Landmark U.S. Supreme Court Case Favors Private Developers in Public Planning Actions

PTAA received the following update from our friend Ken Szymanski, Executive Director of the Greater Charlotte Apartment Association and the Apartment Association of North Carolina:

I went to a city planning continuing education webinar today, and the focus was 6 nationally-prominent land use lawyers and their take on the landmark case, Koontz v. St. Johns River Water Management District. Their conclusion was that the conservative Court gave private developers reason for optimism in dealing with local governments, planning boards, and public permit granting agencies. There could well be some favorable ripple effects from the case for North Carolina land developers, as the case will be noted by city attorneys, planning directors, and others with the understanding: “don’t cross this new line”.

The issues are complex, but pertain to the U.S. Constitution’s 5th Amendment “Takings” clause, unconstitutionality, and a verification/amplification/embellishment of 2 other landmark U.S. Supreme Court land use cases decided in the 1990’s on “Reasonable Relationship” (or “Rational Nexus”) cited in the Nollan v. California Coastal Commission case, and on “Rough Proportionality” cited in the Dolan v. Tigard case. These pertain to development exactions, impact fees (proportionate share and others), “voluntary” cash payments for off-site public improvements, so-called “mitigation fees”, “payment in lieu” of contributing to public facilities, and the like.

The Florida Supreme Court had made a judgment in favor of the St. John’s River Water Management District, in a case where the District offered the landowner 2 choices on his 14.9 acre site east of Orlando near a major highway, that was largely classified as wetlands: reduce his development proposal from 3.7 to 1 acre and give an easement on the remaining 13.9 acres OR alternatively, develop the 3.7 acres, but make public improvements several miles away, on no particular project. Koontz refused the counteroffers, and sued in state court, where he lost. The various appeals lasted about 13 years, and Mr. Koontz is now deceased.

The Supreme Court reversed the Florida court’s judgment, saying, “We hold that the government’s demand for property from a land-use permit applicant must satisfy the requirements of Nollan and Dolan even when the government denies the permit and even when its demand is for money. The Court expresses no view on the merits of the petitioner’s claim that respondent’s actions here failed to comply with the principles set forth in this opinion and those two cases.”

Thus, the Supreme Court concluded that money exactions, in connection to a land development condition, are subject to Nollan/Dolan.

Ken Szymanski, AICP
Executive Director
Greater Charlotte Apartment Association &
Apartment Association of North Carolina