Zoning board counsel: judge reversed Powell ruling but permits and inspections still required; May 14 hearing set

Petoskey City legal counsel Laura told the Zoning Board of Appeals on April 10 that a circuit court judge reversed the board’s prior determination in the Powells’ short‑term rental appeal but stopped short of issuing a final written order.

Laura, who presented the board with a short written legal opinion, said the judge appeared persuaded by the Powells’ claims that they were defrauded by their contractor and by the length of time the city took to process the application — facts the judge found compelling even though the law contains no fixed timeline for such applications. "Bad facts make bad law," Laura said, describing why the court was sympathetic to the Powells’ circumstances while still acknowledging the legal complexity.

Why it matters: the reversal could affect what regulatory requirements apply to the property, but Laura emphasized that a grant of a variance does not eliminate building permits or code inspections. "They will not get a permit without meeting code requirements," a Committee member said during the discussion, noting concerns such as absence of smoke detectors and means of egress in the Powells’ submission. Laura reiterated that inspections and building‑permit obligations remain separate from the zoning question and must be satisfied for any lawful operation.

The immediate issue is the language of the court’s order. Counsel said she and the Powells’ attorney have not agreed on precise wording; the judge scheduled a May 14 hearing limited to the order’s language if the parties cannot reach consensus. Laura said she had drafted language that would require the Powells to comply with the amended short‑term rental ordinance’s requirements, but the Powells’ lawyer objected, asserting the Powells’ rights arose before the ordinance changes.

Board members pressed for clarity about vesting and what counts as "substantial" investment. The board was told there is no statutory dollar threshold; determinations are fact specific. One board member referenced a past figure mentioned in the record, saying, "I wasn't sure that spending $40,000 on something is a game changer," and counsel replied that the law does not set a precise amount and that courts assess substantiality based on the case facts.

Next steps: city council will consider whether to pursue an appeal at its April 20 meeting. If appealed, the matter would proceed to the Michigan Court of Appeals, where a three‑judge panel would review the decision. Laura urged the parties to resolve order language before May 14 to avoid further litigation.

Procedural notes: the board convened in closed session under MCL 15.2681(h) to receive the attorney‑client privileged opinion and later returned to open session. The meeting concluded with brief board comments and an introduction of new member Joe Baird.

Sources: attorney Laura (legal counsel to the board) and multiple board members during the April 10 Zoning Board of Appeals meeting. No formal vote on the Powells’ status or any new permits was taken at this meeting; the update was informational.