20140727 Ver 1_Vested Rights Request_20150218

STYERS&
KEMERAIT MEMORANDUM
attorneys +counselors @law Attorney -Client Privileged / Confidential Communication
Attorney Work Product
not Haynes Street, Suite rot
Raleigh, North Carolina 27604 TO: Tom Reeder, Assistant Secretary for the Environment,
grq.600.6270 NC Department of Environment and Natural Resources
StyersKemerait.eom
FROM: Mary Penny Kelley, Of Counsel, Styers & Kemerait,
representing Hanson Aggregates
DATE: Wednesday, February 18, 2015
Re: Vested Rights in Continued Mining of Northern Portion
mpkelleyO�StyersKemeraitxom of Crabtree Quarry without Application of the Neuse
9r9.600.6277 River Basin Riparian Buffer Rules
Thank you for meeting last Friday, the 13`n, to discuss vested rights
applicability at the Crabtree Quarry. I know how difficult it was to pull
together a group of representatives from different divisions and offices,
but the effort certainly paid off when we had all perspectives providing
input and asking questions in person. Although I provided copies of
several documents in the meeting, I thought it would be helpful to submit
a follow -up package with the vested rights concepts discussed, the
meeting documents, and some additional oversized or numerous
attachments that did not make for convenient handouts during the meeting.
Attendees:
• Tom Reeder, Assistant Secretary for the Environment
• Craig Bromby, Assistant General Counsel
• Katie Mills, Legal Intern
• Tracy Davis, Director, Division of Energy, Mineral and Land
Resources
• Danny Smith, Water Quality Raleigh Regional Supervisor
• Karen Higgins, Water Quality Permitting, Wetlands
• Alan Burnette, Director of Resource Development, Hanson
Aggregates
• Mary Penny Kelley, Of Counsel, Styers & Kemerait
• Kevin Martin, Soil & Environmental Consultants
• Bob Zarzecki, Soil & Environmental Consultants
M. Gray Styers, Jr.
Karen M. Kemerait
Adam H. Steele
Mary Penny Kelley, of Counsel {SK015011.DOC J

Initially, the group reviewed large scale maps to become familiar with the mining site, active pit
and proposed expansion northwards.' A mining permit modification has already been approved
to expand into a triangular space north of the active pit since that area did not contain any
streams or wetlands. Once vested rights are determined for the buffers along streams needing
relocation, Hanson will submit an additional mining modification and simultaneously submit
applications for a 401 Individual Water Quality Certification and a 404 Individual Permit. An
option for piping the entire length of the stream was discussed and, although not ruled out, may
prove prohibitively expensive due to the topography on the site (50 -foot depth in area along a
western relocation and 75 -foot depth along an eastern location paralleling Duraleigh Road). In
addition, the Wildlife Resources Commission has requested that as much of the stream as
possible remain day- lighted to maintain some portion of wildlife habitat.
The group reviewed a prior vested rights matter involving Wake Stone Quarry in Nash County
since it is substantially similar to the Crabtree Quarry case.2 The following graphic compares the
two cases revealing that the Crabtree Quarry has more than the same justification for vested
rights that Wake Stone Quarry submitted to obtain its vested rights determination.3
Substantial Expenditures
Good Faith
Reliance Gov't Permits
Detriment
Capital costs
Site studies incl wetlands
Design/ const. of facilities
Mining equip
Capital costs
Site studies
Design/const. of facilities
Mining equip
Operating exp since 1949
Permits rec' d prior to 2000 Permits rec' d prior to 1997
rules effective date rules effective date
1 st Mining Permit 1989
Mining Modif. 1991
Mining Modif. 1997 w/
WQ approval wetlands
Ability to fully develop
(mitigation cost and
topography)
Registration 197o
1 st Mining Permit 1972
Mining Renewals 1982,
1992 (also 2002 and 201 2)
City Raleigh sett agent
Ability to fully develop
(mitigation cost and
topography)
P One of the maps (ledger- sized) is attached as Attachment A.
2 The Wake Stone package including the DWQ letter acknowledging vested rights, the AG opinion advising that Wake Stone meets the vested
rights criteria, and the 2005 application package of mining permits and other information is attached as Attachment 2.
3 The PowerPoint presentation from which this slide is excerpted is attached as Attachment 3.
{SK015011.DOC }

The group then reviewed the theory of diminishing assets and the narrow interpretation used in
some jurisdictions. Many jurisdictions recognize a theory of diminishing assets as a way to
fairly evaluate zoning decisions in the context of mining. Simply put, the theory recognizes that
quarrying involves a unique use of the land that contemplates gradual excavation until the entire
mineral reserve is extracted from the site and justifies an exception so that a change in zoning
will not prevent expanded mining activities. Some jurisdictions limit the broad rule of allowing
the activity to continue across the entire site to only a portion of the site where there is an
objective manifestation of intent to mine. Tracy Davis explained that a mining permit confirms
the intent to mine up to the permitted boundary, but that active excavation typically starts at one
point and then proceeds in phases across the entire site. As the active excavation expands, the
permittee submits a modification request along with an erosion and sedimentation control plan.
In addition, the permit is renewed every 10 years, almost automatically since the Mining Act
provides for only limited reasons to deny a permit. Once a permit, renewal or modification is
issued, the permittee is notified that it must obtain other approvals, including water quality ones,
before it can proceed with activity on the new area of mining. I noted that the Mining Act
doesn't preempt local zoning which is why the zoning litigation with the City of Raleigh
suspended the ability to expand prior to 2014. See N.C. Gen. Stat. § 74 -65. Without the
litigation, the Crabtree Quarry permit would have been modified to allow the active pit to expand
as early as 1985, well before the buffer rules were adopted in 1997.
A few cases were discussed that outline the narrow interpretation of the diminishing assets
theory.4 The first, McDowell v. Bd. Of Adjustment of the Township of Wall, 757 A.2d 822, 334
N.J. Super. 201 (2000), held that there must be some outward manifestation of intent to mine, not
merely an unexpressed intention or hope. The case used the example of Moore to describe
circumstances that met the criteria, specifically, that the entire property was fenced except at a
stream crossing, there was an ongoing contract for dirt removal, and a slow and steady increase
in mining operations. The case also used the example of Likanchuk to describe circumstances
that fell short, specifically because the mining was confined to one of four lots, there was no
systematic expansion of mining, the primary use of the property was for an auto salvage yard and
the mining was only incidental. A separate case, Town of Wolfeboro v. Smith, 556 A.2d 755,
131 N.H. 449 (N.H 1989), addressed an instance where a property owner sought to grandfather
mining activities without first obtaining a permit.
The Crabtree Quarry manifests an intent to mine the north side of the property through its permit,
its documented statements, the use of the site, and pursuit of its right to mine. As early as its first
permit in 1972, a hand -drawn map depicts the same permitted boundary that exists today.5 A
history of parcel assembly shows that the northern section was assembled in 1964 and retains
basically the same shape today.6 The mine was permitted in 1972 soon after the Mining Act
became law and was renewed in 1982 and 1992 before the buffer rules came into effect in 1997.7
It was also renewed in 2002 and 2012 showing a continuous, ongoing use of the full property as
a mining site. In 1992, the owners of Crabtree Quarry expressed their intent to mine northwards
in both a written letter accompanying its permit renewal application and in a quoted statement
McDowell and Wolfeboro cases attached as Attachment 4.
Permitting documents from 1970, 1972, and 1982 are attached as Attachment 5.
Parcel descriptions and photos of each acquisition are attached at Attachment 6.
A timeline of significant dates is attached as Attachment 7.
{SK015011.DOC }

incorporated into a News & Observer article published December 1, 1992.8 The full site has
been used in mining operation even if not under excavation including the processing plant and
primary crusher; the process water facility, settling ponds and waste stockpiling areas; a stockpile
of finished products for sale to customers; and the entrance, scales, office and roads. When
challenged by the City of Raleigh, the owners of Crabtree Quarry aggressively pursued its right
to mine the full extent of the property from 1985 until settled in 2014 (when diminishing assets
were recognized to apply to the northward expansion by the City in its Official Zoning
Interpretation.9
Given the Wake Stone precedent and the analysis of diminishing assets even under a narrow
interpretation, the Crabtree Quarry should receive vested rights. As the Department's guidance
on vested rights for buffers states, "The vested rights doctrine is a test of fairness to determine
whether a project has proceeded to such a degree that it would be unreasonable to impose new
changes in the law upon it." Granting vested rights for Crabtree Quarry simply echoes the same
vested rights analysis as occurred for Wake Stone. It would also maintain a level playing field
between competitors in the state and avoid creating an economic advantage to one quarry and not
the other. Granting vested rights also recognizes that fairness principles dictate lifting
unnecessary regulatory burdens that would work to the detriment of Crabtree Quarry in the costs
of design around difficult site topography and mitigation close to $1 Million dollars.
I trust this summary is useful and will be instrumental in meeting the deadline of Friday,
February 20th. As you know, the decision on vested rights is holding up the final design elements
and permitting applications. If you need anything to help expedite this decision, I am at your
disposal as is Alan Burnette of Hanson Aggregates who is anxious about any additional delays to
the permitting process.
Statements of intent to mine northwards are attached as Attachment 8.
Settlement Agreement with Official Zoning Interpretation is attached as Attachment 9.
{SK015011.DOC }

Index to Attachments
Attachment 1
Ledger -sized Map of Crabtree Quarry with proposed expansion
Attachment 2
Wake Stone package including DWQ letter recognizing vested rights, AG
opinion that vested rights apply, and Wake Stone's materials supporting
vested rights
Attachment 3
PowerPoint handout of slides reviewed during February 13, 2015 meeting
Attachment 4
McDowell and Wolfeboro cases
Attachment 5
Historical permits from 1972 and 1982
Attachment 6
Parcel History PowerPoint slides with description and photo overlay of each
acquisition
Attachment 7
Timeline for Crabtree Quarry
Attachment 8
Statements of intent to expand northwards
Attachment 9
City of Raleigh settlement agreement with Official Zoning Interpretation
recognizing diminishing assets theory applies to Crabtree Quarry's
expansion northwards
{SK015011.DOC }