Development agreements

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In Forbes, law prof Richard Epstein writes “The Taking of Port Chester” about the Didden v. Village of Port Chester case.  The facts of Didden are particularly egregious — in return for a private developer’s promise to withholdan exercise of eminent domain, a landowner was offered a choice: givethe developer $800,000, or a one-half interest in the owner’s planneduse of the property.  The owner had plans to put in a CVS Pharmacy, but the developer convinced the Village that his plan to put in a Walgreen’s was better, and the Village agreed to use eminent domain to stop Mr. Didden.  Professor Epstein writes:

It takes no financial wizardry to see that the expenses on both sidesof this high-priced battle are a social waste if all they do is replacea CVS pharmacy with a Walgreens. The Port Chester saga reveals theinstitutional flaw of modern takings law. Undue…

Continue Reading Epstein on the Didden Case

  • Today’s oral arguments in Missouri Supreme Court in the Tourkakis appeal, a case of an attempted taking for economic development, have been posted here (9mb mp3).
  • Background on the case is posted here by PLF on Eminent Domain, and the briefs are posted here.
  • Charley Foster at Planet Kauai has an interesting post on Hawaii’s automatic permit approval statute here. 

Continue Reading Eminent Domain and Land Use Round-up

I’ve had a chance to review Matsuda v. City and County of Honolulu, No. 06-15337 (Jan 14, 2008), a decision by the Ninth Circuit on the Contracts and Due Process clauses, but which also involves how local governments exercise the power of eminent domain.  The case revolves around Chapter 38 of the Honolulu Revised Ordinances, which was the local version of the “land reform act” at issue in HawaiiHous. Auth. v. Midkiff, 467 U.S. 229 (1984) before it was repealed in 2005.

Background

Finding thatthe economic ills purportedly caused by the concentrated ownership of privatesingle-family residential property in Hawaii,Haw. Rev. Stat. ch. 516 allowed homeowner/lessees to petition the HawaiiHousing Authority to exercise eminent domain on the homeowner’s behalf andcondemn the fee simple interest underneath their homes from the lessor, andtransfer it to the lessee upon payment of just compensation.

After that statute was upheld by the U.S.

Continue Reading Deal Or No Deal: Ninth Circuit Says Honolulu May Have to Live Up to Its Eminent Domain Promises

In 2007, the courts started to apply the U.S. Supreme Court’s decision in Kelo v. City of New London, 545 U.S. 469 (2005), especially how to mesh the Court’s deferential standard of review with property owner claims of pretext. 

Kelo left intact the standard that a determination that a taking will be for public use is measured by whether the legislature “conceivably” could have believed it would result ineconomic benefit, while leaving open the possibility that certain takings would not pass judicial review.  Justice Kennedy elaborated on that issue, and provided the roadmap for how a court should deal with a claim of pretext:

A court applying rational-basisreview under the Public Use Clause should strike down a takingthat, by a clear showing, is intended to favor a particularprivate party, with only incidental or pretextual publicbenefits, just as a court applying rational-basis review underthe Equal Protection Clause must strike down…

Continue Reading 2007 in Review: Post-Kelo Claims of Pretext

These seemingly unrelated court decisions were tied together with a common thread: private agreements for the most part are not substitutes for public processes, whether it is eminent domain, rezoning, or the granting of permits.   

Several courts determined that agreements in which government agreed with private parties to exercise eminent domain were invalid: 

  • One case (in which I am involved as counsel for the property owners so won’t comment in detail) involved a development agreement between the County of Hawaii and a developer to take property for a road.  The trial court struck down the attempt — here is the court’s Findings of Fact and Conclusions of Law.  More on the case here.
  • In a similar vein, a Washington state court of appeals in HTK Mgm’t, L.L.C. v. Rokan Partners, No. 58113-9-I (Wash. Ct. App., July 23, 2007) held that eminent domain “is an inherent power

…
Continue Reading 2007 in Review: Private Agreements and Public Process

In a story dated December 30, 2007 in the New York Times Travel section, “Not in My Tropical Backyard,” Christoper Pala ties together several seemingly-unrelated threads: the Hawaii Superferry, development on Molokai, the Hokulia project on the Big Island, and expanded resort development on Oahu’s North Shore.  The only issue that seems to have been left out is the question of vacation rentals.  The unstated thesis seems to be that these events are spurred, in large part by “backlash” against tourists and related development, but that seems like only part of the vibe — and it may be more the “drawbridge protectionism” discussed in this post, and a perception that we’re nearing capacity and things just aren’t the way we remember them, than a specific anti-tourism or anti-outsider sentiment.  Continue Reading NY Times Catches a Recurring Vibe

In Neighbors in Support of Appropriate Land Use v. County of Tuolumne, No. F051690 (Dec. 7, 2007), a California District Court of Appeals held that a development agreement cannot be used to avoid zoning restrictions.  The court framed the issue:

[C]an a county approve an application to devote a parcel of real property to a use disallowed by the applicable ordinance even though the county does not rezone the property to a district allowing the use, does not amend the text of the zoning ordinance to allow the use in the existing district, does not issue a conditional use permit consistent with the zoning ordinance, and does not grant a variance?  We conclude that it cannot.  Tuolumne County’s decision in this case to grant a parcel an ad hoc exception allowing a commercial use in an agricultural zoning district—an exception which was unavailable to other parcels in the same…

Continue Reading Development Agreement Not A Substitute For Rezoning

Thanks to Timothy Sandefur at PLF on Eminent Domain for calling attention to the Colorado Supreme Court’s opinion in Wheat Ridge Urban Renewal Auth. v. Cornerstone Group XXII, LLC, No. 06SC591 (Dec. 3, 2007). 

In that case, the court refused to order a redevelopment agency to condemn private property and turn it over to a developer to build a Walgreen’s store.  The court held that judges have no authority to compel an agency to take property even if the agency had entered into a contract with the developer in which it agreed to do so.  While not expressly relying on separation of powers, the court’s opinion clearly was based on its concern with preserving the agency’s discretion to condemn (or not condemn) private property.  See slip op. at 21-22.  The bottom line is that in Colorado, courts have no jurisdiction to fashion a specific performance remedy requiring the government to exercise a sovereign power.

Professor Ilya Somin calls the victory “Pyrrhic” in his analysis of the decision, suggesting the court’s “reasoning is likely to undermine property rights in the long run.”  While the opinion is often opaque and many of its premises difficult to fathom, I’m not so sure the case should be considered so poorly.  After all, the court reached a good result, although its analysis ventures into areas it need not have gone.  Continue Reading Court Has No Power to Order Government to Take Property

Check out this NYT story on a $12.4m verdict in a Connecticut eminent domain abuse case. 

A vast majority of cases challenging such takings are resolved through injunctions; takings temporarily halted by court injunction are often abandoned. But because Judge DeMayo had granted New England Estates and the landowners the right to seek a claim for damages, this case took a different path: The developer and landowners took it to trial, alleging a violation of their civil rights under the takings clause of the Fifth Amendment and seeking lost profits.

Mr. Hollister, the developer’s lawyer, maintained that town officials had made up reasons to take the land simply to stave off development.

Unlike the City of New London, which exercised its power of eminent domain after a “fair, public and factual” process, Mr. Hollister said, Branford pursued a process “so unfair and distorted as to violate the Constitution.”

The jury…

Continue Reading New York Times: Judging Eminent Domain