownership of their property—the real estate and the merchandise—and they presented no evidence that they could not pivot to another business model.

We reject appellants’ equal protection challenge on the basis of impermissible spot zoning.

Other Issues

Even if appellants had timely challenged the efficacy of the city council’s two readings of the ordinance, appellants’ suggestion that the two readings of the ordinance were vastly different is simply untrue. While the city council expanded the “purpose and intent” section of the original version of the ordinance and added a number of definitions, the prohibited retail uses in the final version were identical to those in the original version.

Appellants have failed to show that the location of or rationale behind the boundaries of the OBEOD is arbitrary and capricious, especially taking into account the facts that (1) the purpose was to encourage family pedestrian traffic, such that it made sense to exclude businesses on the busy Highway 17 and (2) some distortions are the result of large businesses that comprise more than a city block.

Appellants failed to submit evidence that the city’s policy decision was based on any faulty factual premise or that they were subjected to a taking without compensation.

Where the penalty for violating the ordinance is the loss of a business license, the ordinance does not – as appellants argue – criminalize the sale of legal products.

The OBEOD was a valid exercise of the city’s police powers.

Affirmed.

Ani Creation, Inc. v. Myrtle Beach Board of Zoning Appeals (Lawyers Weekly No. 010-038-23, 19 pp.) (John Kittredge, J.) On petition for rehearing. Appealed from Horry County Circuit Court (Benjamin Culbertson, J.) Reese Boyd and Gene McCain Connell for appellants; Michael Warner Battle for respondents. South Carolina Supreme Court