Knowledgebase-Proposed Moratorium on Rezoning City-Owned Property

Information Product

Title:Proposed Moratorium on Rezoning City-Owned Property
Summary:MTAS was asked if a city could enter into an agreement with a developer to
refrain from rezoning city-owned property for commercial use for a period of
five years.
Original Author:Ashburn, Melissa
Product Create Date:02/11/2002
Last Reviewed on::06/27/2017
Subject:Contracts; Contracts--Laws and regulations; Zoning; Zoning--Laws and regulations
Type:Legal Opinion
Legal Opinion: Rezoning City-Owned Property public.doc

Reference Documents:

Text of Document: February 11, 2002

Re: Proposed moratorium on rezoning city-owned property

Dear Sir,

You have asked for an opinion concerning a potential agreement between your City and a developer seeing to redevelop the local shopping mall. The developer wants an agreement by the city that city-owned property will not be rezoned so as to permit such property to be developed for use as another shopping mall, for a period of 5 years. Based on my research, such an agreement would be legal and permissible.

Moratoriums on zoning are generally disfavored as such measures are used to place restrictions on property owned by individuals or businesses which were not parties to the transaction precipitating the moratorium. Essentially, moratoriums hinder property owners’ rights by unilaterally prohibiting specific uses of the property.

In the current situation proposed for your City, only city-owned property would be subject to the moratorium, so no property owner can complain that their rights have been limited by the agreement. Unless there are other plans for city-owned property which would be hindered by the agreement, your City has a clear right to enter into an agreement concerning future uses of city-owned property.

The Tennessee Supreme Court has long held that municipalities may sell, lease or dispose of city property for the benefit of the city, and that such power is only limited by the charter. The Court explains that a municipality is:

a body created for special purposes, and there is no good reason why it should not,
in the execution of those purposes, resort to any means that would be necessary and
proper for the individual, in executing the same, unless it be prohibited by the terms
of its charter, or some public law, from doing so.

Adams v. Memphis & Little Rock R.R. Co., 42 Tenn. 645, 654-655 (1866).

The Charter for your City adopts by reference the powers granted to municipalities by Tennessee Code Annotated sections 6-2-201, 6-19-101 and 6-19-102. Article III, Section 1. These sections of the Code provide that municipalities may “contract and be contracted with” and may “acquire....sell, lease, mortgage, pledge or otherwise dispose of property...and any estate or interest therein.” T.C.A. 6-2-201(8), 6-19-101(8). The City therefore has wide latitude with regard to city-owned property, and may contractually hinder uses of city property.

There is no language contained in the Charter which would prohibit the City from agreeing to refrain from rezoning city-owned property for commercial use for a period of 5 years. Whether this is accomplished by moratorium or by contract is of no consequence to the legality of the transaction.

I hope this information is helpful. Please feel free to contact me should you have any further questions. Thank you for consulting with MTAS.


Melissa A. Ashburn
Legal Consultant

Please remember that these legal opinions were written based on the facts of a given city at a certain time. The laws referenced in any opinion may have changed or may not be applicable to your city or circumstances.

Always consult with your city attorney or an MTAS consultant before taking any action based on information contained in this database.