Posted by: Patricia Salkin | October 25, 2016

FL Appeals Court Finds Rezoning of Island Property was Not a Taking

Gordon and Molly Beyer purchased an undeveloped island in Monroe County for $70,000. At the time of purchase, the island was zoned “General Use,” which allowed one single-family home per acre. The property was just under nine acres. In 1986, the County adopted a Comprehensive Land Use Plan that downzoned the Beyers’ property to “Offshore Island,” allowing a new development density of one unit per ten acres. Since the Beyers’ property was less than ten acres, this 1986 Plan essentially eliminated their development possibilities. The 1986 Plan included an administrative process known as a “Beneficial Use Determination.” This process provided landowners with a means of challenging the Plan’s unconstitutional effects on property, but the administrative remedy was problematic because it only allowed for the minimum necessary relief to raise the value of the property to forty percent of its pre-regulation value. Further, the beneficial use provisions required property owners to attempt to sell their property for forty percent of its pre-regulation value before being eligible to apply for relief.

The Beyers, having exhausted their administrative remedy, brought an inverse condemnation action against the City, alleging that they “have been deprived of all or substantially all, reasonable economic use of the subject property.” The circuit court granted final summary judgment in favor of the City concluding that the statute of limitations had run on the Beyers’ taking claim, and the Beyers appealed. The court reversed and remanded, finding that the Beyers did not bring a facial taking challenge but rather an as-applied taking challenge for which the statute of limitations had not run. On remand, the circuit court again granted summary judgment in favor of the City and State on the ground that the Beyers failed to establish reasonable investment-backed expectations and, alternatively, under the laches doctrine, and the Beyers again appealed. The court concluded that the laches doctrine did not bar the Beyers’ claim, but nevertheless affirmed summary judgment on the basis that the Beyers failed to establish reasonable investment-backed expectations. The Beyers filed a timely motion for rehearing en banc.

Since the Beyers obtained a beneficial use determination that specifically considered the permitted economic uses of their property under the 2010 Plan, the court determined that inquiry into the economic impact was straightforward. According to the Special Master, “other than the Applicant being allowed to enter into the property to camp, there was absolutely no allowable use of the property under the City of Marathon Land Development Regulations.” In essence, the Beyers were required to leave their property in its natural state. As these were distinct property interests, the Beyers did not need to establish a vested right for there to be a taking that requires “full compensation.” Moreover, the court found the Beyers’ failure to provide evidence of their particular investment-backed expectations made summary judgment in favor the City appropriate.

In finding for the City, the court relied on the Special Master’s finding that the Beyers have “been adequately compensated by the issuance of 16 ROGO points.” Although it was not clear what the Special Master considered the points compensation for, if they were compensation in the takings context, the court found that the Constitution required not that the compensation merely be adequate, but that the compensation be “just”. However, the only evidence as to the valuation of these points in the record was from the beneficial use hearing. At the hearing, the Assistant City Attorney testified that a “two point ROGO dedication lot can generate anywhere from 25 to $40,000” but conceded that he was not a real estate expert and that this figure was arrived at anecdotally and not derived from any economic analysis of the current marketplace. Despite this ambiguity, the court affirmed the holding that the Beyers failed to establish reasonable investment-backed expectations.

Ganson v. City of Marathon, 2016 WL 5404070 (FL. App. 9/14/16)

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