## Facts

- Loreto Development Co. (Loreto) owned an approximately 85-acre parcel in the Village of Chardon, Ohio.
- Most of the parcel was zoned residential, but about 23 acres were zoned C-1 (local retail business).
- Under the zoning ordinance, “local retail business” was a conditional use requiring approval by the Village’s Board of Zoning Appeals.
- The ordinance defined local retail business to include retail and service establishments that employed fewer than 10 people if the establishment’s floor area was less than 10,000 square feet.
- The stated purpose of the C-1 district was to avoid traffic congestion, excessive noise, and similar objectionable influences, and to preserve the small-town character of that area.
- In the trial court proceedings, the Village conceded that a restriction keyed solely to number of employees did not further the stated C-1 purposes.
- Loreto applied for a conditional-use permit to build a Wal‑Mart store of roughly 98,000 square feet with about 100 employees, far exceeding both the floor-area and employee limits associated with the C-1 “local retail business” definition.
- The Village denied the application.
- Loreto pursued both (1) an administrative appeal of the permit denial and (2) a declaratory-judgment action challenging the constitutionality of the ordinance’s local-retail-business limits; the trial court consolidated the actions.
- Evidence before the trial court indicated Loreto could still profitably develop the property within the existing zoning restrictions.
- The trial court declared the ordinance unconstitutional and ordered the Village to issue the conditional-use permit for the Wal‑Mart; the Village appealed.

## Issues

1. Whether the C-1 “local retail business” restrictions on floor area and number of employees were unconstitutional as applied to Loreto’s proposed Wal‑Mart development.
2. Whether the trial court erred by ordering the Village to issue a conditional-use permit for a project that did not comply with the ordinance’s C-1 scale limits.

## Decision

- The Ohio Court of Appeals reversed the trial court.
- The court held Loreto did not carry its burden to show the C-1 restrictions were unconstitutional as applied, given the ordinance’s legitimate objectives and the evidence of economically viable development options under the existing zoning.
- The court set aside the order requiring the Village to grant a conditional-use permit for the proposed Wal‑Mart and reinstated the Village’s denial of the application.

## Legal Principles

- Zoning enactments are presumed constitutional; the challenger bears the burden to prove unconstitutionality beyond fair debate.
- A zoning regulation is invalid only if it is clearly arbitrary and unreasonable and lacks a real and substantial relation to legitimate governmental interests such as public health, safety, morals, or general welfare.
- Limits on the intensity and scale of commercial activity (including floor-area limits) can bear a substantial relation to legitimate zoning goals such as reducing traffic impacts, noise, and land-use incompatibility, and maintaining the character of an area.
- The fact that a landowner cannot build its preferred or most lucrative project does not establish a constitutional violation; the availability of profitable, permissible uses strongly weighs against an as-applied challenge.
- Even where a party challenges a zoning ordinance through consolidated administrative-appeal and declaratory-judgment proceedings, a court exceeds its role when it substitutes itself for the zoning authority by compelling approval of a specific nonconforming development where the ordinance is valid.

## Conclusion

The court of appeals concluded that Chardon’s C-1 local-retail-business scheme—particularly its floor-area limitation—was a permissible exercise of zoning authority tied to traffic, noise, and community character concerns, and that Loreto failed to show the restrictions eliminated economically viable use of its property; accordingly, the trial court’s constitutional ruling and its order compelling issuance of a conditional-use permit for the 98,000-square-foot Wal‑Mart were reversed.


Loreto Development Co. v. Village of Chardon, 695 N.E.2d 1151 (1996)