Gene Toscano, Inc. represented the owner of a nightclub property in a land use and zoning dispute against the City of San Antonio, challenging an allegedly improper rezoning action that prohibited the sale of alcohol on commercially zoned property.
The plaintiff purchased the property in 1981 under B-3 zoning, which permitted alcohol sales. After leasing the building to nightclub operators, a police investigation into an on-site assault led to a December 1998 raid by the Texas Alcoholic Beverage Commission and city inspectors. Soon after, the city suspended licenses and utilities, effectively shutting down the business.
Despite efforts to bring the property into compliance and secure nonconforming use rights, the City Council passed a rezoning ordinance in March 1999 that eliminated the right to sell alcohol. The application for grandfathered use was denied because the property did not have electrical service on the date the rezoning passed.
The plaintiff filed suit, arguing that the rezoning was not based on a comprehensive city plan and was instead discriminatory and procedurally improper. The suit also alleged that the City Council had violated established rules by reviving and passing an ordinance that had previously failed. Alternatively, the plaintiff contended that it was entitled to nonconforming use rights under the law.
After a bench trial, the court ruled in favor of the property owner, awarding $844,479 for lost rental income and diminished property value, along with $85,000 in attorney fees. The judgment included additional allowances for potential appeals, bringing the total to $929,480, excluding post-judgment interest.
This result marked a substantial victory for private property rights and underscored the importance of lawful, transparent zoning practices by municipal governments.
