Constitutional Issues in Local Land Use Regulation around Government Facilities

1. Constitutional Issues in Local Land Use Regulation around Government Facilities Eric Damian Kelly, , J.D. Ph.D., FAICPBall State University Duncan Associates

2. Agenda • Overview of applicable legal theories • Challenges to regulation that reduce the condemnation value of property • Challenges to regulating the fringe or border of government facilities • A fascinating (if abstruse) beach case

3. Takings Issue • Categorical takings • deny “all economically viable use” • require or allow physical invasion of property • create “exaction” that is not “roughly proportional” to burden imposed • exceed the scope necessary to accomplish purpose

4. Two Types of Takings • Lingle v. Chevron U.S.A., Inc., 125 S. Ct. 2074 , 161 L. Ed. 2d 876  (U.S. 2005) • “Exactions” involving transfer of value to government (not relevant here and not discussed further) • Pure regulation cases

5. Takings • Low overflight without actual invasion of property is a taking • United States v. Causby, 328 U.S. 256, 261, 66 S. Ct. 1062, 90 L. Ed. 1206 (1946)

6. Takings Cases (2) • Direct or forced physical invasion of property • Loretto v. Manhattan Teleprompter, 458 U.S. 419, 102 S. Ct. 3164, 73 L. Ed. 2d 868 (1982)

7. Takings Cases (3) • “Denial of all economically viable use” • Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 120 L. Ed. 2d 798 (1992)

8. Taking Cases (4) • BUT, law protects only “reasonable, investment-backed expectations” • Penn Central Transportation Company v. City of New York, 438 U.S. 104, 98 S. Ct. 2646, 57 L. Ed. 2d 631 (1978)

9. Takings Cases (5) • More Penn Central – also consider: • Character of government action • Whether action may be equivalent to an “acquisition of resources” to support a government activity

10. Takings Theory The rule proposed here is that when economic loss is incurred as a result of government enhancement of its resource position in its enterprise capacity, then compensation is constitutionally required; it is that result which is to be characterized as a taking. But losses, however severe, incurred as a consequence of government acting merely in its arbitral capacity are to be viewed as a non-compensable exercise of the police power. • Sax, Joseph L., Takings and the Police Power, 74 Yale L.J. 36, 63 (1964

11. Takings Limitation • “Parcel as a whole” rule • Consider whole parcel, not just part of it, in applying Lucas and similar rules • Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 122 S. Ct. 1465, 152 L. Ed. 2d 517 (2002)

12. Pre-Condemnation Activities • Zoning is one factor considered in valuing land in condemnation case • Sometimes government entities may use land-use controls to hold down or reduce value of land for condemnation

13. Precondemnation • Why developers get mad and sue for damages • City of Monterey v. Del Monte Dunes, 526 U.S. 687 119 S. Ct. 1624, 143 L. Ed. 2d 882 (1999). $1.4 MM damages

14. Precondemnation • Even if government finally takes property, owner may collect for “temporary taking” • San Diego Gas & Electric Co. v. City of San Diego, 450 U.S. 621, 101 S. Ct. 1287, 67 L. Ed. 2d 551 (1981)

15. Precondemnation • Willard Hotel case • Involved designation for redevelopment in plan • Never actually taken • Benenson v. United States, 548 F.2d 939, 212 Ct. Cl. 375 (1977)

16. Right-of-Way Reservations • Struck down as unconstitutional takings in many cases, including • Jensen v. City of New York.  42 N.Y.2d 1079, 399 N.Y.S.2d 645, 369 N.E.2d 1179 (N.Y. 1977) • Lomarch Corporation v. Englewood, 51 N.J. 108, 237 A.2d 881 (1968) • Gordon v. City of Warren Planning and Urban Renewal Commission, 388 Mich. 753, 199 N.W.2d 465 (1972)

17. Gypsum Res., LLC v. Masto, 672 F. Supp. 2d 1127 (D. Nev. 2009) • State enacted law to limit local ability to grant development approval on site near federal conservation area designated for expansion • Struck down as “special legislation” under state law

18. Precondemnation Limits OK United States v. 480.00 Acres of Land, 557 F.3d 1297 (11th Cir. Fla. 2009) • Federal government encouraged limits on development in Everglades, later condemned this property • Court ruled for government, applying “primary purpose or intent” standard

19. Regulating the Fringes • Airport hazard areas • Airport noise contours • Fringes of military training areas • Fringes of national parks, forests, monuments

20. Fringes -- Test • Lucas “denial of all economically viable use” test is only “categorical rule” that might apply • Most fringe or buffer regulations probably do NOT violate this [more]

21. Fringes – Test 2 • BUT, consider • Sax, “government enterprise” test • Penn Central “acquisition of resources” for public facility test • “interference with reasonable, investment-backed expectations”

22. Fringes -- Airports • Significant restrictions to protect airport operations often struck down • McShane v. Faribault, 292 N.W.2d 253, 18 A.L.R.4th 531 (Minn. 1980)

23. Fringes -- Recent Case • Recently followed in DeCook v. Rochester Int'l Airport Joint Zoning Bd., 2011 Minn. LEXIS 136 (Minn. Mar. 30, 2011) • Clear diminution of value ($170,000) • BUT some value remained, so no deprivation of “all economically viable use”

24. Fringes – More Recent • Lawrence County v. Miller, 2010 SD 60, 786 N.W.2d 360 (2010) • Procedural issue; can bring later challenge for effect of restrictions on remainder • Vacation Vill., Inc. v. Clark County, 497 F.3d 902 (9th Cir. Nev. 2007), cert. den. 554 U.S. 917, 128 S. Ct. 2956, 171 L. Ed. 2d 885 (2008) • Rejected appeal of state supreme court decision in favor of property owner

25. Just for Fun • Perhaps most fascinating (if also abstruse) recent takings case: Stop the Beach Renourishment, Inc. v. Fla. Dep't of Envtl. Prot., 130 S. Ct. 2592, 177 L. Ed. 2d 184, 2010 U.S. LEXIS 4971 (U.S. 2010)

26. Eric Damian Kelly, J.D., Ph.D., FAICP Duncan Associates 2312 West Audubon Drive Muncie IN 47304 Phone 765-289-5380 E-mail: eric@duncanassociates.com