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Recent Developments in Land Use and Environmental Permitting Case Law

November 10, 2013

I recently had the pleasure of presenting on a legal panel at the American Planning Association’s annual Florida conference. The presentation was titled: Where Do Property Rights Fit Into Sustainability? Recent Developments Affecting Planners. The panel discussed five recently decided land use cases that have important implications to the land development and environmental permitting fields. The following is a brief synopsis of those cases.

Galleon Bay Corp. v. Board of Co. Comm. of Monroe County and the State of Florida, 105 So.3d 555(Fla. 2012).

Galleon Bay is a development located in the Florida Keys. The property developer submitted a subdivision plat consisting of 42 lots to Monroe County for approval. After various negotiations, a subdivision of 14 lots was approved by the Monroe County Commission in 1991.

Subsequently Monroe County passed a “Rate of Growth Ordinance” or “ROGO.” The ROGO regulations provided strict limits on how many building permits could be issued, and a lottery process by which the permits would be granted. Efforts by the Galleon Bay developer to both obtain the permits through the lottery system, as well as to obtain a vested rights determination to avoid the lottery system, proved fruitless.

The Galleon Bay investors brought an inverse condemnation action against the County. After several rulings both in their favor and against, the ruling handed down this year by the Florida Supreme Court ultimately found for the developer. The court found that the restrictions on the use of the property, and how the use regulations were interpreted, effectively barred the developer from making any use of his property. The case was remanded to trial to determine the appropriate compensation for the developer.

Alachua Land Investors v. City of Gainesville, 107 So.3d 1154 (Fla. 1st DCA 2013).

In Alachua Land, the developer was in the midst of building a multi-phase residential subdivision covering 300 acres. This case concerns the final 127-acre phase, of which 90 acres was to be placed into conservation and the remaining 37 acres was to consist of single-family residences. During environmental permitting for the property, a third party challenge led to a settlement with the developer, which stated in part: “There shall be no construction or disturbance of the conservation area pre- or post- development.”

In preparing the plats for the final phase, the developer sought to run a utility line through a portion of the conservation area. Noting the restriction, the City Commission denied the plat. The developer then filed a complaint, claiming inverse condemnation of their property from the denial of the plat.

The Court here was not persuaded by the developer’s claims. The court noted that “land use planning is not an all-or-nothing proposition.” There was evidence here that alternatives to the utilities in the conservation area were available, albeit more costly. Further, the court noted that the developer had successfully developed the majority of the property, and thus its claims that the City was being unreasonable were unsupported. Therefore the denial of the plat was appropriate and did not give rise to a taking.

Town of Ponce Inlet v. Pacetta, LLC et al, – 120 So.3d 27 (Fla. 5th DCA 2013).

The developer in this instance assembled 16 acres along the Halifax River between June 2004 and May 2006 with the intent of developing a mixed use planned development along the waterfront. At the time that he made the purchase, the Comprehensive Plan for the area did not permit such a use. The developer, working with the Town staff and Council proposed amendments to the Comprehensive Plan as part of the 2008 “Evaluation and Appraisal Report.” The proposed changes would permit the intended development. The changes were approved at the first of two required public hearings. But before the second hearing, new Town Council members were elected, and the Council subsequently denied the proposed changes.

The trial court initially found that the Town violated the developer’s vested rights, and agreed that as a result the developer had an expectation that the amendments would pass. Nevertheless, the appeals court overturned these findings. The appeals court stated that no “good faith” reliance could be shown in this case, in light of the fact that when the developer purchased the properties, the proposed use was not permitted in the Comprehensive Plan. Furthermore, the developer could not rely upon assurances by Town Officials, when it is the Council, and the due process requirements under the applicable statutes, that control the Comprehensive Plan amendment process.

Hillcrest Property, LLP v. Pasco County, 2013 WL 1502627 (M.D. Fla. 2013).

Pasco County passed a “Right-of-way Corridor Preservation Ordinance” requiring that properties located adjacent to certain right-of-ways be donated prior to commencing any type of development. The ordinance also requires dedication of lands nearby if owned by the same developer regardless of the magnitude of traffic in the proposed development or the present need for the roadway. While a waiver process exists, evidence showed that this process takes between 300 and 1,750 days, and can cost up to $180,000 in consulting costs and fees.

The Hillcrest case involved a developer that was required to dedicate 4.23 acres, which comprised 28% of the entire development property. The County required the dedication despite the fact that the adjacent road had adequate capacity to handle the proposed development traffic. The Federal Court found that the ordinance was an abusive and coercive misapplication of government power. While taking property for a government purpose with compensation is permissible, extorting land owners for their property is not. The Court found that the waiver process did not alleviate the coercive power of the ordinance because the ability to grant this was still at the caprice of Pasco County.

Koontz v. St. Johns River Water Management District, 133 S. Ct. 2586 (2013).

Coy Koontz owned land in Florida that contained wetlands. In an effort to develop his property, he sought permits from the St. Johns River Water Management District (the “District”). The District responded that Koontz had to either significantly shrink the scope of his development or make improvements off-site on property owned by the District at his own expense. The District offered to consider other alternatives as well. Koontz brought suit claiming that the District’s conduct amounted to an unconstitutional taking.

The Florida Supreme Court dismissed the case, stating that the District’s demands were not subject to review. In the first instance, the State Court reasoned, as no permit was issued, there could be no taking of property claimed. Second, the State Court found that a demand for money, and not real property, did not give rise to a takings claim.

In a sharply divided five-to-four decision, the U.S. Supreme Court ruled that the actions of the District were subject to the exaction rules. The Supreme Court found that neither the fact that the permit was not issued, nor the proposed monetary exaction, were bars to a takings claim. As such, the standard land use exaction tests of a necessary “nexus,” linking the impacts and the nature of the exaction and the “rough proportionality” requirements must be met.

The final resolution of the Koontz case is still pending, as the Supreme Court remanded it to Florida for a determination as to whether the nexus and rough proportionality tests were met by the District’s demands. But regardless of the outcome, Koontz will remain an important precedent when any agency seeks to propose conditions or monetary exactions on a development project. Agency employees and elected officials will need to make sure those requests meet the nexus and rough proportionality standards. Those representing the development community will have to assure that their clients’ interests are protected in similar situations.